Some workers can still collect unemployment benefits if they're called back to work — here's how

Some workers can still collect unemployment benefits if they're called back to work — here's how
People maintain social distancing as they wait outside the Arkansas Workforce Center in Fayetteville.Nick Oxford/Reuters
  • Some Americans are being called back to work as stores, restaurants, and other businesses reopen.
  • That doesn't mean they have to lose out on unemployment benefits if they're returning to fewer hours or reduced pay.
  • Through work-sharing programs or revolving furloughs, workers can still collect reduced benefits to make up the difference.
  • The $600 additional jobless benefit is set to expire on July 31 and its unlikely to be extended.

Americans are very slowly beginning to return to work, but in some cases their hours have been reduced to a fraction of pre-pandemic levels due to capacity restrictions and other measures designed to prevent new coronavirus infections.

Luckily, there may still be a way to collect some unemployment benefits — before the weekly $600 bonus implemented by Congress expires on July 31 — in order to make up the deficit through work-sharing programs or a reduction in unemployment benefits.

Here's how they work:
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Work-sharing programs

While only available in some states, work-sharing programs — where hours are reduced anywhere from 10% to 60% — are preferable, CNBC reports, citing experts. By reducing hours instead of laying off workers, employers are still able to reduce overhead costs while headcounts remain stable. Workers can then receive a reduced weekly unemployment payment in step with their reduction in pay.

Work-sharing programs can also help workers avoid the paradox of earning more on unemployment than they were making at a full-time job, making returning to work not always the most ideal option.

In order to take part in a work-sharing program, business must have their plans approved by individual state regulators.
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Benefits reductions and rolling furloughs

A slightly more complicated approach involves a reduction in benefits by revolving weeks on and off.

According to lawyers at JacksonLewis, if an employer brings someone back to work full-time for one week, and furloughs the same worker on alternating weeks, then the person can take unemployment benefits during the furloughed weeks. Before March, this would not have been possible because the CARES Act waived the usual one-week waiting period for unemployment applicants.
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Jackson Lewis provides the following example:

"Assume an employer in New York employed a group of exempt employees at salaries of $62,400 per year, or $1,200 per week. If the employer needed to achieve a 33% cost saving, it might consider temporarily reducing each individual's salary by $400 per week. Earning $800 per week, the employees would not be eligible for any unemployment benefits because their earnings would exceed the maximum earning threshold in New York. But if the employer were to furlough one-third of the employees for a week at a time, it could achieve the same cost savings. The furloughed employees should be eligible for $1,104 per week in benefits for the weeks they are furloughed."

The $600 addition ends July 31

The extra $600 per week is set to end July 31, as mandated by the CARES act, and there's significant opposition from Republican leaders and President Trump to extending the benefits. Treasury Secretary Steven Mnuchin, however, has considered another round of stimulus payments.

Some of the world's top economists are urging congress to take more action.
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"Policymakers in Congress and the Federal Reserve responded to this crisis with unprecedented levels of economic support for those affected, but more needs to be done," Former Federal Reserve Chairs Ben Bernanke and Janet Yellen said in a letter alongside 130 top economists on Tuesday. They call on lawmakers to pass additional relief measures and prevent "prolonged suffering and stunted economic growth."

In May, the US economy added 2.5 million jobs, surprising economists but keeping the unemployment rate above 13%. However, the Federal Reserve has projected that the unemployment rate will remain elevated for years, coming in at 5.5% at the end of 2022 and only falling to 4.1% — near a pre-coronavirus level — in the long term.

"We have to be honest that it's a long road," Federal Reserve Chair Jerome Powell said in a news conference after the forecast was released. "It's — depending on how you count it — well more than 20 million people displaced in the labor market."
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