A group of Republican state legislators are working on legislation to end Wisconsin’s participation in several federal programs that provide new or additional unemployment benefits, including the Federal Pandemic Unemployment Compensation (FPUC) program. The FPUC program provides recipients of unemployment insurance (UI) benefits with an additional $300 per week on top of the regular state benefits they are eligible for. The supplemental benefit was created in 2020 as part of the first major federal COVID-19 response package (CARES Act). It was established in response to rising unemployment rates as many businesses had to limit capacity or shut down completely.
The CARES Act also established unemployment benefits for self-employed, part-time, and gig workers who would not typically be eligible for UI benefits, funded additional weeks of benefit payments beyond the standard 26 weeks available under state law, and provided a benefit for people who earn money from a mix of employment and self-employment.
These federal unemployment programs have been extended twice. In December 2020, they were extended until March 2021 as part of the Coronavirus Response and Relief Supplemental Appropriations Act (CRRSA) signed by President Donald Trump (R), and then again in March 2021 as part of the American Rescue Plan Act (ARPA) signed by President Joe Biden (D). Under the ARPA, the programs are set to expire on September 6, 2021.
At least 25 states have already decided to stop administering the FPUC before it expires: Alabama, Alaska, Arizona, Arkansas, Georgia, Idaho, Indiana, Iowa, Maryland, Mississippi, Missouri, Montana, Nebraska, North Dakota, Ohio, Oklahoma, South Carolina, South Dakota, Tennessee, Texas, Utah, West Virginia and Wyoming have all announced that they have stopped or will stop participating in the program. Nationwide, the average state unemployment benefit is about $330 per week, not counting any federal supplements related to COVID-19.
In Wisconsin, Assembly Speaker Robin Vos (R-Rochester) and Joint Finance Committee Co-Chair Senator Howard Marklein (R-Spring Green) have introduced legislation to end the state’s participation in the FPUC and other federal unemployment programs related to COVID-19. The companion bills (Assembly Bill 336 and Senate Bill 354) were introduced on May 21 and quickly scheduled for committee hearings in the final week of May. The bills passed out of their respective committees along party lines during the first week of June. The Assembly has scheduled the bill for a floor vote on Wednesday, June 9.
The legislation would also prohibit the Department of Workforce Development (DWD), which administers UI benefits, from waiving the work search requirement for UI applicants for any reason related to COVID-19. This bill follows the decision of a legislative committee in mid-May to end a temporary DWD rule that suspended the work search requirement. We covered that story here. Without committee action, the rule was set to expire July 10; following the committee’s vote, it went back into effect on May 23. Typically, Wisconsin requires UI applicants to certify that they have made at least four job searches in a week to continue receiving benefits.
Republican legislators supporting these measures have argued that employers are having trouble finding enough workers in part because substantial, easy-to-obtain UI benefits are keeping workers at home. This view has been supported by many statewide employer associations. In turn, Democratic legislators opposed to these policies have argued that they add unnecessary restrictions to the UI application process and ignore the concerns of workers who have not yet returned to the job because of difficulties in securing childcare and fears of contracting COVID-19 at work.
Governor Tony Evers (D) has questioned legislators’ motives for introducing AB 336/SB 354 and cited Wisconsin’s tight labor market pre-pandemic as an explanation for the problems employers are having in finding enough workers. The governor appears likely to veto the bill if it reaches his desk.
Since early 2020, Wisconsin’s UI system has become a key political issue between the Republican-controlled Legislature and the administration of Gov. Evers. The emergence of COVID-19 and subsequent public health orders drove an influx of UI claims that DWD had difficulty processing in a timely manner, leading to a large backlog of claims. In his 2021 State of the State address, Gov. Evers called on the Legislature to take up his proposal to modernize the state’s UI system. The Legislature passed a compromise bill with some of the governor’s desired reforms, and DWD later secured a federal grant to fund the initial phase of updates.
In related news, Wisconsin Congressman Mike Gallagher (R-Green Bay) has introduced a bill called the National Signing Bonus Act that would convert the $300 FPUC benefits into a reemployment bonus for any worker who gets a job prior to July 4, 2021.