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What the New Unemployment Insurance Act Means for Business

by Danielle Kane | Mar 27, 2020 3:28:17 PM

Updated March 27, 2020 3:26 pm

As the
COVID-19 pandemic crosses the United States, it is leaving economic wreckage in
its wake. Perhaps no other data shows this more starkly than the unprecedented number
of unemployment claims filed by newly-laid-off workers.

As of
Thursday, March 26, the federal government reported that 3.2 million claims had been filed since March 8, according
to Department of Labor Statistics.

perspective: At the peak of the Great Recession in March 2009, unemployment
claims topped at 665,000. 

numbers have steadily risen week over week, as many states (including Idaho,
Oregon, Hawaii and Washington) have ordered restaurants, bars and all non-essential
business (such as hair and nail salons) to shut their doors.

skyrocketing number of claims is more than local unemployment offices and
systems can keep up with as employers around the nation are being forced to
lay-off staff in record numbers.

I was
speaking with a friend of mine, Michelle (last name left out for privacy),
who works at a large, multi-branch physical therapy practice in Manhattan. As
of Monday, March 16, she was instructed to lay off several employees throughout
the clinic by the end of the week.

“I was
told I have only days to figure this out and hope it was enough to keep my
office, among the many offices they have, afloat in the coming weeks,” Michelle

this is a business that, as part of the healthcare system, is permitted to stay
open amid COVID-19.

this may sound bleak, at Better Business Bureau Northwest + Pacific, we want to
also provide the good news. Because there is some.

March 18, the president signed into law the COVID-19 Coronavirus Response Act,
which included a section titled Emergency Unemployment
Insurance Stabilization and Access Act of 2020
. This piece provides $1
billion for emergency grants to states for activities related to unemployment
insurance benefit processing and payment.

  • The
    first half of resources are intended to provide immediate funding for administrative
    costs, so long as they meet some basic requirements, including the mandate that
    employers must provide notifications of the availability of unemployment
    compensation at the time of separation.
  • The
    second half is reserved for emergency grants to the states that experience an
    increase of unemployment compensation claims of at least 10% compared to the
    same quarter last year. The Act will provide those specific states with 100%
    federal funding to provide extended unemployment benefits to businesses’
    employees – up to an additional 26 weeks after the initial 26 weeks. Previously
    states were required to pay 50% of those unemployment benefits.  
  • The
    Stimulus Bill just approved by Congress will add an additional $250 billion in
    unemployment benefits. It expands benefits to more people and will add another
    $600 weekly payment up to a maximum of 39 weeks.

So as
a business owner, what can you do to cut costs, minimize layoffs and hopefully
not add to this surge in unemployment claims?

recent webinar held by EY (Ernst & Young is a multinational professional
services firm specializing in financial advisory) focused on response planning
during COVD-19.

Juliette Meunier, workforce resilience leader, noted a few possibilities for

  • Forced
    vacation for employees to use already budgeted PTO
  • Mandatory
    reduced hours
  • Adjust
    401k contributions
  • Furlough
    (leave of absence for a large number of employees)

owners around the country are trying to come up with fair and reasonable ways
to take care of their employees without going under water. In this New York Times article, Robert Burns, owner of Night
Shift Brewing, noted that he and the founders eliminated their own salaries to
fund health benefits for 170 of their employees while they’re on furlough.

all of this illustrates is that there is only one thing we can all be sure
about right now: looking out for each other and nurturing employer-employee
relationships will remain imperative. BBB NW+P encourages business owners to maintain
those solid relationships with their employees amid this ongoing crisis. Talk
to them about the unemployment benefits you offer, what is changing under the
new Act, prepare answers to their questions and be as empathetic as possible.

It is
these transparent dialogues that build employer-employee trust during trying

On a
final note, every state structures unemployment benefits differently. To best
serve our accredited businesses during this time, here is the state list for
all of the regions in our Northwest + Pacific territory:

more information head to bbb-businesses.org/covid-19/

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