The state’s Department of Employment Security is in a pickle about how to handle furloughed federal employees applying for unemployment benefits.
Nearly 800 people have applied for unemployment benefits relating to the federal shutdown, according to DES, but it’s unclear if they are eligible for those benefits because of state law. Unemployment insurance could be a critical stopgap for many of those workers who have now gone almost three weeks without being paid.
For many of them, the stumbling block is an inability to respond to notices from the department, which is in charge of administering the state’s unemployment insurance.
DES currently requires that employers respond to a claim of notice before fulfilling an unemployment insurance application. It’s part of its process of insuring that unemployment claims are legit.
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But the people that would respond to those claims for furloughed federal workers are also furloughed themselves, said Lockhart Taylor, assistant secretary for Employment Security, in an interview Wednesday.
“Right now, the new law says that employers have 10 days to respond and we can’t pay out until they respond,” he said.
The state is also having trouble determining which of these workers are even considered eligible for unemployment insurance.
This is especially true of those federal employees that are having to work without pay during the shutdown, Taylor said.
State law requires that those applying for unemployment insurance apply for at least three jobs per week and be available to take one.
But “an individual, say like a TSA employee who is out there and working their regular schedule, is clearly not able and available — really none of them are able and available to take another job because they are going to be recalled,” Taylor said in an interview. “These are the type of things that are defined within state law and we don’t have the provision within the law to waive those requirements. We are asking the U.S. Department of Labor right now how we should handle that.”
Federal workers who have been furloughed and aren’t required to work are expected to apply for jobs, said DES spokesman Larry Parker.
Taylor said currently they aren’t denying any of these applicants that are having to work without pay because of the federal shutdown, but they also aren’t paying out claims for them either. DES said it was unsure what percentage of claims this is currently affecting.
Taylor said that he is hoping the Department of Labor gives the state some direction this week about how to potentially waive the state’s requirement to apply for jobs while furloughed. As soon as the Department of Labor gives us the go-ahead, DES can move forward with these claims, Taylor added.
“It better be before the end of this week,” he said. “Every day they hold off on giving us direction delays any of these benefits.”
The Wall Street Journal on Wednesday evening reported that the Department of Labor had issued some guidance on the issue — determining that furloughed government employees working without pay would not be eligible for unemployment insurance because they would eventually be paid for the time worked.
But DES was not able to confirm if that was the case when asked for comment on Wednesday evening and Thursday morning.
The shutdown has affected a wide range of employees in North Carolina, from Environmental Protection Agency workers in Research Triangle Park to correctional officers at a prison complex in Butner, The News & Observer reported. In total, an estimated 7,800 people in the federal workforce in North Carolina are affected by the shutdown caused by the budget impasse over President Donald Trump’s proposed border wall, The Washington Post reported last week.
In 2013, the state legislature revamped the state’s unemployment insurance program, reducing the maximum unemployment benefit from $535 to $350 per week. The average weekly benefit is around $247, one of the lowest in the country, The N&O has reported previously.
The state has always required workers to apply for new jobs before getting benefits, Taylor said.
On Wednesday, Republican U.S. Senator Thom Tillis of North Carolina said he was co-sponsoring legislation that would pay essential federal workers during the shutdown.
Also on Wednesday President Donald Trump signed a bill that will provide back pay to all furloughed federal workers, according to CNN.
If those federal employees do end up getting unemployment insurance, they would have to repay the state, Taylor said.
“If the president is guaranteeing these employees will be paid, then basically these benefits are acting as a short-term loan,” Taylor said.
Another complicating factor: DES is handling all of this on a reduced budget.
While DES has a trust fund balance of more than $3.3 billion to pay unemployment benefits, its own budget for hiring staff was recently cut by 7.5 percent, Taylor said. And with the agency still handling Hurricane Florence-related claims, DES has had to borrow workers from other divisions to handle the number of claims coming in.
“It’s a pretty big impact, considering our claims load is 2,000 claims a week, and certainly, we have been above that since before the Hurricane,” he said.