States, Labor seek workaround for expired unemployment benefits

States and the Labor Department are looking into a potential workaround to keep 14 million people from losing a week of unemployment benefits.

Michele Evermore, a top unemployment expert at the National Employment Law Project and a volunteer member of President-elect Joe Biden’s transition review team for the Labor Department, said the legal language of the COVID-19 relief bill could offer a loophole.

Two key emergency unemployment programs, Pandemic Unemployment Assistance and Pandemic Emergency Unemployment Compensation, expired on Saturday. The former provided benefits to the self-employed and gig economy workers not typically eligible for unemployment, while the latter extended benefits beyond the traditional 26 weeks available in most states.

The COVID-19 relief bill passed by Congress last week extended both programs into mid-March, but President Trump did not sign the bill until Sunday, after the programs expired, raising concerns that 14 million people would lose a week of benefits just as rent came due on Jan. 1.

Evermore says that although the bill has language limiting the new benefits to the date it was enacted, states and the Labor Department may have a workaround.

According to Evermore, the Labor Department’s Employment and Training Administration, which administers federal aid to state unemployment programs, could modify their existing state contracts instead of writing new ones altogether, thus avoiding the lapse.

“It looks like it may be possible that states could, instead of drafting new agreements with states, they could just modify their old agreements,” Evermore said. 

In essence, they could backdate their agreements to keep the funds from lapsing. But Evermore warned that the workaround may not pass legal muster, and whether states could proceed remained an open question.

One state unemployment office confirmed to The Hill that they were working on the effort. The Hill has reached out to the Labor Department for comment.

If the workaround is approved, it could potentially prevent the trimming of another benefit that provides $300 in additional unemployment insurance to the roughly 20 million people receiving them.

Trump’s delay in signing the bill had raised concerns that it would delay the ability of government to send that increase in benefits to those qualifying for it. Because the relief measure authorized 11 weeks for the $300 increase, the delay had left some fearing it could reduce the benefits to 10 weeks.

Evermore noted that her work on the issue was solely through her capacity at NELP, and that she had not been in direct contact with ETA given her position on the Biden transition team.

Updated at 8:38 p.m.