Layoffs are spiking

 Andrey Popov / Dreamstime /TNS

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PHOENIX — Arizonans forced out of work due to COVID-19 may get jobless benefits. But not more than the minimum wage, no matter how much they were earning before.

State lawmakers were moving late Thursday to provide additional flexibility to the Department of Economic Security to decide who can collect payments even if they do not meet what has, until now, been the definition of "unemployed.''

All this comes as the nation is seeing a sharp hike in the number of people seeking unemployment benefits. For the week that ended last Friday, March 13, the U.S. Labor Department reported that 281,000 people made an initial application for benefits, an increase of 70,000 from the prior week.

The agency reports that several states specifically cited layoffs related to COVID-19. Other states reported increased layoffs in service related industries and, more specifically, among those in the accommodation and food service industries, whether the virus was identified or not.

So far Arizona appears to be lagging in that trend. Preliminary figures for the past week put first-time claims at 3,844, a 14.5 percent increase from the week before.

Under Arizona's unemployment insurance law, individuals who are laid off or fired through no fault of their own are entitled to collect payments equal to one-half of what they were earning, for up to 26 weeks. The payments come out of a special fund financed through premiums paid by employers.

Arizona law, however, limits benefits to $240 a week, no matter how much the person had been earning before. Only Mississippi at $235 has a lower cap.

The question of payments is strictly a state decision. But it is the issue of who gets to collect benefits that is now in sharp focus.

One issue is that Arizona law says an individual has to be available to work for any willing employer. A change signed in 2018 by Gov. Doug Ducey says people who don't take pretty much any job after being out of work for at least four weeks automatically lose their unemployment benefits.

The problem with that in the face of COVID-19, according to the Labor Department, is that it does not account for what happens when an employer temporarily shuts down due to the virus, with the expectation the worker will return when business resumes.

In its advisory, the Labor Department says states are free to conclude that someone who had been working for that firm can collect benefits as long as he or she is available to retake the original job.

More complicated is the requirement to actually seek work, particularly if the job still exists and the company remains open but the employee is quarantined.

In that case, the Labor Department says states can decide that a person meets the work-search requirement by remaining "able and available for that job'' and that the person will "take reasonable steps to preserve their ability to come back to that job.''

Senate Bill 1694 and its companion, House Bill 2911, give DES the authority to adopt similar rules.

There also is permission for DES to waive an existing one-week "waiting period,'' a situation where someone has to be out of work — and with no income — for a full week before getting benefits.

The legislation has a sweetener of sorts for the business community: It spells out that any additional costs of providing benefits because of the virus outbreak will not be passed on to employers in the form of higher premiums.

What is not being changed is that $240 a week maximum, something fully within the state's purview.

Dave Wells, research director of the Grand Canyon Institute, said that figure has not been changed since 2004. He said a more reasonable cap would be $490 a week, a figure he said is "about average'' for the country and in line with states like Texas and Utah.

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