Some workers are making more on unemployment benefits than they did while working – but the labor … [+]
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Since the middle of March, over 30 million workers have filed unemployment claims. Unemployment benefits provide workers with a safety net that should make things much easier for the millions of newly unemployed workers.
Unemployment benefits are managed by individual states. However, a provision in the CARES Act provides unemployed workers with a $600 weekly federal unemployment benefit on top of their state unemployment benefits. In some cases, the additional $600 per week is worth two to three times as much as the weekly benefit offered by states. You can see the list of all state unemployment benefits here.
The CARES Act also expanded unemployment benefits for workers who are generally ineligible for unemployment benefits, including part-time, seasonal, self-employed, and contract workers such as freelancers and gig workers. Those who are currently furloughed are also eligible to claim unemployment benefits, even if they are receiving company benefits such as healthcare.
Thousands of Workers Will Soon Need to Choose Between Remaining Safe, or Going Back to Work
There is one major unintended consequence of the $600 weekly federal unemployment payment – some workers are now making more money from unemployment benefits than they earned while working.
Many of those workers will soon have to choose to remain on unemployment benefits or to go back to work. And the decision is not as clear cut as you might imagine.
5 Reasons You Should Go Back to Work, Even if You Make More with Unemployment Benefits
It seems like a no-brainer – stay home, stay safe, and earn more money in the process. But it may not be as simple as it seems. There are some very good reasons to go back to work.
1. You May No Longer be Eligible for Unemployment Benefits if You Are Offered Your Job Back
When you file for unemployment benefits, you are required to continue looking for a job and you are required to accept suitable employment when it is offered. Failure to do so may make you ineligible for unemployment benefits. The CARES Act does provide a clause that allows workers to turn down a job offer for a coronavirus-related reason, such as being ill or caring for an ill family member. But it doesn’t allow people to turn down a job offer because they are concerned about going back to work.
This will put thousands of individuals in a tricky position as states open back up and their former jobs become available again.
2. Expanded Unemployment Benefits Won’t Last Forever
The expanded unemployment benefits are good for up to four months. This is a comforting safety net that allows millions of Americans to receive a living wage while the COVID-19 emergency plays out.
But those benefits will eventually run out and unemployed workers will be left with only their state unemployment benefits. While this is still helpful, it may not be enough to live on, which will increase the urgency to get back to work. Unfortunately, many experts predict the labor market to be tight through the end of the summer and potentially into the fall and winter quarters.
3. Turning Down a Job Offer Today May Mean You’re Left Standing Without a Chair When the Music Stops
The Congressional Budget Office projects the unemployment rate to average close to 14 percent during the second quarter, while a White House spokesman projects numbers to reach 16% – 20% by June.
Both projections paint a dire picture for prospective employees. These numbers don’t tell the full story, either. Even jobs that are typically safe are being hit by unemployment. There is a risk that hundreds of thousands of highly skilled workers in a variety of industries will still be looking for employment this summer and fall.
Sometimes having “any” job is better than not having a job. If you have the opportunity for gainful employment, now may be a good time to take it.
4. You May Lose Employer-Sponsored Benefits
Many employees have been furloughed and still have access to their healthcare benefits and certain other company perks. However, those benefits will end if you are offered your position back and you choose not to return.
You may have access to COBRA benefits if you lose your job. However, this is very expensive as your employer will generally no longer cover any portion of the premiums, leaving you on the hook for the full balance.
You may be able to purchase your own healthcare plan on the exchanges, but this can also be expensive and your new plan may not be as robust as your current plan.
5. Working Gives You Agency
We all want to feel like we have control over some aspects of our lives. Working does that in many ways. The feelings of pride, accomplishment, and having an impact are essential in our lives. And you can accomplish these through work.
Working provides additional benefits as well, such as expanding your professional network, keeping your skills fresh and your resume up to date. All of these make it easier to find another, potentially higher-paying job in the future.
Additional Reading:
Coronavirus Layoffs – Job Losses And Furloughs Are Even Impacting ‘Safe’ Jobs
Expanded Paycheck Protection Program Throws Small Businesses Another Lifeline
Stimulus Payment Round 2: A Rundown Of The 3 Current Stimulus Proposals
Stimulus Proposal: $2,000 Payment Plus $1,000 Per Month Until 1 Year After Crisis Ends