When Will Unemployed West Virginians See Promised Lost Wage Assistance?

By Brian Skinner, Esq.

Update — During his August 28 briefing, Governor Justice announced that FEMA has approved the State’s application for more than $68.2 million in grant funding, which will allow WorkForce West Virginia to continue providing extra unemployment benefits to residents across the state. The governor did not indicate when unemployed West Virginians can expect to begin receiving the additional unemployment benefits.
 

On August 8, 2020, President Trump signed an executive memorandum to offer $300 a week in federally funded enhanced unemployment benefits for workers laid off during the coronavirus pandemic, after the previous enhanced benefits of $600 a week weren’t extended and expired.

The unemployment benefits memorandum issued by President Trump called for the federal government to cover 75% of a new $400 weekly benefit and for states to use money from their Coronavirus Relief Fund or other programs to cover the rest. As the Washington Post noted, “that was interpreted by many states to mean that they would have to provide an additional $100 per week for their residents to qualify for the benefit.”

As a result, the president’s unemployment benefits memorandum was quickly subject to bipartisan opposition given that state budget shortfalls are projected to reach $555 billion, according to the Center on Budget and Policy Priorities. In response to the initial resistance to the memorandum, the White House walked back the mandate for states to contribute an extra $100 in order for the federal government to provide the $300 in federal unemployment benefits. The U.S. Department of Labor later provided guidance that states did not have to the additional $100 in unemployment benefits in order to receive the $300 federal contribution. 

Several states have started to mobilize and submit applications to FEMA for the enhanced federal unemployment. Most states that are seeking FEMA funding have said they will not pay unemployed workers an optional state match of $100; however, three states (Montana, West Virginia and Kentucky) have indicated they will provide an extra $100, meaning that their unemployed workers will start receiving $400 each week.

During his August 10, 2020 briefing, Governor Justice announced that the State is prepared to do its part to ensure that unemployed West Virginians will be able to continue receiving benefits through the end of 2020.

“We cannot let our people that are sitting out there with no job – not knowing how in the world they’re going to pay rent, or keep from being evicted, or making their car payment, or putting food on the table – to just sit out there and wilt on the vine,” Governor Justice said.

He later suggested that he had presciently set aside $687 million of the State’s $1.25 billion in CARES Act funds for this very reason — — “That’s exactly why we did it and God knows I’m glad we did it,” Gov. Justice said. “We’re going to be able to take care of our people.”

So, what’s the status of these additional unemployment benefits?

In a press release dated August 19, 2020, WorkForce West Virginia said it has been directed by the governor to apply for the Lost Wages Assistance Payments grant through the Federal Emergency Management Administration (FEMA). In a recent interview, WorkForce West Virginia acting Commissioner Scott Adkins indicated that he hoped to have a completed application submitted the federal government by this week. He said on Monday that his agency has been told by FEMA the money could begin flowing to the state within two weeks after the application is approved.

But even after FEMA releases the funds to the state, how long will it take to get that money to people who desperately need it?

Currently, WorkForce West Virginia does not have a timeline for disbursing benefits. In the August 19 press release, Adkins explained that “[t]he federal government requires each state to set up a system that complies with the program. We are in the process of doing that now.”

WorkForce West Virginia will provide retroactive payments to eligible claimants for the benefit week ending August 1.

But, not only is it unclear when WorkForce West Virginia will begin paying the additional benefits, it is also unclear how long the additional benefits will last — The payment could end in a matter of weeks if FEMA funding is exhausted or the federal government enacts a new law, similar to the recently expired Federal Pandemic Unemployment Compensation program, to supplant the Lost Wages Assistance payment,” the release reads. “It will end no later than December 27, 2020.”

FEMA has available about $44 billion to pay additional unemployment benefits. According to the president’s directive, the aid should run through December 6 or until funding runs out. However, according to economists, the $44 billion will cover only about five weeks of payments for most of the 30 million unemployed.

Adkins has said that funding the new benefits will cost the state between $10 million and $12 million per week, based on the state’s current unemployment levels.

But not all unemployed West Virginians will be eligible for the full $400 in additional benefits. In order to qualify for the additional $300 from the federal government, claimants must currently be receiving at least $100 in weekly unemployment benefits from the state. This could leave out low earners, particularly those who rely on tips or part-time work as it is estimated that about 6% of regular unemployment recipients earn less than $100 in state benefits. 

Adkins has said that for those unemployed residents who make less than $100 in weekly unemployment benefits they will receive $100 a week in additional benefits from the state but not the $300 from the federal government.

Brian J. Skinner is the former counsel to the West Virginia House of Delegates Committee on the Judiciary and counsel to the West Virginia Senate Minority Caucus. He has over a decade of experience as an adviser to legislators on legal and political issues related to pending legislation; providing research and legal analysis services to legislative committees; and preparing bills, resolutions, amendments, and other documents for the West Virginia Legislature.