As vaccination rates increase and the U.S. economy rebounds, many employers are struggling to fill vacancies. To encourage Americans to return to work, some states have begun providing return-to-work bonuses to unemployment insurance beneficiaries who leave unemployment rolls and re-enter the workforce.
STATES OFFERING RETURN-TO-WORK BONUSES
• Arizona
o $2,000 full-time; $1,000 part-time
o Individuals collecting unemployment benefits as of 5/13/21, who find work for 10 weeks and earn up to $25/hour or $52,000. Work must begin by 9/6/21.
• Colorado
o $1,600 for beginning work in May; $1,200 for beginning work in June
o Individuals who received unemployment benefits between 3/28/21 and 5/16/21 and find full-time work for a minimum of eight weeks.
• Connecticut
o $1,000
o Individuals who filed an unemployment claim for the week immediately prior to 5/30/21 and work full-time for 8 weeks prior to 12/31/21. Open to first 10,000 people.
• Kentucky
o $1,500
o Individuals who were collecting unemployment as of 6/23/21 and complete at least 120 hours of work between 6/24/21 and 7/30/21. Incentive will be paid to the first 15,000 people who qualify.
• Maine
o $1,500 full-time; $750 part-time
o Open to individuals who received unemployment benefits the week ending 5/29/21, accept a full-time or part-time (20 hours or more) job that pays less than $25/hour, and remain in the job for at least eight consecutive weeks. The program begins 6/15/21 and will accept applications through 7/25/21.
• Montana
o $1,200
o Individuals collecting unemployment insurance as of 5/1/21 who then complete 4 weeks of paid work.
• New Hampshire
o $1,000 full-time; $500 part-time
o Individuals receiving unemployment benefits as of 5/18/21 who return to work for eight weeks at a job that pays $25/hour or less. First come, first served beginning on 5/18/21, out of a $10M fund.
• Oklahoma
o $1,200
o Incentives will be paid to the first 20,000 individuals receiving unemployment benefits as of 5/15/21 who work 32 hours a week or more for 6 weeks with the same employer. The program will run through 9/4/21.
• Virginia
o $1,000
o Virginia will match up to $500 that small businesses (less than 100 employees) pay to new employees to offset the ongoing costs of childcare, transportation, or other barriers to re-employment. Match is eligible for up to 25 new hires per business. Jobs must pay $15/hour or more, begin after 5/31/21, and qualify for a W-2.
THE RED TAPE OF RETURN-TO-WORK BONUSES
Are return-to-work bonuses an appropriate substitute for unemployment insurance bonuses? There is a limit to how certain policymakers can be about this substitute when the effects of unemployment insurance bonuses themselves are unclear. Return-to-work bonuses seem like a great solution in theory. They continue to provide people with additional financial support while incentivizing them to rejoin the labor force. In practice, however, they can be difficult to implement and many people who should be eligible for the bonuses will not receive them.
Each state has a slightly different program design for a return-to-work bonus, but the basic structure is similar. Anyone receiving unemployment insurance as of a certain date who starts a new job, and stays in that job for several weeks (ranging from 4 weeks in Montana to 10 weeks in Arizona), is eligible for a payment ranging from $1,000 to $2,000 for full-time work.
Unfortunately, states have yet to publicly reveal exactly how people are expected to document that they have started a new job and stayed with it for the required amount of time. While some states may have accurate databases that allow them to use payroll or similar data to confirm tenure at a new job, it’s more likely that the burden of proof will fall on employees. New hires will have to contact the state’s office, provide documentation in the form of payroll stubs or a letter from their employer to prove that they have worked, and then wait for that information to be processed.
Each of these steps creates friction that could make life more difficult for these employees. New hires may feel uncomfortable pushing their boss to email them the required documents. Bosses could also use this government-provided incentive as a way of having more power over new employees, for example, by requiring them to work extra hours uncompensated to receive the necessary paperwork.
This friction will slow down the process of providing people with the bonus, or simply make it so that many people are unable to apply altogether. Some new employees simply will not hear about these new programs. Others may be dissuaded from applying. As we learned last year, many state departments of labor can take months to process unemployment claims. Processing these new claims of employment could take even longer. A person who takes a new job in July is unlikely to receive their bonus until October or later. This delay decreases the motivational impact of the incentive (unemployed people will need money in the short term) and is also likely to be mistimed from a macroeconomic perspective.
Moreover, many states have put limits on how many people will receive the bonus. For example, Kentucky will only provide bonuses to the first 15,000 people who qualify, and New Hampshire has set aside a 10 million dollar fund for the program. As a result, people who should qualify may apply, but not in time to actually receive the payment.
CUT THE PAPERWORK
A better alternative would be for states to eliminate the requirement that people document that they have stayed in their new job altogether. States could either provide the bonus immediately upon someone exiting the unemployment insurance system or (for states that are continuing to participate in the federal programs) simply continue to pay people unemployment insurance for the last few months of the program even after they have found work. In other words, instead of adding a new process where states need to document and verify employment, they should simply stop verifying unemployment.
If we want people to return to work, the immediate incentive of the salary provided by a job is very attractive on its own. Additional payments contingent on a lengthy paperwork process that may not even go through are not going to get people back to work.
WHAT CAN AN EMPLOYER DO TO HELP THE EMPLOYEE?
• Know what benefits are available for employees in your state.
• Know what information is needed from you to provide to your employees.
• Have someone dedicated to answering employee questions regarding benefits and respond in a timely manner due.
• Reach out to UCM Specialists for any additional information or questions you may have.
FAQS ABOUT UNEMPLOYMENT BENEFITS BY STATE
Will a return-to-work incentive be provided in Alabama?
Not currently. Governor Kay Ivey (R) announced on May 10, 2021 that Alabama will end pandemic-related federal unemployment benefits on June 19, 2021. No return-to-work benefit has been announced.
Will a return-to-work incentive be provided in Alaska?
Not currently. Governor Mike Dunleavy’s (R) Department of Labor and Workforce Development Commissioner, Dr. Tamika L. Ledbetter, announced on May 14, 2021, that Alaska will end pandemic-related federal unemployment benefits on June 12, 2021. No return-to-work benefit has been announced.
Will a return-to-work incentive be provided in Arizona?
Yes. Governor Doug Ducey (R) announced on May 13, 2021 that Arizona will end pandemic-related federal unemployment benefits on July 10, 2021. Funds will be used for Return-To-Work bonuses for Arizonans who were collecting unemployment insurance prior to the announcement. One-time payments will be $2,000 for individuals who rejoin the workforce at a full-time job and $1,000 for part-time. Each will be paid out after completing a minimum of 10 weeks of work. To qualify, recipients must also make $25 per hour or less, equivalent to a yearly salary of $52,000, at their new job, and must begin working by September 6, 2021.
Will a return-to-work incentive be provided in Arkansas?
Not currently. Governor Asa Hutchinson (R) announced on May 7, 2021 that Arkansas will end pandemic-related federal unemployment benefits on June 26, 2021. No return-to-work benefit has been announced.
Will a return-to-work incentive be provided in California?
Not currently. Pandemic-related federal unemployment benefits are due to continue until September 6, 2021. No return-to-work benefit has been announced.
Will a return-to-work incentive be provided in Colorado?
Yes. In addition to pandemic-related federal unemployment benefits being due to continue until September 6, 2021, Governor Jared Polis (D) announced on May 19, 2021 that Colorado will use the Colorado Jumpstart Incentive to provide $1,600 to individuals beginning work in May and $1,200 to individuals beginning work in June. The incentive is available to individuals who received unemployment benefits between 3/28/21 and 5/16/21 and find full-time work for a minimum of eight weeks.
Will a return-to-work incentive be provided in Connecticut?
Yes. In addition to pandemic-related federal unemployment benefits being due to continue until September 6, 2021, Governor Ned Lamont (D) announced on May 17, 2021 that Connecticut’s Back To Work CT Program will provide $1,000 bonus payments to 10,000 individuals who filed an unemployment claim for the week immediately prior to May 30, 2021 and work full-time for eight weeks prior to 12/31/21.
Will a return-to-work incentive be provided in Delaware?
Not currently. Pandemic-related federal unemployment benefits are due to continue until September 6, 2021. No return-to-work benefit has been announced.
Will a return-to-work incentive be provided in the District of Columbia?
Not currently. Pandemic-related federal unemployment benefits are due to continue until September 6, 2021. No return-to-work benefit has been announced.
Will a return-to-work incentive be provided in Florida?
Not currently. Governor Ron DeSantis’ (R) Secretary of the Florida Department of Economic Opportunity, Dane Eagle, announced on May 24, 2021 that Florida will end pandemic-related federal unemployment benefits on June 26, 2021. No return-to-work benefit has been announced.
Will a return-to-work incentive be provided in Georgia?
Not currently. Governor Brian Kemp (R) announced on May 13, 2021 that Georgia will end pandemic-related federal unemployment benefits on June 26, 2021. No return-to-work benefit has been announced.
Will a return-to-work incentive be provided in Hawaii?
Not currently. Pandemic-related federal unemployment benefits are due to continue until September 6, 2021. No return-to-work benefit has been announced.
Will a return-to-work incentive be provided in Idaho?
Not currently. Governor Brad Little (R) announced on May 11, 2021 that Idaho will end pandemic-related federal unemployment benefits on June 19, 2021. No return-to-work benefit has been announced.
Will a return-to-work incentive be provided in Illinois?
Not currently. Pandemic-related federal unemployment benefits are due to continue until September 6, 2021. No return-to-work benefit has been announced.
Will a return-to-work incentive be provided in Indiana?
Not currently. Governor Eric Holcomb (R) announced on May 17, 2021 that Indiana will end pandemic-related federal unemployment benefits on June 19, 2021. After a lawsuit was filed and the cancellation was delayed, a judge ordered on 6/25/21 that Indiana must continue paying the benefits. The state is appealing the decision. A return-to-work benefit has not been announced.
Will a return-to-work incentive be provided in Iowa?
Not currently. Governor Kim Reynolds (R) announced on May 11, 2021 that Iowa will end pandemic-related federal unemployment benefits on June 12, 2021. No return-to-work benefit has been announced.
Will a return-to-work incentive be provided in Kansas?
Not currently. Pandemic-related federal unemployment benefits are due to continue until September 6, 2021. No return-to-work benefit has been announced.
Will a return-to-work incentive be provided in Kentucky?
Yes. In addition to pandemic-related federal unemployment benefits being due to continue until September 6, 2021, Governor Andy Beshear (D) announced on June 24, 2021 that Kentucky’s Back To Work Incentive will provide $1,500 bonus payments to the first 15,000 individuals who qualify. To qualify, individuals must have been collecting unemployment as of June 23, 2021, and complete at least 120 hours of work between June 24, 2021, and July 30, 2021.
Will a return-to-work incentive be provided in Louisiana?
Not currently. Governor John Bel Edwards (D) announced on June 16, 2021 that Louisiana will end pandemic-related federal unemployment benefits on July 31, 2021. No return-to-work benefit has been announced.
Will a return-to-work incentive be provided in Maine?
Yes. In addition to pandemic-related federal unemployment benefits being due to continue until September 6, 2021, Governor Janey Mills’ (D) Labor Commissioner Laura Fortman announced an update to Maine’s Back To Work Grant Program on July 1, 2021. The program will provide $1,500 to individuals who begin full-time work between June 15th-July 25th, and $750 to individuals who begin part-time (20 hours or more) during that time period. The program is open to individuals who received unemployment benefits the week ending May 29, 2021, accept a full-time or part-tome job that pays less than $25/hour, and remain in the job for at least eight consecutive weeks. The program begins June 15, 2021, and will accept applications through July 25, 2021.
Will a return-to-work incentive be provided in Maryland?
Not currently. Governor Larry Hogan (R) announced on June 1, 2021 that Maryland will end pandemic-related federal unemployment benefits on July 3, 2021. After a lawsuit was filed and the cancellation was delayed, a judge ordered on 7/3/21 that Maryland must continue paying the benefits. The state is appealing the decision. A return-to-work benefit has not been announced.
Will a return-to-work incentive be provided in Massachusetts?
Not currently. Pandemic-related federal unemployment benefits are due to continue until September 6, 2021. No return-to-work benefit has been announced.
Will a return-to-work incentive be provided in Michigan?
Not currently. Pandemic-related federal unemployment benefits are due to continue until September 6, 2021. No return-to-work benefit has been announced.
Will a return-to-work incentive be provided in Minnesota?
Not currently. Pandemic-related federal unemployment benefits are due to continue until September 6, 2021. No return-to-work benefit has been announced.
Will a return-to-work incentive be provided in Mississippi?
Not currently. Governor Tate Reeves (R) announced on May 10, 2021, that Mississippi will end pandemic-related federal unemployment benefits on June 12, 2021. No return-to-work benefit has been announced.
Will a return-to-work incentive be provided in Missouri?
Not currently. Governor Mike Parson (R) announced on May 11, 2021 that Missouri will end pandemic-related federal unemployment benefits on June 12, 2021. No return-to-work benefit has been announced.
Will a return-to-work incentive be provided in Montana?
Yes. Governor Greg Gianforte (R) announced on May 4, 2021 that Montana will end pandemic-related federal unemployment benefits on June 27, 2021. Funds will be used for a $1,200 Return-To-Work Bonus initiative. Individuals who were receiving unemployment benefits as of May 4, 2021, and subsequently accepted employment will receive the payment after completing a minimum of four paid weeks of work.
Will a return-to-work incentive be provided in Nebraska?
Not currently. Governor Pete Rickets (R) announced on May 24, 2021 that Nebraska will end pandemic-related federal unemployment benefits on June 19, 2021. No return-to-work benefit has been announced.
Will a return-to-work incentive be provided in Nevada?
Not currently. Pandemic-related federal unemployment benefits are due to continue until September 6, 2021. No return-to-work benefit has been announced.
Will a return-to-work incentive be provided in New Hampshire?
Yes. Governor Chris Sununu (R) announced on May 18, 2021, that New Hampshire will end pandemic-related federal unemployment benefits on June 19, 2021. Instead, New Hampshire has established a ‘Summer Stipend’ program paying out $1,000 to individuals who rejoin the workforce at a full-time job and $500 for part-time. To qualify, recipients must have been collecting unemployment insurance as of May 18, 2021, take a job that earns $25 an hour or less, and stay at the job for at least eight weeks. The payments will be on a first come, first served basis, paid out of $10M fund.
Will a return-to-work incentive be provided in New Jersey?
Not currently. Pandemic-related federal unemployment benefits are due to continue until September 6, 2021. No return-to-work benefit has been announced.
Will a return-to-work incentive be provided in New Mexico?
Not currently. Pandemic-related federal unemployment benefits are due to continue until September 6, 2021. No return-to-work benefit has been announced.
Will a return-to-work incentive be provided in New York?
Not currently. Pandemic-related federal unemployment benefits are due to continue until September 6, 2021. No return-to-work benefit has been announced.
Will a return-to-work incentive be provided in North Carolina?
Not currently. Pandemic-related federal unemployment benefits are due to continue until September 6, 2021. No return-to-work benefit has been announced.
Will a return-to-work incentive be provided in North Dakota?
Not currently. Governor Doug Burgum (R) announced on May 10, 2021 that North Dakota will end pandemic-related federal unemployment benefits on June 19, 2021. No return-to-work benefit has been announced.
Will a return-to-work incentive be provided in Ohio?
Not currently. Governor Mike DeWine (R) announced on May 13, 2021 that Ohio will end pandemic-related federal unemployment benefits on June 26, 2021. No return-to-work benefit has been announced.
Will a return-to-work incentive be provided in Oklahoma?
Yes. Governor Kevin Stitt (R) announced on May 17, 2021 that Oklahoma will end pandemic-related federal unemployment benefits on June 26, 2021. Funds will instead go towards a $1,200 ‘Return to Work Incentive’ for Oklahomans who were collecting unemployment insurance prior to the announcement. Payments will be distributed to the first 20,000 individuals who rejoin the workforce before September 4, 2021, and complete 6 consecutive weeks of employment of 32 hours a week or more with the same employer.
Will a return-to-work incentive be provided in Oregon?
Not currently. Pandemic-related federal unemployment benefits are due to continue until September 6, 2021. No return-to-work benefit has been announced.
Will a return-to-work incentive be provided in Pennsylvania?
Not currently. Pandemic-related federal unemployment benefits are due to continue until September 6, 2021. No return-to-work benefit has been announced.
Will a return-to-work incentive be provided in Rhode Island?
Not currently. Pandemic-related federal unemployment benefits are due to continue until September 6, 2021. No return-to-work benefit has been announced.
Will a return-to-work incentive be provided in South Carolina?
Not currently. Governor Henry McMaster (R) announced on May 6, 2021 that South Carolina will end pandemic-related federal unemployment benefits on June 30, 2021. No return-to-work benefit has been announced.
Will a return-to-work incentive be provided in South Dakota?
Not currently. Governor Kristi Noem (R) announced on May 12, 2021, that South Dakota will end pandemic-related federal unemployment benefits on June 26, 2021. No return-to-work benefit has been announced.
Will a return-to-work incentive be provided in Tennessee?
Not currently. Governor Bill Lee (R) announced on May 11, 2021 that Tennessee will end pandemic-related federal unemployment benefits on July 3, 2021. No return-to-work benefit has been announced.
Will a return-to-work incentive be provided in Texas?
Not currently. Governor Greg Abbott (R) announced on May 17, 2021 that Texas will end pandemic-related federal unemployment benefits on June 26, 2021. No return-to-work benefit has been announced.
Will a return-to-work incentive be provided in Utah?
Not currently. Governor Spencer Cox (R) announced on May 12, 2021 that Utah will end pandemic-related federal unemployment benefits on June 26, 2021. No return-to-work benefit has been announced.
Will a return-to-work incentive be provided in Vermont?
Not currently. Pandemic-related federal unemployment benefits are due to continue until September 6, 2021. No return-to-work benefit has been announced.
Will a return-to-work incentive be provided in Virginia?
Yes. In addition to pandemic-related federal unemployment benefits being due to continue until September 6, 2021, Ralph Northam (D) announced on June 11, 2021 that Virginia’s Return To Earn Grant Program will match up to $500 that small businesses (less than 100 employees) pay to new employees to offset the ongoing costs of child care, transportation, or other barriers to re-employment. Matches are eligible for up to 25 new hires per business. Jobs must pay $15/hr or more, begin after 5/31/21, and qualify for a W-2.
Will a return-to-work incentive be provided in Washington?
Not currently. Pandemic-related federal unemployment benefits are due to continue until September 6, 2021. No return-to-work benefit has been announced.
Will a return-to-work incentive be provided in West Virginia?
Not currently. Governor Jim Justice (R) announced on May 14, 2021 that West Virginia will end pandemic-related federal unemployment benefits on June 19, 2021. No return-to-work benefit has been announced.
Will a return-to-work incentive be provided in Wisconsin?
Not currently. Pandemic-related federal unemployment benefits are due to continue until September 6, 2021. No return-to-work benefit has been announced.
Will a return-to-work incentive be provided in Wyoming?
Not currently. Governor Mark Gordon (R) announced on May 12, 2021 that Wyoming will end pandemic-related federal unemployment benefits on June 19, 2021. No return-to-work benefit has been announced.