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Unemployment Insurance: How It Works And How To Apply

Note: This story has been updated to reflect changes since it was originally published on March 18.

The coronavirus pandemic has left  many in Kentucky jobless, and many more will lose their jobs in the coming weeks. Researchers at the Federal Reserve’s St. Louis district estimate the unemployment rate could hit 32 percent due to the coronavirus.

But access to unemployment insurance has been greatly expanded for those who have lost their jobs to help ease the burden. 

Gov. Andy Beshear issued an executive order on March 25, expanding unemployment eligibility to workers not typically covered by the program, including the self-employed, independent contractors, freelance workers, substitute teachers and childcare workers employed by religious groups and nonprofits. People who left their job to avoid a reasonable risk of exposure or to care for a family member affected by the virus are now also eligible.

Kentucky’s unemployment website says some applicants who fall under these categories may be told they are not covered, or their application has been denied. The website says to disregard this message and that the claim will be processed.

Beshear and the state are now encouraging employers with at least 50 employees who decide to lay off at least 15 people due to the coronavirus to file a claim on behalf of their employees. Beshear has waived the one-week waiting period for receiving benefits and the requirement that recipients prove they are actively looking for work (although the website may still ask the question).

How to apply

To apply for unemployment insurance, visit the Kentucky Career Center’sunemployment benefits page at https://kcc.ky.gov/career or call 502-875-0442. But first, check the schedule.

The Kentucky Education and Workforce Development Cabinet is asking that you apply on the day corresponding with the first letter of your last name.

Here is the schedule:

Sunday: A-D

Monday: E-H

Tuesday: I-L

Wednesday: M-P

Thursday: Q-U

Friday: V-Z and if you missed your day.

Deputy Secretary for the Cabinet for Education and Workforce Development Josh Benton said the schedule is meant to ease the burden on the application system.

Applicants will need to provide a name, social security number, birthday, email and postal address and employment details.

Kentucky’s standard unemployment insurance provides between$39 and $552 per week, depending on the lost income, for 26 weeks for employees who lose their job through no fault of their own. The Kentucky Center for Economic Policy says this usually comes out to about 45% of a person’s lost wages.

But federal changes have increased those benefits.

President Trump signed the Coronavirus Aid, Relief and Security (CARES) Act on March 27. The new law provides $600 more in unemployment insurance a week over the next four months and extends the length of time a worker can receive regular unemployment insurance (which in Kentucky averages $380 a week) by 13 weeks. One study suggests the extra $600 in unemployment benefits could bring as much as $623 million in federal relief money into Kentucky.

The increased demand temporarily crashed the program’s application system in the first couple weeks. But Benton said the cabinet increased server capacity and repurposed existing staff members to the program to deal with the uptick. 

Where Kentucky falls short

The biggest problem with unemployment insurance before the pandemic began was that it didn’t reach everyone who should be eligible for it, according to Dustin Pugel, a senior policy analyst at the Kentucky Center for Economic Policy.

Pugel said only 1 in 5 unemployed people actually receive unemployment benefits.

Unemployment insurance is now available to independent contractors or self-employed. Pugel says anybody who thinks they might qualify should apply anyway through the Kentucky Career Center website.

“Don’t filter yourself out, let them say yes or no. It’s not going to replace the entirety of your wages but it’s going to let you stay afloat till you get back on your feet,” Pugel said.

Though this isn’t cause for worry in the short-term, Kentucky’s unemployment insurance pool itself is not fully funded.

U.S. Department of Labor data show that Kentucky’s trust fund carries an insolvency rate of 57 percent, meaning it has enough money to cover just over half of the maximum amount of scheduled payments. Only nine states have a lower solvency rate.

That doesn’t mean there won’t be money available for people who need it: states can borrow money from the federal government to pay unemployment insurance once their trust funds are depleted, and Kentucky did during the Great Recession.

The Kentucky legislature also took action to beef up unemployment benefits in Kentucky.

Lawmakers passed SB 150 on March 26.

SB 150 adopts what is called an Alternative Base Period, as 41 other states and U.S. jurisdictions had previously done. The alternative base period allows more recent earnings to count towards a person’s wage calculations. 

The legislation establishes a work share program similar to what 31 other states haveimplemented.

Work share programs allows employers to cut back on hours without laying people off. Instead, the state helps cover lost wages. 

Michelle Evermore, a senior researcher and policy analyst at the National Employment Law Project, said the policy effectively becomes insurance for underemployment, rather than unemployment.

“The employer can go to the state agency and say, ‘I have to lay off 20 percent of workers but what I’d rather do is send everyone home on Fridays,’ and then the agency can pick up the unemployment insurance check for the last day,” Evermore said. “That way, employers can maintain their workforce, and workers get to keep their jobs.”

Federal help on the way

Congress passed a previous coronavirus aid package on March 18 that provides some help for state unemployment insurance programs. 

The legislation provides technical assistance for states that want to set up a work share program during the pandemic. It also provides $1 billion in administrative funds to the state agencies doling out insurance funds. Right now, administrative funding is tied to the previous year’s unemployment rates, which have been at historical lows. As a result, most state unemployment insurance programs are struggling to keep up with administrative costs.

The legislation also provides interest-free loans to states that exhaust their unemployment insurance trust funds, and pick up the costs of extended unemployment benefits past 26 weeks.

Jared Bennett is an investigative reporter and deputy editor for LPM. Email Jared at jbennett@lpm.org.

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