Labor Day will bring an end to Kentucky’s pandemic unemployment benefits

Pandemic unemployment benefits will expire in less than a month despite surging COVID-19 cases and hospitalizations, President Joe Biden confirmed Thursday.

After 18 months, the supplemental benefits expire nationwide on Sept. 6, which is Labor Day.

Gov. Andy Beshear said on Thursday it is safe for Kentuckians to return to work, even with the Delta variant crippling the state and the country. Kentucky is expected to hit a record number of coronavirus hospitalizations this weekend.

“We believe that people can safely go back to work if they get vaccinated, and if they wear that mask when they need to,” said Beshear, a Democrat.

Recipients had been receiving an extra $300 a week through the Federal Pandemic Unemployment Compensation program. Pandemic benefits will also end for those who would not normally qualify for assistance, such as the self-employed and independent contractors, as well as for those with mixed earnings from self-employment and taxable income from employers. Also ending is a program that provided a benefits extension when regular benefits were exhausted.

The Kentucky Office of Unemployment Insurance will send an email to claimants who are impacted by the changes.

The state has been trying to ween unemployed Kentuckians off unemployment insurance benefits for several months. In May, recipients of pandemic unemployment benefits had to provide proof they were actively searching for work, a requirement that existed prior to the COVID-19 pandemic. They had to report at least one job contact per week when requesting UI benefits bi-weekly.

In June, Gov. Andy Beshear announced unemployment insurance claimants who return to work between June 24 and July 30 could receive a stipend of $1,500. Kentuckians have until Oct. 1 to apply for the award.

Still, the number of Kentuckians applying for unemployment benefits has remained mostly steady over the last several months. There were 3,785 new claims in July, compared with 3,876 in June and 4,061 in May. In April 2020, claims hit an all-time high of 208,000.

“With a surging economy and job opportunities available throughout the commonwealth, there isn’t a valid reason why any Kentuckian who wants a job shouldn’t be able to find one,” Beshear said last month.

Kentucky Chamber Foundation Workforce Center Executive Director LaKisha Miller said Kentucky’s workforce is at a pivotal place.

“Employers are not only eager, but they need (employees) to return back to work,” Miller said.

Evan Smith, AppalReD Legal Aid attorney who specializes in unemployment, said the majority of his clients want to go back to work, but some are still wary because they have someone in their household who is immunocompromised and COVID-19 cases are increasing.

Some of his clients are struggling with finding work or not finding work that is right for them, he said. He is concerned the looming deadline will force unemployment insurance claimants to get a job that is a mismatch of their skill and pays less. He has also seen clients with a criminal record unable to find a job.

“A lot of these people when they apply they are not wanted,” he said.

The Kentucky Chamber of Commerce created a “Who’s Hiring” program in March 2020, which has posted thousands of positions, including some by “fair-chance employers,” which don’t consider criminal records while hiring. It was relaunched in May and employers came flooding in, adding 1,000 jobs in the first week.

Miller said the Kentucky Chamber understands there are a lot of barriers for people who struggle with substance use disorder or with being formerly incarcerated.

“Employers can’t afford to be passive,” Miller said. “Everyone on the sidelines should be considered.”

Impact of COVID-19 on Kentucky’s workforce

Kentucky has long had a low labor force participation rate, with 44% of Kentuckians not working, compared to 38.3% nationwide. The pandemic has not helped with workforce participation, likely because baby boomers who were putting off retirement have now permanently left the workforce, jobs require a higher education because of automation, and health issues, she said.

When Kentucky’s economy shut down last year, the state lost 300,000 jobs, according to Miller. Kentucky is still down about 90,000 jobs.

Miller said she hopes the Sept. 6 cutoff will bring a surge of people entering the workforce and filling open positions. Smith, though, is worried that those who are unable to immediately find a job will become more dependent on other government programs, causing them to dry up quickly. Unemployment benefits helped many people pay their rent, he said, and they may now start relying on rental assistance programs.

Beshear said the state has more than $100 million to help Kentuckians who are behind on rent and utility payments.

Unlike some states, Kentucky chose not to end pandemic unemployment benefits prematurely. Smith said continuing the program is the reason Kentucky’s economy has not done as badly as predicted.

“I have spoken many times about how we were not going to steer our recovery on a red or blue state solution but instead how we could ‘thread the needle’ just right to find the right solution to help the citizens of this state and our economy,” the governor said.

Beshear said those benefits have helped Kentuckians who lack access to child care at a time when students couldn’t be in school during summer months and pumped $34 million each week into grocery stores, restaurants and retail establishments across the state.