Unemployment benefits were created to provide a social safety net to members of the labor force facing involuntary unemployment. When most people think about unemployment benefits, they think about John Doe, who was laid off from his job and has not received any wages over the last several weeks or months. And while that is a textbook case of unemployment, not all cases are so straightforward.
Another important example of unemployment benefits is when an individual has a reduction in normal working hours, thus receiving lower wages than normal. These are considered partial benefits, because the state will supplement the wages earned from the employer with unemployment benefits to help the individual recoup a portion of their missing wages.
What Are Partial Benefits?
An individual who is considered partially unemployed may receive unemployment benefits to supplement their earnings during eligible weeks. An individual is considered partially unemployed when their wages and/or hours have been involuntarily reduced, their earnings from their employment do not exceed their unemployment weekly benefit amount (WBA), and they meet all other state requirements (including maximum number of hours worked).
Wage Reporting Requirements
Individuals collecting unemployment while receiving any form of wages are required to report these wages to the state during their designated claim certification period. Claim certification periods vary by state but are typically either weekly or biweekly check-ins that confirm any wages received and that the individual completed the required work searches (if applicable). Failure to appropriately report wages may result in an overpayment, penalties, and potential prosecution for fraud.
Earnings Disregard
While all earned wages are required to be reported, not all wages will be counted against an individual’s ultimate unemployment payment. This earnings disregard is viewed by states in varying manners but the concept remains the same: there is a predetermined amount that an individual can earn before the state begins to deduct from their weekly benefit amount. After the earnings disregard is considered, additional wages above that mark will be deducted from the WBA to determine the benefits received each week.
Earnings Disregard Examples
- Pennsylvania: Provides a Partial Benefit Credit (PBC), which is 30% of an individual’s weekly benefit amount.
- Washington: Flat $100 deducted from each week’s earnings.
- Vermont: The first 50% of reported gross wages earned will be disregarded.
And more! Earnings disregards vary widely by state and are subject to change.
Work Share Programs
Work share programs, known as short-time compensation in some states, offer employers an alternative to layoffs or traditional reduction in hours.
These arrangements allow an employer to reduce hours for a group of employees while they receive a portion of unemployment benefits to help make up for the lost pay. Work share benefits are calculated based on the percentage of reduction in hours, and not reduced or determined based on earned wages, so impacted employees may be eligible for benefits under work share programs when they would have otherwise been ineligible under traditional benefits.
There are currently 30 states that offer some type of work share program for employers. To use a work share program, an employer must submit a plan to the appropriate state workforce agency for approval. Requirements for these programs vary by state but typically include that:
- Hours must be reduced by at least 10-20% but no more than 40-80%.
- The percentage reduction must be equal for all employees in the program.
- A minimum number of employees that are impacted must be met.
- The employer must be current on unemployment tax filings and payments.
- The employer must continue to maintain health insurance and retirement benefits for impacted employees.
Workforce Reduction Guide
We know it is challenging to keep track of the many different aspects of the unemployment process, which is why we are here to guide you through the process with ease and expertise.
Our Workforce Reduction Guide can help provide state-by-state insight into common unemployment details, including:
- Weekly Benefit Amount(s)
- Maximum Benefit Duration
- Average Liability
- Maximum Liability
- Partial Benefit Guidance
- Claimant UI Guidance
- Work Share Programs
- WARN Act
Get a copy here today!
About Us
For more than 40 years, 501(c) Services has been a leader in offering solutions for unemployment costs, claims management, and HR support to nonprofit organizations. Two of our most popular programs are the 501(c) Agencies Trust and 501(c) HR Services. We understand the importance of compliance and accuracy and are committed to providing our clients with customized plans that fit their needs.
Contact us today to see if your organization could benefit from our services.
Are you already working with us and need assistance with an HR or unemployment issue? Contact us here.
The information contained in this article is not a substitute for legal advice or counsel and has been pulled from multiple sources. Some information was provided by our friend, Darby Gibson, Client Marketing & Insights Specialist, at Thomas & Company.
(Images by: Arsserge and Patrickdaxenbichler)
