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Coloradans' federal unemployment benefits likely paused for weeks even if Congress passes package

CDLE: About 280K Coloradans to lose benefits next week
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Posted at 7:04 PM, Dec 18, 2020
and last updated 2020-12-18 21:11:41-05

DENVER — Around 280,000 people in Colorado are set to lose access to their federal unemployment benefits after next week and will likely see several weeks pass before any potential extension from Congress can be worked into the state’s unemployment system, officials with the Colorado Department of Labor and Employment said Friday.

The vast majority of those people have received Pandemic Unemployment Assistance benefits and are gig workers, self-employed, or independent contractors, the officials said.

The PUA program, which expanded unemployment at the federal level to include those new groups of workers not typically eligible for regular unemployment, was one of the unemployment programs put in place under the CARES Act that is set to expire Dec. 26.

Since Congress has for months failed to pass any new stimulus programs that would extend those unemployment benefits past that date, CDLE officials said Friday that even in the event the House and Senate can agree on a measure and get President Trump to sign it next week – which they are hopeful for – the guidance from the U.S. Department of Labor on how to reprogram their systems would likely not come until mid-January at the earliest.

CDLE Deputy Executive Director Cher Haavind said the current guidance on the latest stimulus package from Congress shows that PUA benefits would be extended to 55 weeks; Pandemic Emergency Unemployment Compensation would be extended another 16 weeks on top of the 13 from this year; and Federal Pandemic Unemployment Compensation would be reinstated at $300 a week for anyone receiving unemployment – down from the $600 a week that was allotted in the program earlier this year.

All provisions would be extended through April 19 and backdated to Dec. 26 under the details of the measure, which is still in the works in Washington, Haavind said.

As such, even if Congress can pass the measure and have it signed by the president next week, since the PUA and PEUC programs expire next Saturday no matter whether or not a claimant has remaining eligibility for payments, they would have to wait to receive the backdated payments until the state’s system is reprogrammed, Haavind and CDLE Senior Economist Ryan Gedney said.

The U.S. Department of Labor would likely provide the guidance on the programs to the state by mid-to-late January, and it would then take the CDLE a week or two to reprogram its systems, which are also being upgraded next month. Haavind said after the state receives any guidance should a new measure pass, it would likely take 2-6 weeks before the systems were reprogrammed.

The upgrade of the system was originally supposed to happen in April, but the CARES Act and need to reprogram for the new federal benefits pushed that off.

Haavind said that there will be a time period in January – likely a Wednesday to Saturday period – where the state’s unemployment system will go dark and claimants will not be able to request payments or file a claim. She said the department would be sending out guidance in coming weeks for people using the system.

The department will transfer more than 600,000 claims from the old system into the new one during that time. Haavind said the department plans to bring it back online on a Sunday so people can request payments. There will also be additional staff and extended hours at the call center.

There will be a new look to the system and some changes, Haavind said – most notably that regular unemployment benefit recipients will have to file to receive payment every week instead of every other week as is currently the case.

The expiration of the federal benefits next week comes as PUA and regular initial claims continues to climb. More than 19,000 regular initial claims were filed last week for the second week in a row – the first time since May that has occurred.

And PUA initial claims topped 20,000 last week – which Gedney said could be explained by some claimants exhausting benefits in other programs, or by the shift by many of the most populous counties in late November to Safer at Home Level Red, which closed restaurants to indoor dining and reduced capacity limits at other types of businesses.

Continued claims reached their highest levels in months again, and the state has paid out more than $410 million in regular unemployment benefits over the last 11 weeks – more than the total paid out in all of 2019.

But Colorado’s seasonally adjusted unemployment rate remained unchanged in November for a third straight month at 6.4% and remains under the national average of 6.7%.

The state saw its first decline in job gains in six months but has recovered about 61% of nonfarm payroll jobs lost between February and April – above the national average of 55.6%.

Haavind said that the department is encouraging people losing benefits or still struggling to find employment to go to the state jobs database and that the CDLE was working to be sure people are connected with services by working with other departments and encouraging people to visit their local workforce centers.