Salary and Benefits

January 16, 2009

Many jobless find they're not eligible for benefits

The Philadelphia Inquirer

PHILADELPHIA — When the Chrysler plant in Newark, Del., shut its doors Dec. 19, more than 1,000 autoworkers suddenly joined the ranks of the unemployed.

At least they will be able to get unemployment insurance. Most jobless workers can't.

Across the United States, only 37 percent of workers who lose their jobs typically collect unemployment benefits, according to U.S. Labor Department statistics.

They often miss out because they didn't earn enough while working, or their work history was not continuous enough to make them eligible under state unemployment laws — usually written in the pre-computer era, when tracking payrolls was much slower.

At a time when the recession is a year old and the number of unemployed has risen to its highest level in 16 years, there is a real question about where federal unemployment dollars should go.

Should they be sent directly to states' strained employment trust funds, enabling states to keep from raising unemployment taxes on already beleaguered employers?

Or should they go to expanding eligibility, supporting states whose policies provide help to more people, who in turn will spend their benefits and boost the economy?

That approach became part of a federal bill in 2007 — the Unemployment Insurance Modernization Act — passed in the House, but not the Senate, although then-Sen. Barack Obama was a sponsor.

"I think it's a shock to people that the safety net is in such sad shape," said Maurice Emsellem, co-policy director at the National Employment Law Project, a pro-worker organization advocating for the bill. "A lot of people fall through the cracks."

Advocates like Emsellem always try to expand benefits in tough times, said Douglas J. Holmes, president of the National Foundation for Unemployment Compensation and Workers' Compensation, a Washington, D.C., business group.

It would be better to skip the debate and ship the money to the trust funds quickly, he said. "Federal money is not designed to dictate benefits state by state."

Falling through cracks

Those who fall through the cracks tend to be low-wage, part-time, seasonal or new workers, not like the autoworkers laid off in Delaware.

"Although low-wage workers were almost 2 ½ times as likely to be out of work as higher-wage workers, they were about half as likely to receive benefits," said a U.S. Government Accountability Office report in 2007.

Unemployment insurance began in 1935, primarily as a safety net for people who had lost full-time jobs but expected to return to them.

These days, most people who are laid off don't get called back. People change jobs, cobble together part-time jobs or work as independent contractors.

"Today, the work force is very different, and this is the heart of the matter," said Robert Reich, labor secretary under President Clinton.

That's the macro-picture. The micro-view has to do with when eligibility kicks in — a technical issue with huge ramifications.

Most states give benefits based on minimum pay earned, minimum amounts of time worked and reasons the person is unemployed.

The relevant time period is known as the base year.

Current methods of calculating the base year date to pre-computer days when state unemployment agencies needed time to gather paper copies of payroll records. So states didn't look at recent records — those from the remaining weeks in the layoff quarter, or even the preceding quarter.

To calculate minimum salaries or time on the job, they didn't count the weeks and months just before workers lost their jobs.

In most states that method persists, despite computerized pay systems. As a result, many people with short or sporadic work histories don't qualify.

Recent college graduates may not receive unemployment benefits if they had started their jobs in June and were laid off in December.

That's because none of their work weeks in the Oct. 1-Dec. 31 quarter, or in the previous quarter from July 1 to Sept. 31, would count in calculating their eligibility.

"I just talked to an employer who was thinking of laying off all his young workers," said attorney Sharon Dietrich, who heads the employment-law practice for Community Legal Services in Philadelphia, "and he was worried they wouldn't qualify."

Rules are confusing

College student Ronada Cyrus, 20, of Germantown, Pa., started in May as a seasonal city maintenance worker and was laid off in October.

Pennsylvania's regulations mean her workweeks from July to October didn't count toward her "base year," so she couldn't collect unemployment compensation because she hadn't worked long enough or earned enough.

Had Cyrus worked in New Jersey, she might have been able to collect benefits, because she had worked the New Jersey minimum of 20 weeks, earning at least $143 a week.

"I didn't have enough money in my quarters," Cyrus said. "I didn't understand what they were talking about. They just assume that people know."

The rules mystify Cyrus.

"If you work, you should be able to receive unemployment," she said. "Everybody needs a hand until they get on their feet."

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Nicky on September 13, 2009 8:13 AM | Reply

I had worked at my previous job for 7 years. In April of 2009 my employer terminated a few people, me being one of them. I was told that I was being fired because of a glitch on my record in 2005. I had to plead guilty to a misdamenor( which my attorney advised me to do) so I could still work my home health care job.
Will the point is my employer knew about the incident in 2005 and chose to keep me on. Now that a lot of people are looking for jobs and some any job whether they like or not, has I believed led my employer to let me go to pay out less money to newby's.
I found I could not receive unemployment because I was told by unemployment the employer had just cause to fire me. I don't think that was fare treatment for me. I have to live and survive to and I definitly am not a criminal. If it weren't for a friend of mine I would have been thrown out on the streets with no place to go or food to eat. The system would have turned me into a criminal just so I could survive. I still have some needs and don't know how to get things so I can get on my feet again.

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