Arizona Reinstates Requirements for Unemployment Benefits As Businesses Face Staffing Shortages
Beginning May 23, 2021, Arizona residents applying for unemployment benefits will need to prove they have actively searched for work to continue receiving weekly benefits. The requirement was previously suspended in March 2020 to help ensure the safety of Arizonans by promoting quarantining at home to mitigate the COVID-19 pandemic.
In a statement, Governor Doug Ducey said, “Arizonans are ready to get back to work. Our economy is booming, jobs need filling, more than 2 million Arizonans are fully vaccinated and vaccination appointments are available to anyone who wants one.”
In the Arizona Revised Statutes section 23-776, an individual is disqualified from receiving unemployment benefits if the Department of Economic Security (DES) finds that the individual has either failed to apply for available, suitable work or has not actively engaged in seeking work. In the first four weeks of an individual’s benefit period, DES looks at the degree of risk involved in the individual’s health and safety, level of training, experience, and prior earnings. After the first four weeks, DES considers any employment offer that is 120% of the received unemployment benefits to be considered suitable work.
To satisfy the requirement, beneficiaries must make at least one job contact per day for at least four days of the week in their respective job field. The job contact could include directly contacting an employer, registering with a local labor union, checking in with a former employer, and registering with a placement facility, to name a few options. The claimants must provide the date the job contact occurred, the employer’s name and address, the medium used to contact the employer, and the type of work they are applying for.
On March 20, 2020, just nine days after the Public Health State of Emergency was declared in Arizona, Governor Ducey signed an executive order and issued an administrative action that waived the work search requirements for those receiving unemployment benefits. The executive order was an extension of a March 12, 2020, Department of Labor guidance issued to states that allowed for flexibilities in administering unemployment insurance programs related to COVID-19.
By April 24, 2021, about 200,000 Arizonans were collecting unemployment benefits from the state. This new order allows for them to continue to collect, but they will have to show they have actively searched for work during the week they are filing for unemployment benefits.
In late March 2021, Arizona opened eligibility for vaccines to all individuals over the age of 16, a move that occurred earlier than originally anticipated. To date, over five million vaccine doses have been administered to people residing in Arizona. Roughly 41% of the population has been vaccinated. The daily rate of vaccinations in the state has been on the steady decline since mid-April, even as a majority of the state has yet to be vaccinated.
As Arizona begins to open its economy up, small businesses, restaurants, and bars are finding it difficult to hire much-needed staff. Some restaurants and bars must reduce their hours of operations and shorten their menus to respond.
Small business owners, especially in the food industry and hospitality industry, are afraid workers have left the industry permanently to find work that is more stable to support their families. Other business owners blame the expanded federal benefits for workers being reluctant to return to work.
In 1935, President Franklin Delano Roosevelt signed the Social Security Act, creating the national unemployment insurance program for the country. It was designed to replace a portion, not all, of a worker’s wages if they had been laid off. Each state’s program differs depending on the cost of living, the amount of state taxes allocated toward the program, and the state’s ideas of how much the insurance should cover, called the replacement rate. According to a Brookings Institution study, this replacement rate ranges from 20%- 55% of an individual’s regular wage, depending on the state they live in.
Arizona’s state unemployment benefits program is currently rated the second to lowest in the country and hasn’t increased in 17 years. According to a Forbes study, Kansas has the best-rated unemployment benefits program in the country with 26 weeks of benefits and an average of $375 per week. The study compared the number of weeks available, the average payment, and the state’s cost of living index.
As federal money runs out for additional unemployment insurance benefits, the Arizona state legislature is considering two bills, Senate Bill 1411, which would raise payments from $240 to $320 initially, and House Bill 2805, which would increase weekly payments to $300 by January 2022.
