[Senate Hearing 116-494]
[From the U.S. Government Publishing Office]


                                         S. Hrg. 116-494
                                         

                     UNEMPLOYMENT INSURANCE DURING
                        COVID-19: THE CARES ACT
                      AND THE ROLE OF UNEMPLOYMENT
                     INSURANCE DURING THE PANDEMIC

=======================================================================

                                HEARING

                               BEFORE THE

                          COMMITTEE ON FINANCE
                          UNITED STATES SENATE

                     ONE HUNDRED SIXTEENTH CONGRESS

                             SECOND SESSION

                               __________

                              JUNE 9, 2020

                               __________

[GRAPHIC NOT AVAILABLE IN TIFF FORMAT]                                     
                                     

            Printed for the use of the Committee on Finance

                               __________

                    U.S. GOVERNMENT PUBLISHING OFFICE                    
45-808-PDF                 WASHINGTON : 2021                     
          
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                          COMMITTEE ON FINANCE

                     CHUCK GRASSLEY, Iowa, Chairman

MIKE CRAPO, Idaho                    RON WYDEN, Oregon
PAT ROBERTS, Kansas                  DEBBIE STABENOW, Michigan
MICHAEL B. ENZI, Wyoming             MARIA CANTWELL, Washington
JOHN CORNYN, Texas                   ROBERT MENENDEZ, New Jersey
JOHN THUNE, South Dakota             THOMAS R. CARPER, Delaware
RICHARD BURR, North Carolina         BENJAMIN L. CARDIN, Maryland
ROB PORTMAN, Ohio                    SHERROD BROWN, Ohio
PATRICK J. TOOMEY, Pennsylvania      MICHAEL F. BENNET, Colorado
TIM SCOTT, South Carolina            ROBERT P. CASEY, Jr., Pennsylvania
BILL CASSIDY, Louisiana              MARK R. WARNER, Virginia
JAMES LANKFORD, Oklahoma             SHELDON WHITEHOUSE, Rhode Island
STEVE DAINES, Montana                MAGGIE HASSAN, New Hampshire
TODD YOUNG, Indiana                  CATHERINE CORTEZ MASTO, Nevada
BEN SASSE, Nebraska

             Kolan Davis, Staff Director and Chief Counsel

              Joshua Sheinkman, Democratic Staff Director

                                  (ii)
                                  
                            C O N T E N T S

                              ----------                              

                           OPENING STATEMENTS

                                                                   Page
Grassley, Hon. Chuck, a U.S. Senator from Iowa, chairman, 
  Committee on Finance...........................................     1
Wyden, Hon. Ron, a U.S. Senator from Oregon......................     4

                         ADMINISTRATION WITNESS

Scalia, Hon. Eugene, Secretary, Department of Labor, Washington, 
  DC.............................................................     7

                          ADDITIONAL WITNESSES

Sanders, Scott B., executive director, National Association of 
  State Workforce Agencies, Washington, DC.......................    48
Townsend, Beth, Director, Iowa Workforce Development, Des Moines, 
  IA.............................................................    50
Rodriguez, Jose Javier, State Senator, Florida Senate, Miami, FL.    52
Neilly, Les, president, Neilly Canvas Goods Company, Pittsburgh, 
  PA.............................................................    54
Evermore, Michele, senior researcher and policy analyst, National 
  Employment Law Project, Washington, DC.........................    55

               ALPHABETICAL LISTING AND APPENDIX MATERIAL

Evermore, Michele:
    Testimony....................................................    55
    Prepared statement...........................................    67
    Responses to questions from committee members................    86
Grassley, Hon. Chuck:
    Opening statement............................................     1
    Prepared statement with attachment...........................    88
Neilly, Les:
    Testimony....................................................    54
    Prepared statement...........................................    94
    Responses to questions from committee members................    96
Rodriguez, Jose Javier:
    Testimony....................................................    52
    Prepared statement...........................................    97
Sanders, Scott B.:
    Testimony....................................................    48
    Prepared statement...........................................    99
    Responses to questions from committee members................   103
Scalia, Hon. Eugene:
    Testimony....................................................     7
    Prepared statement...........................................   107
    Responses to questions from committee members................   113
Townsend, Beth:
    Testimony....................................................    50
    Prepared statement...........................................   147
    Responses to questions from committee members................   153
Wyden, Hon. Ron:
    Opening statement............................................     4
    Prepared statement...........................................   156

                             Communications

American Federation of Labor and Congress of Industrial 
  Organizations (AFL-CIO)........................................   159
Center for Fiscal Equity.........................................   160
Center for Public Justice........................................   162
Consortium for Citizens with Disabilities........................   166
Data Coalition...................................................   167
Dukat, Kelley....................................................   168
Dumas, Terry.....................................................   173
Greater Boston Legal Services....................................   174
Hermes, Ben......................................................   177
Iowa Coalition Against Sexual Assault............................   180
Leadership Conference on Civil and Human Rights..................   181
Legal Aid at Work................................................   184
Lutheran Services in America.....................................   186
Philadelphia Unemployment Project................................   187
Phillips, Michelle...............................................   188
Rogers, Robin....................................................   189
Sales, Cheyenne..................................................   190
Texas Council on Family Violence.................................   191

 
                     UNEMPLOYMENT INSURANCE DURING
                        COVID-19: THE CARES ACT
       AND THE ROLE OF UNEMPLOYMENT INSURANCE DURING THE PANDEMIC

                              ----------                              


                         TUESDAY, JUNE 9, 2020

                                       U.S. Senate,
                                      Committee on Finance,
                                                    Washington, DC.
    The WebEx hearing was convened, pursuant to notice, at 2:34 
p.m., in Room SD-106, Dirksen Senate Office Building, Hon. 
Chuck Grassley (chairman of the committee) presiding.
    Present: Senators Enzi, Cornyn, Thune, Portman, Toomey, 
Cassidy, Young, Wyden, Stabenow, Cantwell, Menendez, Carper, 
Cardin, Brown, Bennet, Casey, Warner, Hassan, and Cortez Masto.
    Also present: Republican staff: Kolan Davis, Staff Director 
and Chief Counsel; Ryan Martin, Senior Human Services Advisor; 
and Jeffrey Wrase, Deputy Staff Director and Chief Economist. 
Democratic staff: Rachael Kauss, Tax Policy Analyst; and Joshua 
Sheinkman, Staff Director.

 OPENING STATEMENT OF HON. CHUCK GRASSLEY, A U.S. SENATOR FROM 
              IOWA, CHAIRMAN, COMMITTEE ON FINANCE

    The Chairman. Welcome to everybody to our hearing, both 
those who are in the room and those who are not in the room.
    Before we start, I think it is important again to note what 
is going on all around us, and that is the acknowledgment of 
racial injustice that has gone on for far too long in our 
country. I certainly support those who are speaking out and 
making their voices heard in a peaceful manner to bring about 
change.
    While change does not always come easily, I want to remind 
those watching this hearing today that change is possible. In 
December of 2018, the First Step Act, which I introduced, 
became law. And I worked in partnership with several Republican 
and Democrat Senators. Senator Durbin was the lead person for 
the Democrats. This law is the most significant criminal 
justice reform in a generation. A lot of people did not think 
it was possible, but we did it by working together in a 
bipartisan way.
    We are also working together in other ways to address 
racial disparities such as in health care. The CARES Act and 
other COVID response efforts aim to help all, but especially 
minority populations that have been hit hardest by the virus. 
We have knocked down financial barriers to receiving care 
through the pandemic and provided support to our frontline 
providers to ensure access.
    We continue to focus attention on the devastating effect 
that COVID has had on nursing homes and the need to do better 
for resident staffs. The Trump administration has announced a 
number of efforts to address the disparate impact of COVID-19 
on African Americans and others, and I ask at this point 
unanimous consent to insert a document along those lines in 
regard to those efforts.
    I hear no objection, so it is so ordered.
    [The document appears in the appendix beginning on p. 90.]
    The Chairman. We are also taking action beyond COVID. We 
are working on a bipartisan effort to tackle this tragic issue 
of maternal mortality and the need to improve outcomes for 
mothers and babies.
    All Americans want lower prescription drug costs, but our 
efforts are especially important as minorities suffer from the 
high rate of common diseases such as diabetes and hypertension. 
We are exploring improvement for those with kidney disease, 
patients in need of organ transplants, and more beyond that.
    We are also in the middle of a transformation of our child 
welfare system. We know that too many children end up in foster 
care and that black children are over-represented in this 
system. And thanks to our bipartisan efforts, States are now 
transforming the way that they operate to keep more kids safely 
at home instead of placing them in foster care.
    There is obviously much more to be done, and I look forward 
to working with my colleagues on both sides of the aisle to 
continue those efforts.
    Now I would like to shift my remarks to focus on the topic 
of our hearing. As a result of COVID-19 and related stay-at-
home orders, millions of Americans across the country have lost 
work. Congress passed the CARES Act to provide help to those 
affected in many different ways, including by temporarily 
expanding unemployment insurance. These increased UI benefits 
have played an important role in helping those who lost their 
jobs or who could not work as a result of the pandemic. Given 
the need to act quickly to reduce the spread of COVID-19, 
providing extra help through the unemployment system made sense 
as a way to reduce the economic impact of stay-at-home orders. 
But now we are facing a much different situation than we were 
in mid-March.
    States are reopening. Employment recently turned positive. 
We need to shift our focus to helping people safely return to 
work, making sure businesses are able to come back quickly, and 
to put the country back on a path of economic growth.
    We have also learned a few things since the CARES Act 
became law. The CARES Act provides an additional $600 per week 
for those receiving UI, representing the gap between the U.S. 
weekly wage and the average weekly UI benefit. One thing we 
have learned is how poorly targeted the additional $600 per 
week was, as it appears most recipients are being paid more on 
the unemployment insurance than they were when working. This of 
course discourages people from returning to work or taking a 
new job, thus delaying the recovery.
    Recent research published by the University of Chicago 
estimates more than two-thirds of the UI recipients may receive 
benefits that exceed lost earnings, with more than 20 percent 
potentially getting double what they used to earn as long as 
they do not work. Some will say this is just an academic paper 
and that these extra payments are not really an issue of today. 
Those folks saying that have not been reading the many letters 
that I get from Iowans each day. And I am sure every member of 
the committee is hearing the same thing from businesses having 
a hard time bringing people back to work or from hardworking 
constituents earning less than others they know who are getting 
unemployment.
    Let me share a few stories from letters I have received. 
Letter number one: ``My daughter went back to work voluntarily 
because she wanted to help ensure the company would still be 
around after COVID-19. Many of her co-workers chose to stay at 
home and, due to the 600 extra dollars per week, are making 
more than she is. This isn't right.''
    Now letter number two: ``Senator Grassley, I am a small 
business owner who is in desperate need for additional 
employees, yet I receive very few applications when I post 
jobs. The issue is the additional unemployment. With the 
additional $600 per week, my potential employees make more on 
unemployment than they would working.''
    Letter number three: ``We are trying to hire back laid-off 
COVID-19-related employees, or anyone else as well, for $15 an 
hour. And we find that they are receiving the equivalent of $20 
an hour in unemployment benefits. Suddenly, the government 
became our competitor.'' The question to me, then, from this 
constituent: ``How could that happen?''
    These letters represent a small sample of those who write 
in daily with concerns about the unemployment payment of $600 
extra on top of what the State gives. Based on these letters 
and others I am sure we have all received, you would think 
everyone would agree we need to find a better way to help those 
who have lost income. But you would be wrong. Despite mounting 
evidence of the problems these extra payments are causing, the 
House passed a bill recently to extend them not just for a 
month or two, but for another 6 months through January 2021.
    Given this, I asked the Congressional Budget Office what 
impact these additional payments might have if continued. Here 
is what they said: ``Roughly five of every six recipients would 
receive benefits that exceeded the weekly amounts they could 
expect to earn from work during those 6 months.'' Continuing to 
quote, ``Employment would probably be lower in the second half 
of 2020 than it would be if the increase was not extended. In 
the calendar year 2021, employment would be lower than it would 
be without extension.''
    That does not sound like a recipe for economic growth, 
especially given last week's jobs report, which shows people 
are returning to their jobs and that millions more expect to 
return soon. I know everyone is focused on these extra $600 
checks, but let me remind everyone of the other CARES Act 
policies--policies that continue past July.
    First, the CARES Act allows those out of work as a direct 
result of COVID-19 to get UI benefits through December. This 
includes people who are infected or caring for someone 
infected, those who cannot go to work because their workplace 
is closed due to COVID-19, and those who rely on day care that 
is not available as a result of the pandemic.
    Second, individuals get an additional 12 weeks of 
unemployment if they are still unemployed after State benefits 
run out. And in States where unemployment rates remain high, 
further weeks of benefits will also be available.
    And most importantly, the CARES Act provides funding for 
what are called ``work sharing'' programs. Under these 
programs, instead of laying off employees, businesses would 
reduce hours and pay employees a partial UI check to offset 
lost income. States can also use it to bring back workers on a 
part-time basis if they cannot fully reopen for a while.
    And do not forget, UI is not the only game in town. The 
CARES Act includes many policies to help those affected by the 
pandemic, including the employee retention tax credit, the 
Paycheck Protection Program, direct payments to individuals, 
and other policies designed to help businesses reopen and 
people return to work.
    The UI system will continue to play a very important role 
in addressing the impacts of the pandemic. However, our efforts 
must be coordinated to help workers and businesses in a way 
that is most productive. I look forward to hearing from our 
witnesses today to learn what has worked, what has not, and 
discuss how we can make sure our efforts in Congress can best 
support a strong economic recovery at the same time we are 
trying to help people who are hurting.
    Now I call on Ranking Member Wyden. Thank you for being 
here.
    [The prepared statement of Chairman Grassley appears in the 
appendix.]

             OPENING STATEMENT OF HON. RON WYDEN, 
                   A U.S. SENATOR FROM OREGON

    Senator Wyden. Thank you, Mr. Chairman, and thank you for 
holding this hearing.
    There is a lot to discuss today, and I would like to start 
with Friday's jobs report. The President celebrated like it was 
the greatest victory in America since the end of World War II. 
And I want to start by trying to give this a little bit of 
perspective.
    Speaking conservatively, more than 20 million Americans are 
still out of work today. And my guess is, they are not doing a 
whole lot of celebrating if they are among the many people who 
do not know how they are going to pay rent or put food on the 
table this month. Watching the President celebrate in the midst 
of this jobs crisis is yet another sign that Donald Trump just 
does not understand what it is like for people born without a 
real estate portfolio.
    First, I want to walk through how the Senate got here, 
starting in March. The pandemic hit. The economy went into 
lockdown, and unemployment shot into the stratosphere. So when 
the CARES Act negotiations began, Democrats made our bottom 
line an expansion to unemployment benefits that would bring 
more workers into the system and fully replace people's lost 
wages. Throughout the negotiations--and they went on for days--
Secretary Scalia said that could not be done because the States 
run unemployment programs on Bronze Age technology that cannot 
crunch the numbers for individual workers. Senate Democrats 
said that doing nothing is just unacceptable when you have this 
hurt from sea to shining sea.
    When Secretary Scalia failed to offer a plan to get 
benefits out in a timely way, Democrats proposed a flat-sum 
solution: $600 per week across the board on top of traditional 
benefits, adding up to full-wage replacement for the typical 
worker.
    So let us fast-forward now to this afternoon. The pandemic 
is still killing thousands of Americans each week. The nearly 2 
million new unemployment claims filed last week tripled the 
highest number of claims made in any week during the Great 
Recession.
    It is a national scandal that African Americans are not 
only dying of COVID-19 at much higher rates, they are also 
suffering vastly more economic pain than virtually anybody 
else. Black unemployment is disproportionately high. And 
because black people have systematically been excluded from 
opportunity and wealth in America, it is a lot less likely that 
they have the financial resources to weather the storm. For the 
President to say the recovery has arrived and everything is 
turning into sunshine, is just going to perpetuate the economic 
injustice.
    The bottom line is, the crisis is going to go on a lot 
longer if the Trump administration and Senate Republicans start 
yanking out these key pillars of economic support like 
supercharged unemployment benefits, much of which go to the 
lowest-paid folks in the workforce. Main Street businesses 
nationwide, so many of them hang on by a thread. Workers could 
lose their homes and fall through the cracks if the Senate is 
not in their corner. So, like the chairman, I want to respond 
to a few arguments that I heard coming from the other side, 
arguments against supercharged unemployment benefits. First is 
the idea that Americans who have lost their jobs from the 
pandemic are plenty happy to just sit around instead of going 
back to work. In my view, that is dead wrong, and it's an 
insult to American workers.
    It is also a misunderstanding of how the system functions. 
I have been talking to out-of-work Oregonians throughout this 
crisis, and what I hear overwhelmingly is that they want to 
work. They want to work. They want to get back to their jobs. 
They believe deeply in the dignity of work.
    They want to earn their pay, support their families, and 
return to their lives, lives they had before this pandemic. And 
most importantly, they know that the path to getting ahead in 
America is moving up the economic ladder rather than being on 
unemployment. Second, members of this committee have said it is 
somewhat unhealthy for people to get unemployment benefits 
during the crisis. I sure think this is out of touch with the 
realities people are facing in this crisis. These benefits are 
what are saving millions of people from hunger and homelessness 
in the middle of a pandemic. Forcing people back into a 
contagious workplace also further spreads the virus that has 
killed 110,000 Americans and turned nursing homes nationwide 
into scenes of tragedy. Third, I have heard talk among 
Republican Senators of cutting the expanded benefits, possibly 
just saying, let's cut them in half. So I want colleagues to 
really get this one straight. Between the CARES Act and the Fed 
lending program, big corporations are getting trillions of 
dollars in support to weather this crisis. And now Senate 
Republicans are saying, we are just going to cut what the 
little guy gets, maybe in half. The system is already rigged to 
favor the powerful and the wealthy. Congress surely should not 
stack the deck any longer. Our unemployment insurance system, 
created in the 1930s, should have been modernized long ago to 
cover the gig workers, the self-employed freelancers. Long ago, 
benefits should have been tied to economic conditions on the 
ground.
    I also believe Congress should examine whether a Federal 
approach for administering unemployment benefits could do a 
better job than the quilt of 50 different State systems 
operating today. Nobody predicted the volume of claims we are 
seeing. But whether it is due to neglect or political sabotage, 
too many of these State systems are failing the people who are 
desperate for help.
    I am going to close with one final thought. American 
workers are not to blame for the jobs crisis that the country 
faces today. By now, everybody has seen images of cars stacked 
up for miles at food bank distribution centers around the 
country. I gave out food just recently at one of them.
    Colleagues, they are modern-day bread lines. With so many 
people out of work, America is on the precipice of an eviction 
tsunami, particularly in the black community. Supercharging 
unemployment benefits, fully replacing people's lost wages, 
bringing gig workers and freelancers into the system were the 
right things to do. And I know that is not just the opinion of 
Democrats who got it done, because right now the President 
absurdly is taking credit for the expansion in misleading 
campaign ads on the airwaves right now. It is also a fact that 
every Republican member of this committee voted to strip the 
expanded benefits and slow down their distribution. And at 
least a few turned around and then sent out press releases 
touting the expansion that they voted against.
    Colleagues, that is some serious chutzpah. So the Senate 
now has the choice. It is about fairness for the tens of 
millions out of work. It is about fairness for African 
Americans, who are disproportionately suffering. It is about 
fairness to the blue-collar worker who looks around and sees a 
whole lot more support going to a bunch of multinational 
corporations than to hard-hit workers like them who have done 
nothing wrong.
    The only choice is to make an extension to supercharged 
unemployment benefits, and to do it now.
    Mr. Chairman, I look forward to our witnesses. And again, I 
want to thank you for scheduling the hearing.
    [The prepared statement of Senator Wyden appears in the 
appendix.]
    The Chairman. Thank you, Senator Wyden.
    Our first panel is one person, our Secretary of Labor, so I 
will give a short introduction. Secretary Eugene Scalia was 
sworn in as Secretary of Labor September 27th last year. He has 
served in a number of high-level positions in and out of 
government prior to his appointment.
    He has served as Solicitor of Labor, the Department's top 
legal officer; also, as a Special Assistant to the Attorney 
General; and as a partner at a law firm. The Labor Department 
plays a very central role in overseeing the new Federal 
programs intended to help workers and their families respond to 
the virus pandemic.
    Secretary Scalia, please proceed.

   STATEMENT OF HON. EUGENE SCALIA, SECRETARY, DEPARTMENT OF 
                     LABOR, WASHINGTON, DC

    Secretary Scalia. Chairman Grassley, Ranking Member Wyden, 
and members of the committee, thank you for the invitation to 
testify today.
    Last Friday, the Labor Department issued a very encouraging 
jobs report: 2.5 million jobs were created in May, versus 
expectations that we would lose 7.5 million jobs. The 
unemployment rate dropped nearly a point and a half, instead of 
rising 5 points as projected. Moreover, the survey period for 
that report ended in mid-May. Since then, many, many more 
Americans have returned to work. Our economy has turned the 
corner against the coronavirus. All of us welcome that news, 
and we celebrate it, Ranking Member Wyden, not because we think 
the job is done but because we know the situation has begun to 
improve more robustly and earlier than had been expected.
    But we are also mindful that millions of Americans remain 
out of work. In mid-May, unemployment was still at 13.3 
percent. Fortunately, in March President Trump and the Congress 
acted swiftly to address the economic hardship of the virus.
    The CARES Act, as we have heard, provided an additional 
$600 a week in unemployment benefits on top of those provided 
by the States. By contrast, in the so-called Great Recession of 
2008-2009, the additional Federal payment was $25. The Act also 
extended these benefits to independent contractors and the 
self-employed, who ordinarily do not receive unemployment. And 
in the Families First Coronavirus Response Act, FFCRA, 
President Trump and Congress made a billion dollars available 
to States to help them administer their unemployment insurance 
programs.
    Ranking Member Wyden, thank you for your letter last week 
acknowledging that after these laws were passed the Labor 
Department, quote, ``took important steps to ensure these 
benefits were made available to workers as expeditiously as 
possible,'' end quote. We disbursed the billion dollars in 
administrative funding to the States within a day or two of 
each State certifying it had met the criteria set by Congress. 
This enabled the States to hire more staff and improve 
technology. We swiftly provided State guidelines on 
implementing the CARES Act. Less than 10 days after CARES was 
enacted, we had issued the essential guidance States needed to 
administer the programs. The first States began making payments 
April 4th.
    We have been in constant communication with the States, 
including 14 different webinars for State personnel. I 
personally participated in two large briefings for State 
unemployment insurance directors and have spoken with more than 
20 Governors.
    Still, we know that too many Americans have waited too long 
to receive unemployment benefits. State unemployment offices 
were overwhelmed. Before this year, the highest number of 
unemployment claims filed in a week was 695,000. This spring, 
in 2 weeks in a row we had weekly filings nearly 10 times that 
previous record high. We had 6.6 million 2 weeks in a row. On 
top of that, many States have antiquated computer systems, as 
much as 40 years old. I spoke to one Governor whose system was 
so arcane he had to bring in computer programmers from Latvia.
    Members of this committee will recall, when CARES was being 
written, that I cautioned about the age of these State systems 
and urged the Senate to use a different means, and I did 
identify different means, to pay unemployment during the 
crisis.
    Fortunately, unemployment claims are now declining. States 
have hired more staff. They have made enhancements to their 
computer systems. They are reducing the backlogs of claims. And 
Americans are returning to work.
    Going forward, our department has these goals. First, 
continuing to help States make prompt unemployment payments to 
workers entitled to them. Second, ensuring program integrity. 
We are working with our Inspector General, other Federal 
agencies, and the States to address fraud and the criminals 
preying on the system. Third, we will work with States to help 
Americans transition back to the job safely. The $600 benefit 
was an extraordinary measure to help Americans who were shut 
out of the workplace in a closing economy. As the economy 
reopens, I appreciate that members of this committee do not 
want the CARES benefit to be a deterrent to resuming work. The 
best thing for workers is work, not unemployment.
    Thank you again for this hearing on this important subject, 
and I look forward to your questions today.
    [The prepared statement of Secretary Scalia appears in the 
appendix.]
    The Chairman. We will have 5-minute rounds for questions. I 
will start, and then Senator Wyden, and then I will go down the 
list and follow the usual course we do for our hearings, 
according to first come, first served, unless you are at the 
table when the gavel falls.
    Mr. Secretary, based on all of our witnesses today, and a 
request sent by Democrats to the Department of Labor Inspector 
General yesterday, it seems that my Democratic colleagues plan 
to highlight problems Florida has had in distributing UI 
benefits. But as I remember when the CARES Act was being 
developed, you warned States would have a difficult time 
dealing with the unprecedented surge in applications for 
benefits, let alone implementing any new programs on top of 
that.
    Many of us warned State UI systems would have major 
problems, and unfortunately we were right. But it is not just 
Florida. There is one other State where I heard--the State of 
Oregon--a person running the program resigned because of 
troubles with the program. That would be another State plagued 
with issues.
    I will ask you if that is correct. But before you answer 
that, my main question is, what is your department doing to 
help put States on better footing going forward?
    Secretary Scalia. Well, Mr. Chairman, as I mentioned, there 
was just an entirely unprecedented surge in claims during the 
months of March and particularly in April. We have never seen 
anything like it in our history. It came at a time when 
unemployment had been so low that the unemployment offices were 
shortly staffed, and that added to the challenge, together with 
the technology.
    We began working with the States even before CARES was 
passed. In February we were starting to talk to States about 
ways that they could be using unemployment systems to help get 
the benefits out to people. When CARES was enacted, we moved 
very quickly in a variety of ways. We issued 19 different 
guidance documents to make the requirements clear. We had the 
essential guidance out to the States within 10 days of 
enactment. We, as I mentioned, had had a number of webinars. We 
had been essentially in constant contact with the States.
    We have also put them in touch with something called the 
U.S. Digital Service, which is a tech group within the 
Executive Office of the President. It ordinarily helps Federal 
agencies with technology problems, but we made that resource 
available to the States as well as our own Chief Information 
Officer.
    We provided them flexibilities to increase staffing as 
well, and we also moved as quickly as we could to get the FFCRA 
funding out, that billion dollars. Within a day or two of 
getting the information from the States that they had satisfied 
the criteria, we got the money out.
    So it has been a subject of great, great focus, Mr. 
Chairman, but we know that there still is work to be done.
    The Chairman. I have one last question at this point. We 
have seen in recent weeks that States are reopening businesses. 
People are adapting to new guidelines about social distancing 
and mask wearing. And these changes are allowing economic 
activity to resume in many different ways.
    You run an agency that gathers a variety of data points on 
jobs and the economy. What are some of the things that you are 
seeing in the data--and try to tell us good signs and troubling 
signs.
    Secretary Scalia. Well, Mr. Chairman, the most troubling 
sign of course has just been how many Americans have had to 
file for unemployment. It is much more than we saw, for 
example, in the so-called Great Recession of 2008-2009. We 
recognize the hardship that has meant for those people and for 
their families. That has been the most troubling thing.
    The good news we saw Friday: 2.5 million jobs created at a 
time when we thought we had lost 7\1/2\ million. That is what 
the experts were forecasting, a 10-million job swing, but 
unemployment is going down when people thought it was going to 
be going up.
    And, Mr. Chairman, that was nearly a month ago, because, as 
you know, that survey was taken in mid-May. We know that since 
then, more States have reopened. People have been returning to 
work across the country. And when I look at Friday's jobs 
report, I see very good news. For example, many in retail went 
back to work. Many went back to work in leisure and 
hospitality.
    But I see other areas where people have not yet gone back 
to work, but we can be confident they will. One is health care. 
We lost about 1.4 million health-care jobs, I believe, in 
April. We only put about 300,000 back in May. Those jobs will 
come back.
    So there still is important work to be done, but we are 
making progress, and the programs in the CARES Act are helping.
    The Chairman. Thank you, Mr. Secretary.
    Now, Senator Wyden.
    Senator Wyden. Mr. Chairman, thank you. It is going to be a 
long day, and I will just say, Mr. Chairman and Secretary 
Scalia, I have been puzzled to hear your simultaneous claims 
that workers are going back to work and that the $600-a-week 
benefit is deterring them from returning. Both these claims 
cannot be correct, in my view, and we are going to want to 
examine them.
    Now let me start this way, Secretary Scalia. Reopening the 
economy when it is safe is good for everybody's situation. The 
experts tell us, though, that if people choose to go back to 
work before it is safe, the pandemic will last longer, more 
people will die, and the economy will suffer.
    Now I believe that most employers want to do the right 
thing and keep their workers safe. But they cannot do it if 
they do not get clear guidance on what makes a ``safe'' 
workplace in the COVID era. The Department of Labor has failed 
completely on this issue. The law is clear that a person cannot 
be kicked off of unemployment if they turn down a job because 
of unsuitable conditions or health or safety risks. Enforcing 
these rules is crucial during a pandemic.
    On May 19th, along with more than 20 Senators, I sent you a 
letter about this issue. I have yet to receive a response.
    So, Mr. Secretary, let us see if we can get this off to a 
decent start. Will you commit here and now that the Department 
of Labor will provide safety-first guidance, in writing, to 
ensure that nobody loses their unemployment insurance benefits 
because of risks to their health or safety? That is a ``yes'' 
or ``no'' question.
    Secretary Scalia. Ranking Member Wyden, you mentioned clear 
guidance. That has actually been one of the principal focuses 
of the Labor Department. I know we are here to talk about 
unemployment insurance, but when it comes to health and safety 
in the workplace, through OSHA we have been putting out 
extensive guidance documents----
    Senator Wyden. My time is short, Mr. Secretary. A ``yes'' 
or ``no'' answer to the question with respect to the guidance 
that more than 20 Senators asked you about.
    Secretary Scalia. As I was saying, we have put out 
approximately 20 guidance documents on how to make the 
workplace safe so that workers can return. That has been an 
area of great focus. That clear guidance is what we are aiming 
to do.
    In terms of the return to work that you asked for, that is 
to a large extent a function of State law. We do not want 
workers coming back to unsafe workplaces. That is why we have 
made such a priority of explaining for them and for employers 
what is needed to make them safe.
    However, if it is safe, the workers should come back; we 
want them to come back. And if they feel it is unsafe, it needs 
to be something that is rooted in the facts, not just a 
generalized fear, but that is a topic generally covered by 
State law. And the States have----
    Senator Wyden. Well, we asked you about a Federal matter, 
and nobody ought to be forced to choose between their health 
and their income. And I believe States, employers, and workers 
deserve some clear safety-first guidance on the issues more 
than 20 Senators asked you about. And if you are okay with 
taking away a lifeline, sending people back to unsafe jobs in 
the middle of a pandemic, I think that is wrong, and I think it 
is inhumane.
    Now a couple of other issues, because time is short. Do 
States have the capacity right now to implement 100-percent 
wage replacement on an individual basis? As you know, we talked 
at length about this during the negotiations. You said they did 
not have it. So now we are talking about what may have changed.
    But we need to know: do States have the capacity now to 
implement 100-percent wage replacement on an individual basis?
    Secretary Scalia. Two points in response, Ranking Member 
Wyden. First, just to be clear, we have never suggested that 
workers should sacrifice health for returning to work. We 
oppose them being put to that choice as well.
    But second, as to the State systems, I would welcome the 
opportunity to talk to you about this further. You and I have 
had two or three, really from my perspective----
    Senator Wyden. Well, Mr. Secretary, we need an answer on 
the record today, because that was one of the big issues in the 
days and days of negotiations we had. I made it clear that what 
I wanted was 100-percent wage replacement.
    Secretary Scalia. And, Senator, as I was saying, we had 
some valuable conversations, from my perspective--I hope from 
yours. And I look forward to the opportunity to discuss this 
with you further. I think, actually, the States have made some 
progress and are in a different place than they were before. So 
we can talk about it further.
    Senator Wyden. But can they do it? Can they actually do 
wage replacement on an individual basis now? That was why we 
had to go to this rough justice kind of approach. And I think 
you are still telling me that they do not have the capacity to 
implement 100-
percent wage replacement on an individual basis today. And so 
that is still going to be a major issue.
    Secretary Scalia. Respectfully, sir, I did not say that. I 
said we should talk about it.
    Senator Wyden. I asked you whether they had the capacity to 
do it, and you would not answer the question. So I will look 
forward to getting anything else you would like to offer.
    So, Mr. Secretary, how many people are out of work today 
without any benefits?
    Secretary Scalia. That data is very hard to track, for a 
couple of different reasons. Ranking Member Wyden, as you know, 
the unemployment data we put out last week, for example, was 
already from 3 to 4 weeks ago. So we do not have an exact fix 
on the number of people----
    Senator Wyden. Well, what is a ballpark? You are the 
Secretary of Labor. You are the guy in charge. How many people 
are out of work without any benefits?
    Secretary Scalia. And if I could finish, the second piece 
of data that we do not have is a precise count now of who has 
received the benefits. We receive weekly reports from the 
States on that, but again, those are two very fluid pieces of 
data. I would simply be guessing if I tried to tell you as we 
sit here today compared to where we were 3 to 4 weeks ago in 
the jobs report we put out, and then with State numbers that 
again are not current either. I would just be guessing if I 
gave you a number. What we do know is that Americans are 
returning to work in large numbers. That is very good news. But 
we know there are backlogs in the numbers that will need to be 
addressed.
    Senator Wyden. Well, let me tell you what we know for sure, 
Mr. Secretary. What we know for sure is that more than 20 
million people are out of work now. And we know that about 2, 
2\1/2\ went back. And those 20 million people are 
disproportionately found in those sectors where the wages are 
really modest.
    And I gather if you and others have your way, a lot of 
those folks are going to face eviction, and they are going to 
face evictions in a matter of weeks, and we are going to fight 
for something else, which is to make unemployment benefits tied 
to economic conditions. That relates to a marketplace. That is 
something that I think we could be working on together.
    Thank you, Mr. Chairman.
    The Chairman. Senator Cornyn?
    Senator Cornyn. Secretary Scalia, thank you for being here.
    I thought we were unified as a Congress and as all 
Americans to try to deal with this pandemic, both on a public 
health and an economic front, but apparently that is not 
consistently the case. Sometimes our bad habits come back as we 
descend into partisan accusations and question people's good 
motives.
    But I would like to ask you just to remember with me what 
we did in the CARES Act, which included this enhancement for 
unemployment insurance. We were worried that not only were we 
in the middle of a pandemic, but that people, through no fault 
of their own as a result of mitigation efforts, would not get 
any money, any pay, and so we decided to make a direct payment 
to them through the Treasury Department--direct deposit.
    The second front was to make sure that we expanded and 
extended unemployment insurance benefits that would be what I 
would consider sort of a second tier of support for individuals 
who, through no fault of their own, found themselves out of 
work.
    The third thing we did was pass the Paycheck Protection 
Program, and as of now we have appropriated $670 billion to 
incentivize employers to maintain their employees on payroll.
    And then the next thing we did is, through the Federal 
Reserve, we appropriated money that they could then lend 
according to Treasury Department rules under their Main Street 
New Loan Facility. This is a historic response to an 
unprecedented situation. And I know the ranking member 
disagrees about the $600 enhancement, but there was an 
amendment that was voted on in the United States Senate. People 
were worried about what you pointed out, not wanting to 
disincentivize people from seeking work because they got paid 
more not to work. I agree with that concern.
    We should never pay people not to work. We should try to 
help them get back to work. But as I recall, the vote on the 
CARES Act was unanimous in the United States Senate. So trying 
to suggest that we did not support assistance through the 
unemployment insurance system to workers is false.
    So I just want to make one comment too about the Texas 
Workforce Commission. In my State, they are the folks who 
administer the unemployment insurance assistance. They 
experienced the kind of things that you described earlier, a 
crush of applications, and they have done the best they could. 
And they have added personnel and resources in order to try to 
be more responsive.
    But I wonder. If our goal is to try to fight this virus, 
and then also at the same time to fight the economic fallout 
associated with it, do you think there are better ways than 
incentivizing people not to work by paying them more not to 
work than to work? Are there better ways, in your opinion, to 
help people get back in the workforce?
    Secretary Scalia. Well, Senator Cornyn, first, the CARES 
Act really was, as you say, an extraordinary piece of 
bipartisan, virtually unanimous, legislation. The programs that 
you have described, I think, are part of the reason that 
workers are able to go back to work now. They were kept in 
contact with their employers through the Paycheck Protection 
Program.
    They were given financial support through the unemployment 
insurance benefit, which was a very good benefit for a closing 
economy. Savings right now are at a nearly all-time high--and 
that is because people have been kept in their homes, but it is 
also because of the benefits that were made available through 
the Treasury Department and through the unemployment insurance 
program.
    Going forward, I think the single best thing for bringing 
workers back to work will be taking the necessary steps to 
ensure the economy revives. Before there can be a job, there 
needs to be a thriving business. The President delivered us an 
extraordinarily thriving economy with record low unemployment, 
with wages that were rising, and rising more quickly for lower-
wage workers, until the virus struck.
    So I think we need to keep those policies in mind as we 
look to bring people back to work, to keep our economic base 
strong. And I know that there has also been interest--I see 
Senator Portman eyeing me intently. There has also been 
interest in possibly providing a bonus that might further 
incentivize people to come back to work, and that is something 
else that has been discussed as another way to get people back 
to work, which is always our first preference over 
unemployment, when we can provide it.
    The Chairman. Now by television, Senator Stabenow.
    Senator Stabenow. Thank you very much, Mr. Chairman and 
Secretary Scalia. Thank you for being here for this very 
important discussion we are having.
    I do want to stress at the beginning, Mr. Chairman, that 
certainly the pandemic is not over. The crisis for families, 
the challenges for small businesses, certainly are not over. 
And this I hope is going to mean that we are going to have 
additional action on the floor of the United States Senate 
throughout the continuing needs of Americans.
    I also want to add to what Ranking Member Wyden said about 
the discrepancy on the one hand, Mr. Secretary, of your saying 
that so many people are going back to work. It is great that 
people are going back to work. We certainly all want people to 
go back to work and people in businesses to reopen. But, at the 
same time you are saying people are going back to work, you 
also say the $600 extra help to workers and families to survive 
the crisis is stopping people from going back to work.
    So I think it is pretty tough to argue both sides of that. 
The reality, as I can tell you from Michigan, is that the 
provisions in the Pandemic Unemployment Assistance program and 
the additional $600 in weekly benefits have really been a 
lifeline for workers and families and employers in Michigan. 
And it is helping people put food on the table, and with their 
basic needs, and those are not just words. That is the reality 
for folks.
    I also want to say that the increase in weekly unemployment 
benefits has helped employers in our State that have signed up 
for Work Share. And I want to speak about that and get your 
reaction to that. Because in Michigan, an employer who signs up 
for Work Share can reopen at their own pace, reducing the 
employee hours by as little as 10 percent or up to 60 percent. 
The employer pays part of that wage, as you know. The 
unemployment system pays the other part of it, including the 
$600. And it has created a real incentive for people to go back 
to work.
    People want to work. People in Michigan work hard. They 
want to go back to work. But there needs to be a bridge, a way 
to be able to do this, and Work Share has allowed our employers 
to retain their talent, save money on salary costs as they are 
reopening, and ensure that employees have a liveable wage--a 
liveable wage. And that is over 1,400 businesses so far in 
Michigan using Work Share, as well as over 70,000 jobs.
    So, Mr. Secretary, instead of debating whether or not we 
should allow the CARES Act to have strong unemployment 
provisions or whether or not they should expire, I hope we 
would be talking about Work Share being expanded. You know it 
is 25 States now that need to be expanded. So could you speak 
about how you could further lower the barriers so more States 
can develop their own Work Share programs, and what you are 
doing to promote that?
    Secretary Scalia. Thank you, Senator. First, I agree that, 
although Friday's jobs report was exceptionally good news, the 
economic challenges that Americans are facing as a result of 
the coronavirus are not over. Our job at the Labor Department 
to help the States make sure people get unemployment benefits 
is not over, nor is our job to work with the States to help 
people return to work. So we very much appreciate that.
    But with that said, that report is one to be celebrated for 
what it tells us about how robustly and how early our economy 
began reopening in May. The $600 benefit, as I have said, was a 
really important thing that this committee, the Congress, and 
the President did to help workers during a closing economy, and 
I actually agree that there are a number of reasons that 
workers should prefer to be back at work----
    Senator Stabenow. If I might--just in the length of time 
that I have, could you speak to Work Share and whether or not 
you are reaching out to businesses to let them know about this 
as an important way to be able to bring people back to work 
while maintaining a liveable wage for workers? Is that 
something you have been focused on?
    Secretary Scalia. It is something that we have looked at, 
Senator. Ordinarily the concept behind Work Share is, it is a 
way of helping a company that might have to have layoffs to 
keep people on a part-time basis. But we do agree that it can 
be a way of bringing people back, albeit on a part-time basis. 
It might work well in a restaurant, for example, that cannot go 
to 100-percent capacity.
    We have been speaking to the States about doing that, and 
about working with them to help set up those programs. But just 
to finish on the $600 benefit, because I want to be clear, it 
was an important thing to do to help workers back in March.
    What we are talking about now is, Congress set it to expire 
in July, and my point is simply, that recognizes we will be in 
a very different place in July, where the opportunity for 
people to return to work will be far greater.
    Senator Stabenow. If I might, there is one other thing I 
want to ask, and that relates to safety in the workplace. 
People want to go back to work. They have a right to know that 
their workplace will be safe. And in fact, if there is a 
concern from workers that their workplace is not safe, they 
should not have to return until it is.
    And I am very concerned that the guidelines you talked 
about are voluntary guidelines. They are not enforced. They are 
not a requirement of the CDC or OSHA to make sure that 
workplaces are safe. There is not strong enforcement. And so 
what we have seen over and over again is people in workplaces 
getting COVID-19, being infected. Health-care workers, over 
38,500 health-care workers have been infected; 358 and more 
dead as a result of that.
    We know that in meat-packing plants we have had over 2,000 
people test positive and workers who have died because there 
are no requirements to keep people safe in the workplace.
    So people just want two things. They want to know they will 
be paid for their work a liveable wage. And they want to know 
it is safe. So I want very much for you to tell us that you 
will enforce safety standards for workers in this country as 
they go back to work.
    Secretary Scalia. Absolutely we will. We have put out 
extensive guidance to help workers and employers understand 
their rights and obligations, but we also have rules and 
statutory authorities to enforce. We are conducting 
investigations, and we are responding to whistleblower 
complaints to keep workers safe on the job.
    Senator Stabenow. Thank you.
    The Chairman. Before Senator Thune starts, I am going to 
ask Senator Wyden, when Thune is done, would you call on 
Senator Menendez? I am going to step out just a minute.
    Senator Thune?
    Senator Thune. Thank you, Mr. Chairman. And thank you, 
Secretary Scalia, for taking time to be here today. This is 
important oversight. This is what we have talked about, hearing 
from those who are implementing the many bills that we have 
passed, what is working and what is not working, how we can 
improve, what we can do better. And I think that will shape and 
inform and guide our decisions about future action that 
Congress might take.
    On the forefront of the coronavirus pandemic, we have 
passed now four pieces of legislation--if you count last week, 
five--to address the coronavirus medical emergency and the 
economic fallout associated with the pandemic. These bills are 
providing assistance to the American people through economic 
impact payments, loan deferments, other programs and tax 
incentives to help businesses keep individuals employed.
    I think that has been working. Obviously, we cannot start 
spiking the ball yet, but the numbers that we saw last week 
were certainly encouraging, and I think were evidence that some 
of these programs, particularly the Paycheck Protection 
Program, have had the desired effect. It is keeping businesses 
functioning and keeping workers employed.
    Mr. Secretary, it has already been noted that businesses 
began reopening their doors and that many are struggling to 
rehire furloughed workers due to the disincentive created by 
the $600 per week supplemental unemployment payment for 
individuals who are supposed to be ineligible for unemployment 
insurance if they turn down an opportunity to return to work.
    What are some of the challenges that you envision States 
facing in identifying instances of individuals collecting 
unemployment benefits after refusing an offer to return to 
work?
    Secretary Scalia. Well, Senator, if I could say, first of 
all, I think there are many reasons that workers will want to 
go back to work. I think, all things equal, people like being 
at work, especially perhaps after having been at home for 2 to 
3 months. So I think Americans are excited to get back to work.
    But as anybody who has studied the unemployment insurance 
programs knows, at the margins there is always a certain 
population--particularly if there is an opportunity to have an 
equal or greater income not working--there are a certain number 
of people who will choose not working. And that is a challenge 
that is recognized to exist, and particularly as we look toward 
a reopening of the economy after the expiration of the current 
benefit in July. It is something that needs to be kept in mind.
    We have been reinforcing with the States, Senator, from 
very early on, their obligation to ensure that people who are 
on unemployment certify that work no longer is available, to 
coordinate with employers that are calling people back to work. 
This is an unusual circumstance where we have hundreds of 
employers at a time in a State bringing workers back. And so 
that's an opportunity for the State unemployment insurance 
agencies to take note that the jobs are returning and the 
workers can return too. We would like them to keep an eye on 
that. And then as I mentioned, we have been spending a lot of 
time, including working with our Inspector General, to address 
the possibility of fraud in the unemployment insurance system. 
Employers, or supposed employers, are engaged in it. Third 
parties are engaged in it, and sometimes workers are too. That 
is something we have been asking the States to look into as 
well.
    Senator Thune. Good; thank you. As you well know, 
unemployment offices in States across the Nation continue to be 
overwhelmed with claims, even as Americans begin returning to 
work, and in addition, States' unemployment systems are dated. 
These two factors will likely make any additional changes to 
unemployment programs potentially overly burdensome on State 
unemployment agencies.
    So could you explain a little bit about what worked after 
passage of the Families First Coronavirus Response Act and the 
CARES Act in terms of the Department of Labor helping States 
adapt to some of the system changes that are required by these 
two laws?
    Secretary Scalia. Sure. FFCRA provides us a billion dollars 
to give to States to help with unemployment insurance 
administration, and they were able to use that money for 
staffing and also for technology enhancements. I made it a 
priority of the Department to disperse those funds absolutely 
as quickly as we could, and I think that we succeeded in doing 
that, and that did help.
    The flexibility they had to bring in staff was certainly 
helpful to them. They were in a period where unemployment had 
been so low there was not a need for much staff. They needed to 
bring people in quickly and train them. Over time, they were 
able to do that.
    Then as I mentioned, there were technology problems. We 
found that there was a problem with a computer program we run 
called ICON, which the States use. We fixed that over a 
weekend, within 3 or 4 days of learning of the problem. We were 
able to remedy that, and that at least helped the States deal 
with one of the technological hurdles they faced.
    As I mentioned, we also put them in touch with our Chief 
Information Officer, and with something called the U.S. Digital 
Service to help with technology as well.
    Senator Thune. Mr. Chairman, my time has expired. I would 
like to submit for the record a question dealing with the gig 
economy and gig economy workers, how they have been dealing 
with this. Thank you.
    The Chairman. Okay, your questions will be received.
    [The question appears in the appendix.]
    The Chairman. Now, Senator Menendez, by TV or whatever, or 
virtual, or whatever you call it.
    Senator Menendez. Thank you, Mr. Chairman.
    Mr. Secretary, I share some of the concerns that the 
ranking member raised, Senator Wyden. I think it is fair to say 
that if you have an amendment that strips the $600 and every 
Republican votes for it, that was your intention. You did not 
want the $600 to be part of the unemployment compensation.
    But what I am concerned about is that it seems to me that 
these rosy expectations that everybody will be able to go back 
to work are just not going to be realized by August 1st. I live 
in a State that has the second largest number of COVID-19 
deaths and infections. It is going through a staged reopening.
    That means that many businesses still will not be open by 
then, or they will be opened with less capacity by then, which 
means that they will require less workers by then. And so if 
that is a reality--and we have seen where there has been a 
premature opening in States that in fact we ended up with a 
higher COVID infection rate as a result of the premature 
opening.
    So you know, when we have a national unemployment rate of 
13.3 percent, when the unemployment rate among African 
Americans is even higher, 16.8 percent, when unemployment among 
Latinos is even higher than that, 17.6 percent, what is the 
administration's plan for August 1st?
    Secretary Scalia. Senator Menendez, thank you for the 
question. I think part of what we would like to do is watch how 
things develop over the weeks ahead. One of the really striking 
things about the Nation's experience with coronavirus has been 
how swiftly things change.
    And in the early weeks, unfortunately those were a series 
of swift changes for the worse, as the health problems 
increased greatly, and of course as we very suddenly----
    Senator Menendez. Mr. Secretary, we know there is going to 
be a cliff on August 1st. Why should we wait to address the 
cliff until after August 1st rather than before it?
    There is no question that unemployment is still going to be 
very high on August 1st, no matter how well we might desire it 
to be different. And so for all those workers who either cannot 
get back to work because their phased reopening has not opened 
their former place of employment, or the phased reopening has 
only allowed, for argument's sake 50 percent of the employees 
to come back, or there is still a risk, a reasonable risk, a 
serious risk of contraction of the infection, what are we going 
to do on August 1st?
    Secretary Scalia. Well, as I was saying, things have 
changed quickly for the worse for a period of time, but now we 
are seeing that things have the capacity to change quickly for 
the better.
    We know where the economy was in mid-May. We will know more 
when our next jobs report comes out in early July about the 
state of the economy. I think, based partly on that, we can 
make an assessment of what measures, if any, could be necessary 
after July 31st. I recognize that, as you said, we will not get 
back to the extraordinary economy that President Trump brought 
us of 3.5-
percent unemployment. We will not get back there in early fall.
    Senator Menendez. Let me turn----
    Secretary Scalia. But we will know a lot more as we come 
into July. And I think at that time, we can take an assessment 
of the appropriate measures.
    Senator Menendez. If I could reclaim my time, Mr. 
Secretary--I am not going to let you filibuster my time. We are 
in the phases of reopening. How many coronavirus-related 
complaints has OSHA received?
    Secretary Scalia. I do not have----
    Senator Menendez. My understanding is it is 5,000. Is that 
correct?
    Secretary Scalia. We have received several thousand. I do 
not have the exact number----
    Senator Menendez. How many coronavirus citations----
    Secretary Scalia. I am sorry, Senator. I am just trying to 
complete my answers.
    Senator Menendez. How many coronavirus citations have been 
issued by OSHA?
    Secretary Scalia. We have issued one citation to date----
    Senator Menendez. One citation?
    Secretary Scalia. I would add that we have a 6-month 
limitations period. Of course it has been less than 6 months 
since the virus came here, so we have a number of cases that we 
are investigating. And if we find violations, we will certainly 
not hesitate to bring a case. This is something I----
    Senator Menendez. It seems to me, Mr. Secretary----
    Secretary Scalia [continuing]. Have talked to our head of 
OSHA about a number of times.
    Senator Menendez. It seems instead of ``guidance,'' you 
should be issuing emergency, temporary standards that are very 
clear under OSHA and that would make a clear example of what is 
acceptable to return to work safely and what is not acceptable, 
and those who are forced to return to work in a situation that 
is unacceptable will have a valid claim. One out of 5,000 is 
unbelievable.
    The Chairman. Senator Toomey, by TV.
    Senator Toomey. Thank you, Mr. Chairman.
    Mr. Secretary, thanks for joining us today. I just want to 
be clear about something. According to the University of 
Chicago, about 68 percent of people who are unemployed today 
make more money being unemployed than they do being employed.
    Is it your view that that is a disincentive to going back 
to work?
    Secretary Scalia. Thank you for the question, Senator 
Toomey, and I unfortunately was not able to complete my answer 
to that point to Senator Menendez. That can function as a 
disincentive. That is recognized by people who follow 
unemployment insurance programs.
    I would point particularly to the study that the chairman 
received from the Congressional Budget Office that looked at 
this question, in which it projected that for the second half 
of the year, if the $600 benefit were retained, five out of six 
people on unemployment would be receiving more than the wage 
they were likely to get from working. And I do not think many 
people would design an unemployment system that operated in 
that way, and that is why this discussion makes sense.
    Senator Toomey. And we have had unemployment before. There 
is always some level of unemployment. We have never said, ``Let 
us make sure that people are paid more not to work than they 
get paid working.''
    We hear everyone talking about how they want to get 
everyone back to work, but at the same time some people are 
advocating a system that we know discourages people from going 
back to work.
    And is it not also true that if people affected by this 
disincentive do not go to work, then it is not only they who 
are not back at work, but the mere fact that they are not at 
work means other people are unable to go back to work just 
because the economy is that much slower and there is less 
business being conducted?
    So does that not have a knock-on effect throughout the 
economy?
    Secretary Scalia. That is correct, Senator. We want people 
who are not able to get to work to have the safety net of an 
unemployment program. But you are right. If people have the 
opportunity to return and do not, it can function as a 
hindrance not just to them but to the functioning of what is a 
very, very interconnected economy.
    Senator Toomey. So let us focus on some great news, because 
there is a lot of great news actually. One thing is the fact 
that we have had quite a number of States that have been quite 
open for business, some for many weeks now. It is not the case 
that the entire country is closed down. In fact, there is a 
long list of States that began their reopening in April and 
early May. And is it not true that there is no big spike of 
COVID cases in the States that have gone a long way towards 
reopening?
    In fact, the data shows that the decline in the new cases 
in COVID-19 has continued overwhelmingly in these States. Is 
that your understanding?
    Secretary Scalia. The reopening seems to be going well, 
Senator. It is very encouraging. There are spots we need to 
keep an eye on, and we need to be safe about how we go about 
it. But it has been very encouraging.
    Senator Toomey. The other thing that has been very, very 
encouraging is the fact that, back in mid-April, we had a week 
where we produced 2\1/2\ million new jobs when we thought we 
might be shedding 6, 7, 8, 9 million jobs. It was the exact 
opposite.
    And is it not true that that mid-April number--look, I do 
not have a crystal ball, but I do know that many States moved 
in the direction of reopening since that time. And so it stands 
to reason, if our economy was producing 2\1/2\ million new jobs 
in a week back in mid-April, that it has been probably 
producing new jobs since then. And when I say ``new,'' 
obviously we are really talking about people getting back to 
their old jobs. But is there not good reason at least to be 
hopeful that we are starting to really climb out of this and 
starting to create the opportunities for people to go back to 
earning their livelihoods?
    Secretary Scalia. Absolutely, Senator. One of the numbers 
that has caught my attention in both the report for the month 
of April and the report for the month of May is a very high 
percentage of workers who are unemployed but believe it is 
temporary.
    In our report for the month of May, nearly 85 percent of 
workers who had been put out of work said, ``This is temporary. 
I am going back to my job.'' And I regard it as one of our most 
important missions right now at the Labor Department to help 
make that happen, and to make it happen safely.
    Senator Toomey. Thanks very much. Thank you, Mr. Chairman.
    The Chairman. Now I call on Senator Cardin, by TV I 
believe.
    Senator Cardin. Thank you, Mr. Chairman. And, Mr. 
Secretary, thank you very much.
    First, let me share the concerns that have been expressed 
in regards to worker safety. To me, that is one of the most 
important roles that you have, to make sure that workers are 
safe.
    Secondly, let me underscore what I believe is our need to 
act, that the job is not done. Whether it is unemployment 
insurance, or whether it is the PPP program, the small business 
aid, or whether it is the tax code itself, we know that we are 
going to need a transition from where we are now to when our 
economy is fully performing. So I just urge us to show a sense 
of urgency.
    Thirdly, I want to just underscore the point that Senator 
Stabenow made in regards to the short-time compensation rules. 
That gives an employer an opportunity to share work so that he 
or she can keep the workforce intact during these tough times.
    So, Mr. Secretary, I would hope that you would give some 
personal attention to how we can implement this provision, 
because I do think it helps us transition back to when our 
economy is in full performance.
    I want to get your response to a question I had from the 
Governor of Maryland in regards to implementing this program. 
Maryland, like most States, had IT challenges because they are 
trying to put the State program in with the Federal program. 
But it was the Interstate Connection Network, ICON, that did 
present some original challenges. And I believe you have 
indicated that there were startup challenges in regards to 
ICON. But in addition, there have been changes in guidance 
given by the Federal Government which have required our States 
to change their IT programs.
    Can you share with us how you are working with the States, 
the current status of ICON, and the IT capacity of our States 
in order to get timely decision-making? We still have in 
Maryland a lot of people who are waiting for determinations. 
What is the current status of that?
    Secretary Scalia. First, I agree with you that our job is 
not done in helping workers during this challenging time, and 
in fully restoring our economy. And I agree as well on the 
importance of worker safety.
    I think there is a difference as to means perhaps, but it 
is something that has been of great, great focus at the 
Department of Labor. And by the way, I have personally engaged 
in the Work Share subject and looking at ways that we can 
encourage States to do that, and I have assisted in that.
    With respect to the ICON system, which you mentioned, yes, 
there was a problem that came to our attention. We fixed it 
within days. I have had a couple of conversations with Governor 
Hogan who, as you know, is also Chair of the National Governors 
Association.
    He has never expressed any concern to me about changes to 
the guidance that we have provided. I am not aware of any 
changes that he might be referring to. We have put out a great 
deal of guidance. I suppose some of that guidance made certain 
points clearer than they might have been before, but I think we 
have largely been unswerving and clear in the guidance as we 
have given it, although we have provided refinements as they 
have been requested.
    And finally, with respect to the technology, I appreciate 
that that has been a challenge for the States. As you heard 
Ranking Member Wyden say, that was something I cautioned the 
members of this committee about when CARES was written, that 
the State unemployment insurance computer systems are really 
old. They are bulky. But we have tried to help by making our 
Chief Information Officer available, by making the U.S. Digital 
Service within the Executive Office of the President available 
to States. And we do believe that States have found fixes, have 
found work-arounds.
    We worked, for example, with Florida on one which related 
to a problem they were having with ICON. And we also worked 
with New Jersey on one that related to ways that certain forms 
were being submitted through their system.
    So those systems have been problematic, but I think they 
have been enhanced in the last few weeks.
    Senator Cardin. Can I follow up on the certification 
requirements? Have you had concerns expressed by States that 
the weekly certification to make sure that the recipient is not 
getting benefits in more than one State has caused undue 
challenges to the States in implementing the program?
    Secretary Scalia. Senator, we have had some States that 
have expressed interest in doing away with the certification 
requirements. And we understand the desire that they have had 
to get payments out quickly. But there is a balance to be 
struck with respect to the integrity of these programs. And we 
felt it was important to retain that certification requirement 
as one check against the fraud against the system that we know 
has occurred.
    There has been very substantial fraud, we have learned, 
against the unemployment insurance systems of the States during 
implementation of CARES. And so we do need to keep that in mind 
as well.
    The Chairman. Senator Cassidy?
    Senator Cassidy. Thank you, Mr. Chairman.
    Mr. Secretary, again thanks for the hard work you and your 
department have done. One of the advantages, if you will, of 
speaking after many other people--you know the concern. 
Republicans are concerned that $600 a week in which people are 
earning more than they are paid would encourage them not to 
work. And that has negative effects for the person and negative 
effects for society. That is known. But it has been roughly a 
kind of Republican/Democrat split, with Democrats apparently 
pooh-poohing that. Just to see if there could be an objective 
analysis, aside from the report from CBO, I found a quote from 
Professor Larry Summers, who was Obama's, I think, director of 
something or other--everybody knows who Professor Summers is. 
``Government assistance programs contribute to long-term 
unemployment by providing an incentive and the means not to 
work. Each unemployed person''--and note this term--``has a 
reservation wage, the minimum wage which he or she insists on 
getting before accepting a job. Unemployment insurance and 
other social assistance programs increase that reservation 
wage, causing an unemployed person to remain unemployed 
later.'' Again, Larry Summers, who is esteemed, and from 
Harvard, and with Obama, et cetera.
    Now let me ask you, sir, what would be--if the $600 a week 
pandemic unemployment benefit is extended through the end of 
the year--what do you estimate the reservation wage is that a 
business must offer to someone on unemployment to convince them 
that they should return to work? And is this a wage most 
businesses would be able to match, or even bear, if they are a 
small business?
    Secretary Scalia. Thank you for the question on this topic, 
which obviously is of great interest to members of the 
committee.
    Senator, if I could, I would like to be clear again that 
the $600 benefit that was provided in the CARES Act was one of 
the really very important good things done in that act. It was 
the right thing to do at that time in a closing economy. And I 
am mindful of the concerns, and I heard members of this 
committee expressing at the time that that might result in some 
people turning down work.
    We have made a priority of the Department working with the 
States to focus on the existing protections in the law to make 
sure that does not happen. However, much of the discussion that 
I think we are having now is looking ahead, as your question 
does, not to what we put in place but what, if anything, will 
be done when the $600 benefit expires on the deadline of late 
July that the Congress agreed to set.
    I have not read Professor Summers's piece. He is obviously 
a highly respected economist----
    Senator Cassidy. It is an older piece; I do not think he is 
saying it right now. [Laughter.]
    Secretary Scalia. Maybe he has recanted. But you are 
correct. At the margins, again, for some number of employees--
and I am not talking about the millions of hardworking 
Americans who would rather be at work--but for some number of 
employees, you will have to set that wage higher, substantialy 
higher perhaps, to----
    Senator Cassidy. Do you have a sense of what that would be?
    Secretary Scalia. I do not. I do not have a sense of what 
it would be, but it would be probably appreciably above 100 
percent of what the work would compensate.
    Senator Cassidy. I do not think anybody is criticizing 
anybody for making a rational individual decision. If I make 
more money not working, I am not going to work. That is a 
rational decision. It is just that we know that working 
actually, statistically, is good for people. So I do not 
think--you know, I am not asking you to do that.
    Now some folks have said, ``Wait a second; we cannot 
continue this forever.'' Is there a way to gradually scale it 
down so that, yes, we provide support but we encourage people 
to return back to the workforce, which is good for the family, 
good for the individual, good for society?
    But I am struck with what you have said about the 
inadequacy of State information systems. Are State unemployment 
systems capable of a system that would gradually scale down the 
amount of benefits received from month to month?
    Secretary Scalia. I believe that the States have made 
progress in their systems from where we were in March. And I 
was explaining to Ranking Member Wyden that this was something 
that I would be interested in exploring further with the 
committee.
    I think there may be a greater capacity now than there was 
in March for the systems to scale, or for the Treasury 
Department, for example, to assist in that. That was an 
approach that we had raised at the time that CARES was being 
considered, that there might be a way for the Treasury 
Department to function as part of the distribution system.
    But there also, as you know, Senator, has been discussion 
of perhaps having a smaller benefit, maybe not $600 but perhaps 
$250. I have heard that----
    Senator Cassidy. But the question is, could you scale it 
down?
    Let me move on to my last question. I am almost out of 
time. There have been a lot of layoffs. The job numbers 
actually were great, but in the public sector we continue to 
have people laid off. And as it turns out, many of those are in 
the education system.
    Now when you go back, it is clear there will be smaller 
classrooms with more assistance in order to help the children 
maintain social distancing, et cetera. Senator Menendez and I 
have put together a SMART Act, which would help these State and 
local governments rehire these employees. But do you know how 
many of these 1 million or so State and local employees in 
education have lost their jobs or are on temporary furlough? Do 
they expect to be rehired, or have they been let go entirely? 
Do you have any sense of that?
    Secretary Scalia. I do not have those figures. I could get 
them for you. Government jobs were the one category of jobs 
with very substantial losses in May. I think it was about 
600,000 jobs, actually. And many, many of those jobs were in K-
12 education and in college.
    So I could try to get more detailed data, but I know that 
many of the jobs lost in May were in that sector. But I am also 
confident that those are probably all jobs that will come back 
as schools reopen.
    The Chairman. Senator Brown, by TV.
    Senator Brown. Thank you, Mr. Chairman. We are learning the 
technology here. Thank you so much, Mr. Secretary. Thank you 
for being here.
    Ranking Member Wyden and I, along with 22 of our 
colleagues, sent you a letter dated May 14th outlining concerns 
about UI benefits being delayed in so many of our States, that 
$600. And I would point out, in spite of all my Republican 
colleagues on this committee talking about how they like that 
benefit now, they all but one voted against it. The only 
amendment Senator McConnell did allow on the floor on the 
entire CARES Act was to wipe away the unemployment benefit on 
that $600. So they can take credit for doing it, but now they 
are against it. It is just something to remember about who is 
on the side of workers.
    But anyway, we outlined--we saw too many States, too many 
people were not getting the benefits. They were delayed. Our 
letter asked you to undertake a critical survey of State 
unemployment programs so we can fix the problems that caused 
the delays and make sure they do not happen again.
    Would you, Mr. Secretary, commit to conducting that survey 
that 23, 24 members of the Senate asked for, providing policy 
recommendations and responding in a timely fashion?
    Secretary Scalia. Senator Brown, thank you for that letter. 
I believe it gave us a mid-July return date. You asked for 
certain information within 60 days. Because I do not have the 
letter in front of me, I am hesitant to commit that we will 
provide every piece of detailed information that was sought. 
But we certainly will respond to that letter.
    Senator Brown. Thank you.
    Secretary Scalia. I understand the concerns that you have.
    Senator Brown. I think that you and I share, and all of us 
share, an interest in making sure that we can fix this UI 
system which has had a workout that nobody expected it to have, 
but also a UI system that has gotten pretty outmoded and 
outdated over the years. So thank you for that.
    My second question: the national unemployment rate is over 
13 percent. The unemployment rate for the Latin worker is 
almost 18, and almost 17 for black workers. If we phase out the 
unemployment insurance program in the CARES Act, including the 
$600 weekly benefit which ends in July, do you expect black and 
brown workers to be disproportionately affected by that policy 
decision? ``Yes'' or ``no''?
    Secretary Scalia. Senator Brown, I do agree with you on the 
State unemployment insurance systems. As I said, I think there 
has been significant progress made. But as we look back at 
lessons learned and things that we might want to fix going 
forward, I do think that is an area that is worth further 
consideration, how they can be enhanced.
    In terms of the job prospects for African Americans, 
Hispanic Americans going forward, that will depend in part on 
different parts of the country's' reopening schedule, different 
sectors of the economy.
    What we do know is the economy that we had before, which 
President Trump was instrumental in building----
    Senator Brown. Mr. Secretary, I am going to interrupt you. 
I have heard your commercial----
    Secretary Scalia [continuing]. Was an economy that achieved 
record low----
    Senator Brown. Mr. Chairman, I want----
    Secretary Scalia [continuing]. Unemployment for African 
Americans and Hispanic Americans----
    Senator Brown. Mr. Secretary, we have heard--Mr. Chairman, 
we have heard the Trump commericial----
    Secretary Scalia [continuing]. And that is the objective 
once again.
    Senator Brown. Mr. Chairman, would you gavel the witness, 
please? We have heard the Trump commercial over and over, how 
great the economy was, even though many Americans did not have 
$400 in their pockets, even in the great growth of the Trump 
economy, which was not nearly as good as the Secretary likes to 
keep saying.
    It is clear that brown and black workers will be 
disproportionately affected. I mean, that was a simple ``yes'' 
or ``no,'' and I got a commercial for the President's re-
election.
    Next question, Mr. Chairman. Some have argued that that 
$600 is going to keep workers from going back to work. It is a 
pretty clear takeaway here. The companies they worked for did 
not pay them enough to begin with.
    So, Mr. Secretary, if we raise the Federal minimum wage to 
$15 an hour, would you expect the number of workers who receive 
more in UI than they did in their paychecks to decrease? That 
is a pretty easy ``yes'' or ``no.'' If we raise to $15, will 
that make more workers make more on the job than they are 
getting in UI?
    Secretary Scalia. Not necessarily. The UI payment right 
now, with the $600 plus-up, averages between $50,000 and 
$55,000 a year in unemployment insurance. That is substantially 
more than is made in employment----
    Senator Brown. Well except, Mr. Secretary, they do not----
    Secretary Scalia. And in fact, if I could finish--if I 
could finish--in fact, the $600-plus-up alone is substantially 
more than the minimum wage on an annualized basis. But you 
have, in addition to that, the State payment. So unfortunately, 
I do not think that is a help----
    Senator Brown. I can see, Mr. Secretary--I can see what a 
good lawyer you were as a corporate lawyer, but the fact is, it 
is not $55,000. It is 39 weeks; that is the maximum, but let us 
put that aside.
    I wanted to say----
    Secretary Scalia. I was annualizing the benefits.
    Senator Brown. Senator Menendez pointed out how outrageous 
it was--he pointed out that you have received 5,000 complaints 
from workers, terrified they are going to get coronavirus on 
the job and then have to go home and potentially expose their 
families, and you have only done one citation.
    I would like to ask you to submit to this committee, and my 
office, the list of all on-site, in-person inspections as a 
result of a complaint received by Federal OSHA. I would like 
you to submit a running total as you do these inspections.
    I mean, we know what the President said when we saw what 
happened in Sioux Falls with hundreds of people diagnosed with 
coronavirus at the slaughter house, and the President using the 
Defense Production Act ordering them back to work. Nothing 
about worker safety. Nothing about slowing down the line. 
Nothing about food safety. And that, I think, tells the story.
    I will just close with this, Mr. Chairman. We are in the 
midst of a pandemic. We have a President and an administration 
that call workers essential but treat them like they are 
expendable. The President said last week the unemployment 
numbers are, quote, ``stupendous.'' In reality, they are the 
worst since World War II. In Ohio, they are opening up eviction 
courts, actually in arenas, if you can imagine that.
    We have learned from the DOL in this hearing that they have 
issued one citation--one citation--showing how much they really 
care about workers. The Attorney General, over the weekend, 
said there is not any institutional racism in policing.
    I do not know how he figures that. We should not be cutting 
off the safety net workers need to pay their bills. We cannot 
allow the administration to continue its 4-year-long betrayal 
of workers.
    The Chairman. Senator Bennet?
    Secretary Scalia. Mr. Chairman, I am sorry, but could I 
respond to that?
    The Chairman. You may respond to it. Before you respond to 
it--well, no, go ahead and respond to it.
    Secretary Scalia. We have----
    The Chairman. And then Senator Bennet.
    Secretary Scalia. We are investigating every single 
complaint that we receive from workers about unsafe conditions 
pertaining to COVID. We have a 6-month limitations period, and 
when we find violations, we will indeed bring citations, if we 
find them. We have the tools needed to do that. We also have, 
as I said, a 6-month limitations period.
    So we will--we will do that work. That said, I think it is 
a real disservice for people to suggest that OSHA is not taking 
this seriously. Employers need to know that indeed we are, and 
they do need to protect their workers. And we want workers to 
know that if they have complaints, please do bring them to us. 
If they think that they have been subject to retaliation from 
raising health concerns, please do bring them to us.
    So I want to correct any impression that people listening 
might have that OSHA is not indeed taking these matters very 
seriously.
    The Chairman. Anybody can correct me if I am wrong, but I 
heard Senator Brown say that the President used the Defense 
Production Act to order the workers back to work. He ordered 
the companies to get the company up and running. The only way 
you are going to get workers to go back to work is if they 
realize that they are not going to go into a death chamber when 
they go back to work, and that was the company's response to 
that----
    Senator Brown. Or, Mr. Chairman, if they think they are 
going to lose their jobs if they do not return back to work. I 
mean you cannot--workers are going to go back if they think 
they will lose their job and will not get their unemployment 
benefits.
    The Chairman. Well, he did not correct me, but go ahead, 
Senator Bennet.
    Senator Bennet. Thank you, Mr. Chairman. Thank you, 
Secretary Scalia, for being here. We appreciate it. And I am 
grateful for the response to Senator Brown's question. I think 
it is critically important, because if people do not think they 
are going to be safe, if they do not think health is going to 
be enforced at work, they are not going to go back to work.
    And what I heard you say, Secretary Scalia, is that you 
want OSHA on the job. You want people to know that they can 
file complaints if they have been mistreated at work in this 
context, and that you will report to the committee the work 
that OSHA is going to do or has not yet done.
    I think that is very important to all of us, and we want to 
know it. We want to know what the facts really are, because it 
is the only way people are going to go back to work.
    I think it is clear that we are facing an unprecedented 
health-care challenge in this pandemic, and that has created 
unprecedented economic crisis in our country. One in six 
workers in this country is unemployed. By the way, I also would 
say that the Trump economy and all this stuff, the reality is 
the average monthly job creation under Donald Trump is lower 
than it was under President Obama for the first 3 years of the 
Trump administration.
    So rewriting that history here I do not think is all that 
helpful. But in this moment--and to you, Mr. Chairman, to the 
ranking member, I would say ``thanks.'' In this committee, we 
have helped workers in two major ways. First, we expanded 
unemployment benefits to cover almost 10 million self-employed 
workers, gig workers and others who are usually left behind and 
I hope will not be left behind in the future.
    Second, we added $600 per week, as we have been debating 
here together, to the normal unemployment benefit for all 30 
million workers claiming benefits. And had we not done this--
without this tens of millions of families across the country 
from Iowa to Oregon through Colorado would have seen their 
incomes drop by 60 percent, 70 percent, or more.
    And we prevented that from happening. And I know we are 
hearing criticisms today about the benefit--I just want to be 
very clear about what it has done until now. The $600 weekly 
benefit has prevented a level of severe hardship that it is 
almost impossible to comprehend--even in this hearing room.
    It paid the rent and prevented evictions. It has kept food 
on the table so families do not go hungry. It has kept the 
lights on and paid for Internet so kids can have access to 
learning. And it has been a central lifeline to families in the 
middle of the worst economic crisis since the Great Depression. 
Even President Trump seems to recognize this, because he is 
running campaign ads touting these benefits.
    But even as he is running the ads, he is also threatening 
to take them away. And I think that would be a profound 
mistake. Right now, 17 percent of American families cannot 
cover 3 months of basic expenses. Without the extra benefits, 
that number would rise to 43 percent. Today, nearly 10 percent 
of Americans cannot make rent. Without the extra benefits, that 
could rise to 30 percent. Think of what that would do to our 
economy.
    So if we let these benefits expire at the end of July, Mr. 
Secretary, I would argue that we are going to throw tens of 
millions of people who rely on them into a financial crisis, 
family by family, all across the United States of America.
    Mr. Secretary, you called expanded unemployment benefits, 
quote, ``an important short-term measure adopted in these 
extraordinary times to alleviate the economic impact of the 
virus on working Americans.'' I think you will agree, probably, 
with me, Mr. Secretary, that we are not going to create 20 
million more jobs in the next 2 months. Do you think we are?
    Secretary Scalia. Senator, I would not predict 20 million 
jobs in the next 2 months. What I do predict, and what we have 
already observed, is a very different economy than existed when 
CARES was enacted. And remember that this body itself set a 
July 31st expiration for that benefit.
    Senator Bennet. Right.
    Secretary Scalia. I think where we sit now is the recovery 
in the job market has actually happened more quickly than 
Congress expected in late March.
    Senator Bennet. Well, let us hope that is right. But I 
think that it is probably safe to say at least 10 million 
people will be unemployed at the end of July with no jobs to 
return to. I mean, does that feel to you like an extraordinary 
circumstance along the lines you described of the importance of 
the unemployment benefit in the last downturn?
    Secretary Scalia. I think that 10 million unemployed 
Americans is 10 million more Americans without a job than we 
want, and it does make sense for us to consider, particularly 
as we get closer to that July 31st date, what measures may be 
necessary.
    But if I could just underscore again, the size of the 
benefit, as valuable as it has been, as important as it has 
been--it is great. In Massachusetts, you are able with this 
$600 plus-up to obtain $75,000 a year. That is the annualized 
income that you get on unemployment in Massachusetts right now. 
In the State of Oregon, it annualizes at potentially $65,000 a 
year.
    Senator Brown asked me about the $15 minimum wage. As I 
said, the $600 weekly benefit by itself is actually just 
slightly more than that $15 minimum wage. But on top of that, 
you get the State unemployment benefit. So it has been a very 
important system, but as we look long-term, I think there few 
people who would suggest that you should have an unemployment 
system long-term that pays $75,000.
    Senator Bennet. I have gotten my last minute taken away 
from me, Mr. Chairman, so if I could just take 30 seconds to 
finish my point----
    The Chairman. I will give you 30 seconds.
    Senator Bennet. Thank you. That is all I will take. In 
answer to Senator Cassidy's question, Mr. Secretary, you said 
you thought the State departments were now up to the challenge 
of maybe dealing with a benefit that ratcheted down over time.
    I believe that it was a mistake for us to tie it to a date 
certain. I do not think that makes sense. I think what we 
should do is tie it to the economic conditions that the country 
is facing and that our workers are facing, so that when the 
economy--when the employment is going up, the benefit is going 
down; when we are doing worse, the opposite would be true.
    And I hope you will work with the committee to design 
something rational like that, because having it just end on a 
date certain is going to be very cold comfort to millions of 
people in this country.
    Thank you.
    Secretary Scalia. Senator, I would welcome the opportunity 
to continue that conversation.
    Senator Bennet. Thank you. Thank you, Mr. Secretary.
    The Chairman. Before I call on Senator Casey, who is next, 
I want to remind people that during the debate on the CARES 
Act, Senator Sasse and others put forward an amendment to the 
bill not to block the extra $600 payments, but instead to tell 
States they would have to make sure that they did not pay 
people more for not working than working. States said it would 
have taken them months to implement, so clearly States were hit 
with an overwhelming shock that was difficult for their systems 
to deal with, but no one proposed to block these extra payments 
entirely.
    Senator Wyden. Mr. Chairman, if I could, the States were 
incapable at that time of doing what Sasse was talking about, 
which is why--and you were in the negotiations--we had to go 
with a rough justice approach. And it is why we have tried to 
extricate from the Secretary this afternoon an answer to the 
question about whether the States would be capable of doing 
100-percent wage replacement now accurately. And he has not 
indicated that was the case. So I just want to--and I know we 
are going to be debating this--I just wanted to set the record 
straight.
    The Chairman. Now we go to Senator Casey, by TV.
    Senator Casey. Mr. Chairman, thanks very much for this 
hearing. And I want to thank Secretary Scalia for his presence 
at the hearing.
    Mr. Secretary, I will have a question for you regarding 
workplaces and COVID-19, but let me start with some of the data 
which we cannot escape and which we have to continue to bear in 
mind as we approach these challenges.
    When I consider just that my home State of Pennsylvania--
here is some of the data--the case number now is more than 
76,400 COVID-19 cases. The death number has gone above 6,000. 
As of today, the last number was 6,014 people dead from COVID-
19.
    In addition to that, the unemployment numbers are 
extraordinary. More than 15 percent of our--the 15-percent 
unemployment rate in Pennsylvania, 15.1, what that equates to 
is 976,000 people unemployed. We never saw those numbers--as 
bad as the Great Recession was, we never saw those numbers at 
that time.
    Now I know with regard to both COVID-19 and the economic 
devastation that flows in its wake, that we have passed, I 
guess it is technically five bills now, two by consent and 
three that we actually had a vote on. Those five bills are 
helping in a lot of ways, but more action is needed by the 
Congress.
    Unemployment benefits had a very positive impact on 
people's lives. The $600 per week additional payment, by one 
estimate, replaced 30 percent of total private-sector wages and 
salaries lost just in the month of April--so a huge impact on 
people's lives.
    Benefits, as you know, are about to end at the end of July, 
July 31st, so the benefits end but the cost for mortgage, the 
cost for food, the cost for rent, so many other costs in the 
life of a family do not end on July 31st. And I think it is 
about time we started to say that more and bear that in mind as 
we hear Senators talking about ending this program in an 
arbitrary fashion with no approach, no strategy to replace it 
or to mitigate the damage.
    And more broadly, many in the Senate majority want to stop 
legislating altogether on COVID-19 and on jobs. Now some have 
said they want to help States and local governments. There is 
some bipartisan action on a few issues. But in terms of the 
substantial help that our States still need and our communities 
and our families need, it seems like the Senate majority wants 
to walk away from that responsibility.
    I do not think that is what the American people want. And 
especially they do not want us to spend another month voting on 
nominations instead of COVID-19 and the jobs crisis. I think we 
can do better than that.
    Now, back to the unemployment rate, we know that, as much 
as the unemployment rate is high across the Nation at more than 
13 percent, it is especially high for African Americans--almost 
17 percent for African Americans, and at last count for 
Hispanics 17.6, which just happens to be the same unemployment 
rate that is in my home county, Lackawanna County, PA.
    So there is a lot of pain out there. So as we talk in this 
academic fashion about ending a program, we should acknowledge 
and be responsive to the devastation out there. We should not 
cut off unemployment insurance with no effort to mitigate the 
damage of the economic devastation so many families are facing. 
So we ought to be talking about providing pandemic premium pay 
for frontline workers who have risked their lives. All of that 
should be part of our debate.
    Now I want to ask the Secretary a question about a letter 
we sent him in May. Mr. Secretary, we sent you a letter to 
clarify whether workers who have been offered their jobs back 
would lose unemployment insurance if they refused to work in a 
circumstance where the workplace they would return to is in 
fact unsafe.
    Will the Department of Labor issue guidance to States to 
clarify that workers cannot--cannot lose unemployment insurance 
if the workplace is not safe and following CDC or OSHA 
requirements?
    Secretary Scalia. Senator Casey, it is good to have the 
chance to speak to you again. There was a lot in that question. 
Just a couple of quick comments, and I will answer your 
question.
    I agree with you. It is very important that we remain 
mindful of the impact that the coronavirus has had on workers 
and on employment. That is a focus of the staff at the Labor 
Department every minute of every working day, and those have 
been long days too.
    I do think it is important to remember that, as much as we 
want our unemployment system to function as effectively as 
possible, even better is a job. And so our long-term goal 
really does need to be getting our economy back to where it 
was. It was so vibrant through the first week of March, and 
there was actually a piece in The Wall Street Journal that just 
came out today speaking of how the economy under the President, 
which was affected by coronavirus was, quote, ``the best 
African American job market on record.'' That is how the 
Journal described it. And then that is what the numbers show.
    So we want to get back there. In terms of your question, 
Senator, the precise circumstances in which a worker can 
decline to go to work because he or she believes the workplace 
is unsafe is something that the States determine according to 
their law. The requirement is that it be suitable work. 
``Suitable work'' has to be safe.
    So the States are to judge that. There are certain broad 
parameters, but I think certainly if the worker has facts 
telling him or her that the workplace is unsafe because there 
are unmitigated COVID exposures, we would think that the worker 
should not have to go back until that workplace is made safe.
    Senator Casey. Mr. Secretary, you are the Secretary of the 
Department of Labor of the United States of America. One of the 
programs created under the CARES Act for unemployment 
insurance, the so-called PUA, the Pandemic Unemployment 
Assistance, that is a Federal program. And you have 
responsibilities beyond that when you oversee unemployment 
insurance more broadly across the Nation. Do you not feel 
that--or do you not believe that you have a responsibility to 
give guidance on something as fundamental as the safety of a 
workplace in the middle of a pandemic?
    I just think that has to be an obligation you have. I do 
not understand why you think you can just pass that off to the 
States.
    The Chairman. Please give a short answer.
    Secretary Scalia. We have given it--it is a Federal-State 
partnership.
    The Chairman. Senator Warner?
    Senator Warner. Thank you, Mr. Chairman. And, Mr. 
Secretary, thank you for appearing here tonight. I know there 
has been a lot of discussion about the bump-up on the 
unemployment assistance during the pandemic, but one area where 
I hope there is bipartisan consensus--and I appreciate the 
chairman's and Senator Wyden's good work on this--is trying to 
make sure, during the pandemic, that we cover all workers.
    I think we all now realize how many workers traditionally 
were not covered by unemployment. In my State of Virginia, 
683,000 workers who were freelancers, 1099ers, independent 
contractors, gig workers, had not been covered. As a matter of 
fact, on a nationwide basis about 20 million workers were not 
covered by traditional UI. And I do hope one area that we can 
agree on is that we need to make sure, as that part of the 
economy is not changing--we are not going away from 
freelancers, gig workers, 1099ers--that we make sure they get 
some of these benefits. And thank goodness, under the 
leadership of this committee, we did that.
    Because, while about 18\1/2\ million Americans qualified 
for traditional unemployment, over 10 million Americans 
qualified for the PUA, the expansion, and I think that lifeline 
has made a difference from, frankly, economic ruin. And again I 
hope, Mr. Secretary, that you would believe that that type of a 
program needs to be continued.
    One thing, Mr. Secretary, I want to drill down on is 
something we have been trying to get an answer for. If we all 
agree that the intent of Congress with this expansion under PUA 
was to cover all workers during this unprecedented time, I want 
to make sure that you would confirm something we still have 
some lack of clarity on. And that is, that freelancers, 
including those who work from home who have lost work, or 
domestic workers who obviously work in the home but who have 
lost work, that both of those categories are covered by the 
PUA.
    Secretary Scalia. Senator Warner, thank you for your 
attention to this set of issues, which I know is very important 
to you, both in the context of the current crisis in 
unemployment and more broadly. I do agree that one of the 
really terrific things that was done in the CARES Act--you 
know, we are hearing a lot of disagreements today, but the 
CARES Act was the product and reflection of a whole lot of 
really great agreement. And one of those great agreements was 
covering gig workers.
    There are other programs, something called DUA, Disaster 
Unemployment Assistance, that can also provide coverage, but we 
have never done anything on a scale such as that. And I think 
it was a very good thing to do in the CARES Act.
    With respect to your questions, I always need to be careful 
in addressing specific hypotheticals about particular jobs, but 
I do believe that the freelancer is something we have 
addressed. I know there has been concern about that. If 
somebody was making a living, for example, as a freelance 
journalist and was for some reason just unable to continue that 
for one of the qualifying reasons that Congress put forth in 
the CARES Act, then I would expect that person to be covered by 
what we are calling this PUA benefit for the self-employed, if 
they are not covered by the ordinary system, which they 
probably are not----
    Senator Warner. And that journalist could have been 
somebody who was working at home, so they were freelance but 
working at home. Thank you for that clarification.
    And if you could address the domestic worker----
    Secretary Scalia. With the caveat, I think that is correct, 
Senator.
    Senator Warner. If you could address the domestic worker, 
fairly briefly, because I have one other point I would like to 
make.
    Secretary Scalia. Same answer, Senator. With the caveat, I 
think that would probably be the case if one of those 
qualifying conditions was met. Although, you know, domestic 
workers may actually be covered employees under State law, but 
I think they are likely to be covered one way or the other.
    Senator Warner. Well, I know I have been working with the 
group the Domestic Workers Alliance, and I think they will be 
happy to hear your comments. And I look forward to trying to 
work to make sure that in this area at least--where we ought to 
make sure for these 20 million Americans nationally, these 10 
million who have already qualified in this pandemic--that the 
expansion of this coverage ought to be maintained.
    And I will just take my last 28 seconds--and I know I have 
tried to make the case to you, Mr. Secretary--to make the case 
to my colleagues on both sides of the aisle. I think we need 
more experimentation with these portable benefits, benefits to 
attach to the individual, that move with them from gig to gig. 
There are five members on this committee who embraced an 
experimentation on portable benefits, that we would try a 
variety of models.
    And I particularly say to my Democratic colleagues, there 
are a number of models that come out of Europe--Sweden, 
Belgium, Denmark--where these portable benefit systems are 
actually administered by labor unions and have become the 
methodology for them to move into the 21st century. This is one 
area where there is bipartisan agreement.
    I hope, Mr. Chairman, we can continue to work on it in the 
next bill, and that we go ahead and expand experimentation 
around portable benefits, because I think we are looking at the 
workforce of the future.
    Thank you, Mr. Chairman.
    The Chairman. Senator Hassan, by TV.
    Senator Hassan. Well, thank you, Mr. Chairman and Ranking 
Member Wyden. Thank you, Secretary Scalia, for being here 
today.
    As Congress responds to the impacts of COVID-19, one of the 
main issues that I hear about from New Hampshire constituents 
is delays in receiving unemployment benefits. New Hampshire is 
one of several States still working to fully implement the 
expanded unemployment benefits under the CARES Act. When issues 
arise, I hope that the Department of Labor will continue to 
support the State and help ensure that New Hampshire workers 
quickly receive the support that they need.
    My first question, Mr. Secretary, is about the unemployment 
benefits we have been discussing. As our country has responded 
to COVID-19, expanded unemployment insurance has helped to 
ensure that workers have the financial support that they need 
when measures such as stay-at-home orders are in place. As 
Senator Casey mentioned, unemployment benefits also support 
workers who themselves are sick or at an increased risk of the 
virus, helping them afford to stay out of the workplace to 
protect themselves and others.
    So, Secretary Scalia, ``yes'' or ``no,'' do you agree that 
during this unprecedented time unemployment insurance has been 
an important tool to support public health strategies to 
contain the spread of COVID-19?
    Secretary Scalia. I do agree with that, Senator Hassan. And 
in fact, in the first half of March we issued a guidance 
document, even before paid leave was made available for 
employees of small employers. In FFCRA, we issued a guidance 
document demonstrating to the States how the unemployment 
insurance system could be available to assist workers who had 
COVID or were caring for somebody who did.
    Senator Hassan. Thank you----
    Secretary Scalia. So I do agree with that. And just one 
last----
    Senator Hassan. Quickly, please, because I have several 
questions.
    Secretary Scalia. I understand. We understand the 
difficulties that the States have had processing benefits. We 
genuinely are here to help. We have been in touch with all of 
the States, but if we can do more, please have the folks in 
your State system let us know, and we will do all we can.
    Senator Hassan. Well, thank you. And I just wanted to 
follow up on your answer about the unemployment benefit being a 
public health tool. Because, despite what we think the economy 
may or may not look like in July, we do know that this pandemic 
will still be with us. And we do know that that will present 
critical challenges for our workforce as they try to balance 
this new world.
    Senator Stabenow talked about the capacity for employers to 
use unemployment benefits to supplement part-time work, which 
may in fact be very important for families where child care is 
still not available or school may not be available, especially 
if we do not provide more State and local aid as they face 
budget crunches.
    So I just want us all to keep that in mind. I wanted to ask 
you, too, Mr. Secretary, about the issue of expanded paid leave 
for many workers, and you just referenced it a bit ago. In 
addition to expanded unemployment insurance, Congress also 
enacted emergency expanded paid leave for many workers. This 
leave includes 2 weeks of paid sick leave and up to 10 weeks of 
additional paid leave for parents whose children's schools have 
closed.
    Access to paid sick leave is an important public health 
tool to encourage workers to stay home if they are sick, 
without losing their paychecks or possibly their jobs. The 
Department of Labor is tasked with ensuring that workers are 
aware of their rights to paid leave, but data has indicated 
that many workers who are eligible for this leave are unaware 
of this new program.
    Secretary Scalia, what additional actions will the 
Department of Labor take to improve its outreach in education 
to workers regarding their access to emergency paid leave 
benefits?
    Secretary Scalia. Senator, I will take a look at what 
guidance we have on that currently. I will tell you that when 
FFCRA was enacted, we engaged in a very intense campaign to 
provide guidance, answer questions for workers and employers so 
that they were familiar with the program. We put out a series 
of five, or maybe even six Frequently Asked Questions to 
provide guidance.
    We featured it prominently on the website of our Wage and 
Hour Division, and we also very swiftly put in place rules to 
implement that benefit. I will note that----
    Senator Hassan. Mr. Secretary, my time is almost up. I 
appreciate----
    Secretary Scalia [continuing]. We have recovered nearly 
$650,000 for workers, and brought benefits to approximately 500 
workers in our implementation of that program.
    Senator Hassan. Mr. Secretary--and, Mr. Chairman, I am 
going to ask for your indulgence for just a moment----
    The Chairman. Yes. You state your question, and he can 
answer it, and then we will go on to the next one. We still 
have 10 people here, so that's at least 50 minutes.
    Senator Hassan. My question is this, and it is one I will 
follow up on with the Secretary after the hearing, but I just 
want to put the question on the record.
    Why is it that we still need to have the Department of 
Labor do more? It is because people are not aware of their paid 
sick leave rights under the legislation. And I would like to 
follow up with the Secretary about the issue of workforce 
training, because since 2001, State Formula Grant funding 
levels under the Workforce Innovation and Opportunity Act have 
fallen by 40 percent as adjusted for inflation. So we are going 
to need to think about how our workforce systems can help get 
workers who have been dislocated by COVID-19 back to work, and 
what kind of additional Federal resources will be necessary to 
support these workforce training and reemployment activities.
    Thank you, Mr. Chairman, and thank you, Mr. Secretary.
    The Chairman. Senator Enzi?
    Secretary Scalia. I am sorry, Mr. Chairman--just to respond 
quickly. Again, we have a very extensive set of documents to 
explain to the American people how that program will work. I 
would certainly be happy to look at it again. And with respect 
to help to dislocated workers, in addition to all the things I 
mentioned earlier, we actually have made dislocated worker 
grants to 40 States in an amount of approximately $225 million.
    The Chairman. Senator Enzi?
    Senator Enzi. Thank you, Mr. Chairman. Thank you for doing 
this hearing. And I want to thank Secretary Scalia for being 
willing to answer questions.
    I appreciate all the comments that there have been about 
the $600 per week being temporary and all the discussion on 
that. Senator Grassley, you started off with three letters that 
you had received, and one was from an employee, and two were 
from employers. They were all about the employees.
    There are also some employers out there in small businesses 
who are making less than their former employees who are on 
unemployment. I am appreciative of the effort that Senator 
Portman is making to make some changes in that, and I 
appreciate all the answers that you have given on that. I will 
maybe submit a couple of questions, but I will change the 
subject to something we have not talked about yet.
    It is concerning to me that my State of Wyoming was the 
target for foreign fraud. How are you advising States to 
prevent fraud and abuse by foreign entities? Is there a 
department plan to recover any of the fraudulent payments? Does 
Congress need to help with these efforts?
    Secretary Scalia. Thank you, Senator Enzi. Fraud on the 
unemployment system has always been a problem. I am pleased to 
say that in 2019, for the first time since it has been 
monitored, we got our improper payments rate, it is called, 
below the 10-percent target. So we were on a good trajectory. 
But the coronavirus obviously has upended so many different 
things, and that included the risk of fraud in the system.
    There has been fraud. As you say, Senator, there have been 
highly sophisticated criminal enterprises that have engaged in 
fraud on the system. We are working with our Inspector General. 
We have been working with other Federal agencies. We have been 
working with the States.
    There is something called the UI Integrity Center that the 
States are working with. That center sponsors something called 
a ``data hub'' for State information-sharing. So there are many 
different mechanisms in place, and Congress did make $26 
million available to our Inspector General in the CARES Act to 
address this problem.
    We will continue to work on it hard. We know it is real. 
And in some cases it is interfering with the delivery of 
benefits to people who are entitled to them. So we will stay on 
it.
    Senator Enzi. Thank you. From the wide range of things that 
you have to cover, as was pointed out in this hearing, thanks 
for the great job you do.
    Thank you, Mr. Chairman.
    The Chairman. Senator Carper?
    Senator Carper. I would like to say, Mr. Secretary, 
welcome. I want to stay on the point Senator Enzi just raised.
    I spoke last week with our own Secretary of Labor at the 
Department of Labor in Delaware, and the issue of fraud came 
up. He mentioned foreign involvement, and he talked about a 
criminal element in Nigeria, I think is what he said. And the 
amount of money that may have been stolen, literally, by these 
folks--who apparently are pretty smart--is in the billions of 
dollars.
    And I would just ask as sort of a follow-up question with 
respect to what Mike Enzi was just raising, I think you have 
said this, but would you commit to provide GAO, and again the 
agency Inspector General and others, with the information they 
need to conduct effective oversight with respect to the UI 
benefit?
    Secretary Scalia. We will certainly cooperate with any 
investigations that are being conducted as to that. We are, as 
I said, working closely with our Inspector General. I actually 
sent a joint memo to all Labor Department employees, joint with 
the Inspector General, about a month or so, maybe 6 weeks ago, 
emphasizing the importance of the integrity of the Department 
generally, but the Inspector General and I also spoke 
particularly about the importance of integrity in guarding 
against fraud in connection with the CARES Act and unemployment 
insurance benefits.
    You are right. There is a Nigerian ring, evidently, among 
others. We received a letter from the Unemployment Insurance 
Commissioner in Washington State just the other day. They 
believe they have recovered hundreds of millions that had been 
misappropriated through this criminal enterprise. But there are 
still very significant challenges. I will work with GAO and the 
IG.
    Senator Carper. Yes, please do. I urge you to work with GAO 
as well. Thank you, very much.
    A quick question. The unemployment rate in our country is 
high, as you know; very high. The unemployment rate for folks 
who happen to be black or Hispanic is even higher. Any ideas on 
specific steps the administration is taking to address this 
particular issue, this particular challenge?
    Secretary Scalia. Well, as I mentioned earlier, until the 
coronavirus hit, we had hit all-time lows for unemployment for 
African Americans, for Hispanic Americans. There were also 
steps that the President took that were very important to him, 
including establishing Opportunity Zones in impoverished 
neighborhoods, the First Step Act, which was an important piece 
of criminal justice reform, but among other things made it 
easier for people who had been in the criminal justice system 
to come back into the workplace. Those will remain priorities.
    I know how proud the President was of the job opportunities 
that his economy was providing to minorities, and that will 
continue to be a----
    Senator Carper. Mr. Secretary, I am going to ask you----
    Secretary Scalia [continuing]. Very important goal----
    Senator Carper. Mr. Secretary, I am going to ask you to 
stop talking, all right? I have another question. Thank you.
    Secretary Scalia. Just answering your question.
    Senator Carper. You more than answered my question, thank 
you.
    The workforce retraining--this is a big issue. When I was 
former Governor, I did customer calls. I used to do them every 
week, customers large and small, and I asked them: ``How are 
you doing? How are we doing? What can we do to help?''
    And this was a time when we had maybe 150, 160 million 
people going to work on a given day. And we had 6 or 7 million 
jobs where nobody was showing up because the jobs that were 
needed, the kind of skills that were needed, were not inherent 
in the people who were looking for work.
    That situation has been exacerbated now, and I was going to 
ask you about this, but I have given a lot of thought to 
workforce training, retraining. It could be--oh, gosh, we have 
something in Delaware where we actually train kids right out of 
high school for jobs and careers that are going to be out 
there. We have labor unions work with apprenticeship programs. 
We work with technical communities in colleges. But there has 
got to be--and, you know, all these businesses that are gone, 
they are gone. They are not coming back. Folks who worked there 
do not have a job to come back to.
    They may have skills, but they do not have the skills that 
are needed for the jobs that are out there. And I think we need 
a thoughtful, comprehensive approach that involves not just the 
Federal Government, not just State Governments, but community 
colleges and other nonprofits, to actually focus on how we help 
these folks retool and retrain for the jobs that are going to 
be there in the months and years to come. Any thoughts there, 
please?
    Secretary Scalia. I agree with much, and maybe everything 
you said. I think that workforce training is important. We 
learned a great deal in the economy that we had. One of the 
things that I really appreciated in that economy was that 
businesses were reaching out more to train workers. 
Apprenticeships were thriving. Community colleges were playing 
a really important role.
    So we learned a lot that I think we can now apply going 
forward, because I do think that, although we will bring back 
to work millions upon millions of workers who were put out of 
work by the virus, there will be others who do not go back to 
those jobs. And I think we will want to apply some of the 
lessons learned, and you described some of them. We will want 
to apply some of those lessons learned going forward, and I 
would be happy to talk to you about it further.
    Senator Carper. That would be great. Thanks so much.
    The Chairman. Okay; Senator Portman?
    Senator Portman. Thank you, Mr. Chairman.
    And let me say, first of all, to my colleague and friend, 
Senator Carper, I could not agree with you more. We already 
have a need for worker retraining, because we did not have the 
kinds of skills we needed to fill the jobs in our economy. And 
now we are going to need them even more.
    So the JOBS Act is a good way to do that, to allow programs 
to be used for short-term training programs, and I think this 
is going to be very important, and you are going to play a 
leading role in that, I know, Secretary Scalia, because I know 
you have been involved in training.
    Let me just, if I could, talk for a second about how we got 
to where we are--at 10 weeks into this unemployment insurance 
program that was started in the CARES Act--and where we go from 
here. We chose 600 bucks for a simple reason, and Senator Wyden 
I think said it well when he said it was ``rough justice.''
    It was rough justice for trying to make sure that people, 
on average, had wage replacement. But I think, I think speaking 
for everybody, what we all were looking for was wage 
replacement. And $600 is well above wage replacement for a lot 
of people.
    The University of Chicago study that was cited earlier 
today shows that 60 to 70 percent of the people on unemployment 
insurance--making the $600 Federal addition to the State 
benefit--60 to 70 percent of them are making more on UI than 
they would make in their previous jobs.
    So there is this issue. And look, the last session I had 
with anybody in Ohio was on Monday before I flew here. It was a 
small business. And the first thing the guy said to me was what 
you hear from small businesses when you do your NFIB conference 
calls, which I do periodically, which is, ``I am now finally 
able to reopen, and we are starting to get business back. 
Things are going better, but I can't find people, and people 
are telling me they would rather stay on UI because they can 
make more money there.''
    And with 60 to 70 percent of the people making more money 
on UI than they make in their jobs, that is going to happen. I 
agree that people actually want to go back to work. I think it 
is wrong to say that people want to stay on UI. I think people 
like being at work. But when they can make a lot more money not 
being at work, it does create a disincentive.
    I had a town hall recently, a tele-town hall--I am doing 
these pretty much every week now--and a woman called in and 
said, ``I've got two daughters, one of whom is working and one 
who is on UI. And the one on UI is making more than the one who 
is working. And the one who is working is upset about that, 
because they had had jobs that were comparable prior to this.''
    So I mean, this is a reality. We have to face it. But it 
was with all good intentions, because we were trying to find 
the average wage--which was about $600 per month additional 
Federal benefit--to get the average wage so it would be 
comparable.
    And so I think it was rough justice, but I think now we are 
in a different situation. One, we have an economy that is 
starting to grow. And the numbers for last month were really 
surprising. We thought we would lose 7\1/2\ million jobs, and 
we added 2\1/2\ million jobs. I mean, no one can say that is 
not great news. However, there are still 21 million people who 
are on the unemployment rolls. It is over 13-percent 
unemployment. For African Americans, it is even higher, and 
Hispanics even higher. So we do have a huge problem here. The 
$600 was necessary, in my view, to get us started in this. But 
now we have a situation where the economy is starting to reopen 
and people are looking for workers.
    Second, remember that back then we really did not want 
people to stay at work because we were encouraging people to go 
home. In other words, we were shutting down the economy. Except 
for essential businesses, we were actually encouraging people 
not to go to work. And now we want to encourage people to work.
    This is why I have come to this proposal I have been 
working on for the past couple of months with you and other 
people, which is to say, for people who are on unemployment 
making whatever the State benefit is--usually about $360 on 
average from the State, plus they are making the $600 Federal 
addition to that--for those people who are on unemployment 
making more than they could make at work, which is 60 to 70 
percent of those people, why not give them a bonus to go back 
to work?
    That bonus could come out of the $600. That bonus--I 
suggest it could be $450. Why? Because that is the amount which 
would make people in this country--even if they were on minimum 
wage--so anybody on minimum wage would be able to go back and 
make just as much, if not more, in the private sector than they 
could make on UI if they had this bonus.
    For us, it would be a 6-week program. So it is a transition 
back to work. I really like it because I think it gets people 
back to work at a time when we need them in the economy, but 
also it is good for workers. Work is where most people get 
their health care, right, Mr. Secretary? Most people in America 
get their health care from work, and they lose it when they 
lose their good job, unless you have a great company that is 
furloughing them and keeping their same health care. But that 
is rare.
    Second, that is where they get their retirement, if they 
have a retirement account. Typically it is a 401(k) at work. 
But also I think the meaning of work is important to people. I 
think the self-respect you get from going to work is important 
to people.
    So we want to encourage people to go back to work. It is 
clearly good for small businesses who are looking hard for 
workers right now as they are starting to reopen, and that is 
good. And of course it is good for the taxpayer because, think 
about it, instead of 600 bucks it is $450, and the Federal 
Government saves money, but so does the State government, 
because then the people are off unemployment insurance and back 
on the payrolls--and they are actually paying taxes, by the 
way. We have been talking about the fact that they are now 
paying taxes and contributing to the economy. That alone, 
taking them off the Federal $600 down to $450, whatever the 
number is--Congress may choose another number--and not having 
the 360 bucks on average State benefit, it is tens of billions 
of dollars in savings to the State Governments and the Federal 
Government, which is savings to the taxpayer. That is a win/
win/win: good for workers, good for businesses, good for the 
taxpayer.
    Now having said all that, what do you think about it, Mr. 
Secretary? Don't you think that makes sense in order to get 
people to work?
    Secretary Scalia. I do think it makes sense to get people 
back to work. We have to have an unemployment insurance safety 
net, but for the reasons you gave, work is even better. And so 
I look forward to, Senator Portman, speaking with you and 
others about what we might do going forward. I am certainly not 
here to criticize the CARES Act. I think the CARES Act is a 
really admirable achievement by the U.S. Government during an 
extremely difficult time. But if it was rough justice, let us 
find justice. Let us use these weeks to make things even 
better. And I think we are in a different situation.
    Senator Portman. Let us go over that a little bit. I would 
love to find justice--in other words, to be able to say, what 
is wage replacement?
    The Chairman. Senator Whitehouse?
    Senator Portman. But I do not believe that the UI systems 
around the country--we will find out from the second panel when 
they come up to talk--are capable of doing that. They are going 
to want one flat number. They have had enough difficulty doing 
that. Unfortunately, I think that is where we are.
    So let us do something that makes sense to deal with the 
immediate problem we have to get people back to work and 
provide an incentive to do so. Thank you, Mr. Chairman.
    The Chairman. Senator Whitehouse?
    Senator Whitehouse. Mr. Secretary, does the Department of 
Labor have a specific counterproposal--Senator Portman's or any 
other--to ending, to extending the $600 benefit past July?
    Secretary Scalia. Senator Whitehouse, I do not have a 
particular proposal that I would want to air at this hearing.
    Senator Whitehouse. Okay, I----
    Secretary Scalia. I certainly am interested in discussing 
what steps might be taken. I have already----
    Senator Whitehouse. You answered my question.
    Secretary Scalia. I think it would help you to know that--
--
    Senator Whitehouse. Please, Mr. Secretary; you have tried 
to talk over us through this whole hearing. That was a simple 
question. Just let me go through my questions, would you, 
please?
    The second question is with respect to the fraud 
investigations on unemployment insurance. We are seeing in 
Rhode Island, and other States, a fraud that looks like it is 
massive, coordinated, and perhaps driven from overseas. How 
much of a priority is investigating and remedying that fraud 
for your Department? High? Low? Super-high? Give me a measure.
    Secretary Scalia. To complete my answer, because I am sorry 
I had not completed my answer to your question, I had had a 
conversation with Ranking Member Wyden about this, what we 
might do going forward, and I look forward to further----
    Senator Whitehouse. Mr. Chairman?
    Secretary Scalia [continuing]. Discussions along those 
lines.
    Senator Whitehouse, with respect to fraud on the 
unemployment insurance system, it is a very high priority for 
us. We recognize that unemployment insurance fraud has always 
been a longstanding problem in the system. We recognize that 
because of the size, the prominence of the CARES program, it 
has become an acute problem. So it is one that I am certainly 
personally spending my time working with my staff to address, 
and I know you have more questions, so I will not repeat the 
things I said earlier, but we are working with our State and 
Federal partners----
    Senator Whitehouse. I am starting to see that you are 
having fun here, and it has become a bit of a sport for you to 
filibuster us and to kind of yuck it up. I do not think that is 
fair to us.
    With respect to the OSHA guidelines related to COVID, what 
is the difference between an OSHA guideline and an OSHA 
Emergency Temporary Standard with respect to enforceability?
    Secretary Scalia. A ``standard'' is a legally enforceable 
rule, which we already have a number of that we believe we can 
use for enforcement with respect to COVID. We also have----
    Senator Whitehouse. But to be clear, the COVID-related 
guidelines that you spoke about earlier are not standards that 
OSHA is capable of enforcing against. It is only if they 
overlap with another pre-existing actual standard that you can 
enforce against. Is that not a correct statement of the law?
    Secretary Scalia. That is, respectfully, not entirely true, 
actually. Guidelines that we issue, which are consistent with 
those issued by the CDC and those adopted by industries, 
recommended by unions and the like, establish a legal 
background in which I believe we can bring a general duty 
clause action if we need to.
    The other difference in the guidelines and the standards--
--
    Senator Whitehouse. May I read you something from your 
website? ``OSHA guidelines are advisory, do not create new 
employer obligations, and are not the basis for citations.'' 
And then further down, it actually says, ``The recommendations 
contained as guidelines are not enforceable under the general 
duty standards either.''
    So it looks to me like it is hard to enforce unless you 
make them emergency temporary standards, so I am here to ask 
you to make them emergency temporary standards.
    Secretary Scalia. Respectfully, I was the chief legal 
officer in the Department previously, and as I said, guidelines 
can provide part of the background for an action. The 
difference between a guideline----
    Senator Whitehouse. ``Background'' and ``enforceability'' 
are two different things, are they not?
    Secretary Scalia [continuing]. And a standard is the 
flexibility a guideline gives us----
    Senator Whitehouse. Final point. There has been a lot of, I 
think scorn heaped on the $600 a week benefit--which propped up 
probably close to 40 million families now through this crisis--
and the people are ``overpaid'' and ``idle'' and all of that.
    But just for context in evaluating that narrative, I would 
also remind everybody who is watching this hearing that 43,000 
Americans who enjoy incomes over $1 million got a benefit from 
the CARES legislation amounting on average to over $1.6 million 
each--not for their businesses, but flowing back to their 
personal tax returns. The amount that flowed back to 
individuals earning over a million dollars each to their 
personal tax returns as a result of this, $1.6 million on 
average for those 43,000 people, was over $100 billion.
    So let us just bear that in mind as we evaluate what it 
means to a family struggling to get by, to have an extra $600.
    I think we probably do need to rethink this program, but it 
would help if we had a proposal from the Department of Labor.
    Thank you. My time is up.
    The Chairman. Senator Cantwell?
    Senator Cantwell. Thank you, Mr. Chairman.
    Mr. Secretary, I represent a very big aerospace cluster. 
About 150,000 people are involved in aerospace, both working 
for Boeing as a manufacturer, but also the supply chain. So we 
worked very hard on getting the CARES Act to support activity 
that would get the capital into those areas, and also to try to 
focus on what we could do to protect essential workers.
    I am sending you a letter today asking for Trade Adjustment 
Assistance for workers who are impacted at Boeing, and so I 
hope that you will look favorably on that petition. I do not 
know if you want to make any comments about that, but one of 
the issues that I think we really have to think hard about is 
that we want to maintain our competitiveness in aerospace.
    These are highly paid jobs, and when people get laid off--
because obviously we have been impacted by this crisis, and the 
whole transportation sector has been impacted--then those 
people who get laid off may have a package that keeps them 
connected to the company for a while. I was a big advocate of 
saying that critical defense workers should have extra health-
care benefit activity so that when this crisis is over they 
would be more likely to come back into the fold and that we 
would not lose these critical defense workers.
    As it is, we ran into a big roadblock. So much of the 
discussion this afternoon has been around the $600 and 
extending that. My question is really more on health care. What 
are we going to do to keep critical workers in the sector that 
we would like to keep them in after their 1 month of paid-for 
COBRA benefits runs out? And we are now talking about aerospace 
engineers, that they are then on the hook for paying for their 
health care themselves. They can continue that COBRA benefit, 
but they pay for it themselves, which again is a big out-of-
pocket expense. So my worry is what is going to happen to those 
aerospace workers is, they are going to find another job that 
has health care, because they are not going to wait a year from 
now for the aerospace market to pick back up.
    So what do we need to do? If you want to, comment on the 
TAA, or the benefits of trying to provide assistance to 
aerospace manufacturing from trade adjustment, but also, what 
is your plan? What do you think the plan should be for keeping 
critical workers connected by having some sort of health-care 
benefit that is out there and available in an affordable way?
    Secretary Scalia. I will certainly look carefully at the 
TAA letter. I recognize that the Trade Adjustment Assistance 
Act is an important form of relief to industries and companies 
that have been affected, and we will certainly take a look at 
that.
    Senator Cantwell. And I am saying they were affected before 
this, basically. And the whole sector was affected because of 
trade issues.
    Secretary Scalia. Yes. And by the way, I certainly share 
your view that it is a very important sector for this country, 
for a number of different reasons.
    With respect to health care, providing it is always 
important and often a challenge. We extended the time that 
people would have to elect COBRA benefits during the pandemic. 
So people had more time to evaluate that option and, in the 
rush for everything else going on, did not lose out on those 
benefits as a result of the sort of ordinary deadlines that 
apply.
    I will have to give further thought to mechanisms that 
might be used to induce people back to aerospace jobs, perhaps 
a health-care benefit, rather than having them go elsewhere 
that might be of less importance to national security and the 
like. It is not an issue that I have looked at, but I would 
certainly be interested in talking to you about that aspect of 
this problem.
    Senator Cantwell. Well, it is one of the highest-paid 
manufacturing jobs that we still have in the United States, and 
I think the second hundred years of aerospace could be a very 
big opportunity as the rest of the world continues to grow 
economically in the future and gets into aerospace.
    So I would hope that we would figure out how to upskill 
these workers, and also figure out this health-care benefit. 
Because if they do not have health care, they are not going to 
stick around waiting for us, even if they are on TAA. We have 
to figure out how to get the health-care benefit to these 
workers and get them back into aerospace and maintain U.S. 
competitiveness.
    Thank you, Mr. Chairman.
    The Chairman. Senator Young?
    Senator Young. Thank you, Mr. Chairman. Welcome, Mr. 
Secretary; good to be with you. I appreciate you visiting 
today.
    Most States, including Indiana, waived job search 
requirements as it relates to unemployment insurance in order 
to encourage people to shelter in place, to stay at home, to 
prevent further spread of the coronavirus. But now, as all of 
our States begin, in varying degrees, to reopen, employers are 
recalling their workers or hiring new workers to get their 
businesses up and running and to try to resume some semblance 
of normalcy.
    But they are having difficulty doing so because of the 
additional UI plus-up, which I know has been discussed at some 
length today. So what I am wondering, Mr. Secretary, is at what 
point States will feel it is reasonable for workers to be 
expected to search for work as a condition of receiving further 
unemployment insurance.
    Is this something your Department has given some 
consideration to?
    Secretary Scalia. Senator, thank you. And the work search 
requirements are ones that are part of the unemployment law 
infrastructure that the CARES Act was enacted on top of. And 
although there were States that, for example, sought to waive 
the weekly certification requirement, we have asked that that 
requirement continue to be honored. I certainly agree that, 
especially as the economy is now reopening, as jobs are 
becoming available, it is important that States begin applying 
the usual mechanisms to encourage workers to look for work.
    We appreciate that it is a difficult balance for them. We 
still want them also to be able to get payments out to people 
who need them and are entitled to them. But we know now that 
millions of jobs are reopening, and we want to get people back 
there.
    Senator Young. Can you give me some sense of how States are 
approaching this? What timeline might they be looking at as it 
relates to resuming the normal work search requirements, and 
what expectations are being made of workers as they engage in 
this work search in a somewhat different environment?
    Secretary Scalia. We expect them now to be applying the 
weekly certification requirement they have. We appreciate that 
a few weeks ago some wanted out of that for a period of time, 
but we have asked them to comply with that requirement. And I 
think, again, now it is taking on more value, more importance. 
Something that I suggested to the Governors--I sent a letter to 
the Governors within the last week talking to them really about 
these kinds of questions, that there is still work to be done 
providing benefits for the economy's reopening. So there is now 
this new job of, for example, having employers let employment 
commissioners know when they are open for business or having 
the State workforce agencies informed when employers are open 
for business, and working with the people on unemployment to 
get them back to work.
    We have these workforce agencies in the States to help 
people make that transition. And I think now increasingly their 
services are being called on, and we want them to do that job 
too.
    Senator Young. Excellent. Thank you.
    So many Hoosiers have lost their jobs over the course of 
the coronavirus, and many will not have a job to go back to. 
For others, they will not have a job to go back to for some 
period of time. And still others may find that they have 
created a new job for themselves, or they can find a new job 
that did not exist prior to the pandemic. You may have spoken 
to this earlier. I know it has been a long day for you, and I 
am appreciative of your presence here for such a period of 
time. But do we know what jobs will not be coming back post-
pandemic and what jobs have been created as a result of the 
pandemic?
    Secretary Scalia. That is a good question. This has been 
such a challenging stretch for American workers that I hesitate 
to point out the positives that have been there, but there have 
been some. I mean, we have seen some companies hire in some 
cases hundreds of thousands of workers. Particularly some of 
the larger retailers have done that. And I think we can imagine 
some areas that will see a further growth as a result of some 
of the changes in lifestyle that people are now making as a 
result of the virus.
    There are other industries that are going to take longer, 
and we know that. I have met with workers in the hotel sector, 
and business owners in the hotel sector, and that is going to 
take longer.
    Likewise, we know the sports industry will take longer. But 
I think we can bring them back.
    The Chairman. We have two questioners left. Before I call 
on Senator Cortez Masto and Mr. Daines--we are not going to 
have a second round, but I am going to, as a matter of 
privilege, give Senator Wyden 2 minutes, and if he wants a 
response from you, I hope you can respond in 2 minutes, because 
we are holding up the second panel.
    So, Senator Cortez Masto, by TV, I think.
    Senator Cortez Masto. I am here. Thank you.
    Secretary Scalia, thank you. It has been a long afternoon, 
and I appreciate you coming and answering all the questions.
    Let me say, you were just touching on an industry that was 
hit hard. I am from Nevada, the hospitality and tourism and 
gaming destination. Unfortunately, we have the highest 
unemployment rate in the country. And unfortunately, what we 
have seen in our unemployment insurance, our Department of 
Employment, Training, and Rehabilitation is about to receive 
more than 500,000 claims for standard unemployment insurance 
and nearly 100,000 for pandemic unemployment insurance. And 
that is with a population of just about 3 million people.
    So can you talk a little bit about how you anticipate 
addressing unemployment for the hospitality and tourist-based 
industry? I am on Banking, and the chairman and I had this 
conversation. I asked which industry was going to take the 
longest to bounce back, and he referred to the hospitality 
industry.
    So what are you thinking, for purposes of unemployment and 
how it should be addressing the long-term unemployment that we 
may see in the hospitality and tourist-based industries?
    Secretary Scalia. Thanks for the question. I spoke with 
Governor Sisolak, I think just last week, about Nevada's 
reopening. I know that Las Vegas is now beginning to reopen, 
which is wonderful news, but I know that it will be a process 
that takes place over a period of time. And as I mentioned a 
moment ago, I do appreciate that it is a sector of the economy 
that is going to be slower coming back, unfortunately, than 
others.
    I think that we are seeing the rest of the country reopen 
safely. I just read that Disney, I think, is going to begin 
opening its facilities, I believe later in the month. So I am 
hopeful that some of these business places that depend more for 
business on large gatherings are not far behind, and the 
reopening in Las Vegas, NV can also proceed more quickly.
    But with that said, I appreciate that we do need to 
continue to watch how these things develop over the next month 
or so, the next few weeks, and evaluate whether there are 
additional steps that have to be taken post-July 30th. And the 
circumstance that you have in Nevada, I do believe is one that 
is going to warrant watching and perhaps further discussion 
about how things are progressing and what steps might be needed 
for the benefit of the workers and businesses there.
    Senator Cortez Masto. Such as extending unemployment 
insurance for those workers?
    Secretary Scalia. I think that it makes sense to talk about 
the situation that workers are in come the end of July, and 
what particular mechanisms--an unemployment piece could be one 
part of that that I agree is worth discussing, particularly if 
you are able to target it in certain ways.
    Senator Cortez Masto. Yes, and please know that part of our 
industry too is that gig economy industry that includes our 
entertainers, that includes those who are in seasonal stage 
group promotions, and so for purposes of that industry, which 
is really the new economy, I am curious what you are thinking 
for purposes of the future--and even now, on how we address our 
unemployment needs.
    I understand Senator Warner said this is an area we should 
be focused on. What are you doing to address this issue, 
because so much of that is a new economy, and we should be 
looking at how to provide unemployment. Many are misclassified, 
as you well know, and so what are you looking at to address 
this new economy and these workers?
    Secretary Scalia. Senator, the audio cut out just a little 
bit, but I think you were asking about workers who are often 
treated as independent contractors, or called gig workers, 
self-employed. And as I mentioned earlier, providing 
unemployment benefits to them, a form of unemployment benefit, 
in the CARES Act was an important thing to be done, given how 
they were affected in much the same way as many other workers.
    I think there are other things that can be done to help 
people in that segment of the economy. Something that we 
proposed--we adopted a rule for what we called ``association 
health plans'' to make it easier for the self-employed, as well 
as for people who work for small businesses, to band together 
to buy health insurance.
    Senator Warner earlier mentioned some ideas that he has for 
gig workers. I think that is a segment of the economy that is 
really important. I think there are many workers out there who 
like the independence that comes with having a job of that 
nature, but it does make sense to talk about ways to adapt some 
of what we do for workers in light of the particular line of 
work that those people are in.
    Senator Cortez Masto. Thank you. I know my time is up. 
Thank you, Mr. Chairman.
    The Chairman. Thank you. And now, the Senator from Oregon 
for 2 minutes.
    Senator Wyden. Yes; thank you, Mr. Chairman. I just want to 
correct the record on some of the key issues.
    First, when I talked to the Secretary last week on one of 
the key questions of why we had to have the $600 a week 
supercharged benefit, the Secretary said that the States still 
did not have the ability to do full wage replacement, which I 
would have been happy to do in the first instance. Today he 
said it seems like they made a lot of progress. And I do not 
know what might have happened over the weekend, Mr. Secretary, 
but I think that is misleading the committee, misleading the 
public, and on a key kind of question which is, what to do 
going forward.
    Because I had indicated--and I mentioned some of my 
colleagues being open to this--that I am open to a variety of 
approaches. But it does not help when we have misleading 
comments. And that was the case in several other areas. Both 
myself and Senator Casey asked about this question of whether 
an unemployed person could turn down an unsafe job and continue 
to claim unemployment insurance. He said repeatedly it was a 
matter of State law.
    We have been looking at it. It is not. When it is pandemic 
coverage, then you have the capacity, as the Secretary of 
Labor, to give the States guidance, which is what we have been 
asking you about for the last 3 hours.
    And finally, I was just stunned by this. You said that, 
well, isn't it great that we have all been able to agree on the 
pandemic coverage, which we called the gig workers and the 
self-employed, and the like. And I just went back and looked at 
the record, and the fact is that the McConnell bill was eight 
lines long and it had nothing to do with those workers. And it 
happened because people on this side of the aisle said the 
program began in the 1930s and it was time to modernize it and 
bring it into the next century.
    We would like to work with you, but it does not help when 
on key issue after issue--and I understand being lawyerly. I am 
a lawyer in name only. I ran the legal aid office for the 
elderly. But that is different than being misleading. And I 
think on too many key issues today you were simply misleading, 
and I think it is going to make our job harder, because we want 
to do a bipartisan bill, which is actually what we came out of 
the committee room with the first time before we got to the 
floor.
    Thank you, Mr. Chairman.
    The Chairman. If you want to answer, please do it in 2 
minutes.
    Secretary Scalia. Thank you. Ranking Member Wyden, I hope 
we can continue talking about different mechanisms that might 
be available there.
    The approach that I think I suggested to you when we spoke 
last week was one which resembled in some ways what we 
discussed in March, which was potentially involving the 
Treasury Department in helping disburse benefits for unemployed 
workers. That actually is an approach that would have included 
the States, since they have critical information.
    With that said, I actually have learned more since you and 
I spoke. We have had discussions with States. We have learned 
more, and I confess I am, as I sit here now, more optimistic 
about the capabilities that the States may have based on the 
conversations that we have continued to have. And so I look 
forward to exploring that further with you. But the more recent 
information that I have gotten has been encouraging.
    And then with respect to safe workplaces, I am sorry that 
you do not feel that it is as clear as you would like, but as I 
said, we want safe workplaces. We do not expect people to be 
forced back to workplaces that are unsafe.
    The unemployment standards are, as you know, State-
administered. We have provided guidance, I think including 
guidance regarding at least some circumstances where we would 
expect workers can safely return. But if we hear from States 
that that is an area where they need further guidance, we will 
certainly have those discussions with them. Thank you.
    The Chairman. Mr. Secretary, you have had a long afternoon 
here, and you have been at a well-attended committee meeting. 
All but three members came to have dialogue with you. I thank 
you for your patience, and I also appreciate the cooperation of 
our members through all of this.
    So I will excuse you now, and then, while our staff is 
putting up the nameplates, I will start to introduce first 
Scott Sanders. Mr. Sanders is the executive director of the 
National Association of State Workforce Agencies. That is an 
organization of State workforce system administrators. It goes 
by the acronym NASWA. Prior to joining that organization, he 
served as Commissioner of the Indiana Department of Workforce 
Development.
    Next we will hear from an Iowan, Beth Townsend. Ms. 
Townsend is Director of Iowa Workforce Development, appointed 
by Governor Branstad, confirmed unanimously by the Iowa Senate, 
March 24, 2015. Previous to her present position, she was 
Director of the Iowa Civil Rights Commission. Prior to that, 
she worked as an attorney in West Des Moines, IA in civil 
rights and employment law. Ms. Townsend also served as a member 
of the Judge Advocate General's Corps of the U.S. Air Force. 
She retired from the Air Force Reserves after 21 years of both 
active and Reserve duty.
    Third is Jose Javier Rodriguez. Mr. Rodriguez is a member 
of the Florida Senate, representing the 37th District, 
including Coral Gables, Pine Crest, Key Biscayne, and downtown 
Miami. And he has been in the Senate since 2016. He previously 
served 2 terms in the Florida House of Representatives.
    Next, Les Neilly is president of the Neilly Canvas Goods 
Company in Pittsburgh, PA. Mr. Neilly runs a family-owned 
business operating since 1940, which provides residential 
awnings and tarps for commercial trucking and other uses. He 
has been able to bring all of his employees back to work, which 
he will tell us about.
    Then we will hear from Michele Evermore. Ms. Evermore is a 
senior policy analyst for the National Employment Law Project. 
Ms. Evermore joined that organization in 2018. Prior to that, 
she worked in Congress for a decade in the Senate, and also was 
a staff person for the House Committee on Education and the 
Workforce. In those roles, Ms. Evermore worked to advance 
worker protections and organizing rights, and to improve 
retirement security and a variety of private pension plan 
designs, as well as Social Security.
    I am sure the staff has informed everybody that if you have 
longer than 5-minute statements that you want put in the 
record, they will be put in the record.
    And I will start with Mr. Sanders, then Ms. Townsend--well, 
the way I introduced you. So let us go with Mr. Sanders.

  STATEMENT OF SCOTT B. SANDERS, EXECUTIVE DIRECTOR, NATIONAL 
    ASSOCIATION OF STATE WORKFORCE AGENCIES, WASHINGTON, DC

    Mr. Sanders. Chairman Grassley, Ranking Member Wyden, and 
members of the committee, on behalf of the National Association 
of State Workforce Agencies, thank you for the opportunity to 
testify and discuss States' efforts to provide essential 
unemployment insurance benefits to workers who have lost their 
job due to the pandemic. Members of our association are State 
leaders of the publicly funded workforce system, including the 
unemployment insurance program. NASWA serves as an advocate for 
State workforce programs and policies, liaison to Federal 
workforce system partners, and a forum for the exchange of 
information and practices. We are nonpartisan, and our 
membership includes all 50 States, the District of Columbia, 
Guam, Puerto Rico, and the Virgin Islands.
    The impact of the pandemic on the workforce is 
unprecedented in my lifetime. During the Great Recession, the 
peak of the number of claimants paid in January 2010 was 12.1 
million. For comparison, a year ago for the week ending May 11, 
2019, States only paid 1.6 million claimants. In sharp 
contrast, for the week ending May 16, 2020, States paid a total 
of 30 million claimants, which includes 10.7 million claimants 
in the new Pandemic Unemployment Assistance program. These 
phenomenal increases in claims explain some of the 
extraordinary implementation challenges States have faced in 
processing and paying UI claims. No entity, public or private, 
would reasonably have contingency plans in place for these 
scenarios. Yet our member agencies continue to work through 
these overwhelming workloads tirelessly and with great 
dedication.
    It has not only been the scope of the challenge, but 
simultaneously implementing with our members several new 
Federal programs we are charged to address, including the 
Federal Pandemic Unemployment Compensation, which provides an 
additional $600 to each UI claimant. This program was 
implemented in all States by the end of April. The Pandemic 
Unemployment Assistance program is much more challenging 
because it requires UI payments to self-employed individuals on 
a State-wide basis, something that has never been done before. 
All States implemented this program by the end of May.
    Against this backdrop, I will highlight three of the key 
challenges that States are experiencing during this crisis: 
promoting integrity, trust fund solvency, and administrative UI 
funding. Our members work hard to promote integrity in the 
unemployment insurance program. Through NASWA's UI Integrity 
Center, States share best practices. They receive assistance in 
reducing improper payments, and recently States are accessing 
the Integrity Data Hub. The Integrity Data Hub plays an 
integral role by creating a suspicious act repository with 
questionable email domains and IP addresses, multi-State cross-
matching, and fraud-alerting. States are acting quickly to 
utilize this tool. These cross-collaborative State efforts will 
continue to enhance NASWA's and its members' ability to promote 
nationwide efforts around the integrity of UI claims.
    Trust fund solvency is the second major challenge for 
States. During the Great Recession, 36 States depleted their 
trust funds, resulting in cumulative borrowing of $51 million 
from Federal general revenues. Trust fund balances are rapidly 
depleting. States' trust fund balances totaled $76 billion at 
the end of 2019 and have dropped to $52 billion as of the end 
of May. Since March, 29 States have seen their trust fund 
balances decline by more than 25 percent. Adding to this 
concern, States have already collected approximately 65 percent 
of their tax revenue for 2020. For the remainder of the year, 
benefits paid will far exceed deposits, exacerbating the 
declining trust fund balances. With these lower trust fund 
balances, the States can expect significant increases in the UI 
tax rates in many States.
    There are two potential options for Congress to consider in 
averting this impending trust fund crisis. Congress could enact 
legislation to forgive trust fund loans made to States this 
year or next, or Congress could direct a Federal payment to 
State trust funds that could be sent by a Reed Act 
distribution, which was done after 9/11.
    Finally, States need additional UI administrative funding 
for operations and IT systems. States have mobillized new call 
centers; hired, borrowed, and outsourced staff; and purchased 
or modified existing IT systems to address the pandemic. 
However, the cumulative years of underfunding have affected 
States' abilities to maintain staff and make capital 
investments, specifically in IT resources.
    We urge Congress to address the immediate needs to provide 
funding for State administration and IT operations and update 
the basic methodology of the administrative funding process.
    In closing, NASWA and our members look forward to 
continuing to work with you on these important issues. Thank 
you for providing this opportunity to testify.
    [The prepared statement of Mr. Sanders appears in the 
appendix.]
    The Chairman. Thank you, Mr. Sanders. Now, Beth Townsend of 
Iowa.

             STATEMENT OF BETH TOWNSEND, DIRECTOR,
           IOWA WORKFORCE DEVELOPMENT, DES MOINES, IA

    Ms. Townsend. Thank you, Chairman Grassley, Ranking Member 
Wyden, and members of the committee, for the opportunity to 
share with you a boots-on-the-ground view of the impact of the 
COVID-19 pandemic on a State workforce agency. I have included 
written information regarding the facts and figures behind 
IWD's response to the pandemic, and I refer you there for 
specific information.
    A few key points I would like to highlight include that 
Iowa has a generous unemployment benefit program. We provide 26 
weeks of benefits per year, with a range of payments from $87 
to $591 per week, depending on the claimant's wages and number 
of dependents. And we do not have a waiting week. The average 
weekly benefit during the pandemic is approximately $300 per 
week. Iowa began reopening at the beginning of May. In order to 
keep employees safe in the workplace, employers are taking 
necessary steps to protect their employees and customers. Iowa 
State law provides that employees who believe their workplace 
to be unsafe can quit their job and still be eligible for 
unemployment benefits.
    Additionally, PUA provides benefits for those who are in or 
caring for individuals in high-risk categories, or who have 
lost child care or transportation. We have strongly encouraged 
open communication as a first step in helping employers and 
employees to determine who, how, and when employees can be 
returned to work safely.
    In addition to providing for the safety of employees in the 
workplace, employers are dealing with the collateral 
consequences of the FPUC payment. A review of our claims shows 
that when our State benefits are combined with the FPUC benefit 
of $600 per week, 79 percent of Iowans who have received 
unemployment benefits since March 15th have earned more on 
unemployment than our average weekly wage. This is not an issue 
of low wages in Iowa; it is the impact of the additional money. 
Iowans who received the maximum State benefit and FPUC are 
earning the equivalent of $30 an hour on unemployment. Even the 
average weekly benefit of $300 plus FPUC results in the 
equivalent of $22.50 an hour.
    This has resulted in very awkward conversations between 
employers and employees. We have heard that they are being 
asked not to recall their employees until the end of July. 
Employees are asking to be laid off in order to collect the 
benefits. Employers who have been able to remain partially open 
have received complaints from employees who continue to work 
because they see it as unfair that they are working and their 
peers are not, and they are staying home and earning more in UI 
benefits. Employers who took advantage of the Paycheck 
Protection Program often received complaints from employees who 
do not want to be recalled because they were making more on 
unemployment.
    While employers understood and agreed with the reason for a 
flat rate for the entire country at the time the CARES Act was 
passed, I urge you to take the time now to consider the impact 
of such payments and find a path that provides a safety net in 
States where the recovery is slower but is not a drag on States 
that are recovering faster. Employers are telling us in Iowa 
that the FPUC benefits should be allowed to expire to make sure 
they are able to quickly recall and restart operations. If FPUC 
benefits are extended, I urge you to craft legislation that is 
not one-size-fits-all. Six hundred dollars a week invested in 
Iowa goes much further than it does in States where the cost of 
living is significantly higher.
    Please consider tying the availability of benefits to the 
State's unemployment rate so that once the State falls below 
the rate, the benefits end. Or consider a significantly reduced 
flat rate for a short period of time. Please limit the 
calculations a State workforce agency must perform to pay our 
Federal benefits. A flat rate for all those eligible for a 
single program is absolutely essential to being able to 
implement the program quickly and efficiently. Regardless of 
the age of the UI system a State uses, these are all new 
programs that have to be developed and tested before claims can 
be paid. Thus, trying to implement a percentage of wages, or 
maximum wages as a percentage of benefits received, would 
require individual review of each claim.
    I would ask you to consider a benefit like a payroll tax 
holiday, which would be easier to implement; would benefit 
everyone in the workforce, including those who remained in the 
workforce throughout; and would not run through the workforce 
system. It would also provide an incentive to those returning 
to the workforce by lessening the impact of going off FPUC 
payments by allowing employees to keep more of their wages. If 
a new unemployment benefits program is created, please consider 
a prospective date of implementation. This would give USDOL 
time to provide the necessary guidance to State workforce 
agencies, and time to develop a program before it is deployed, 
as well as manage the expectations of people receiving the 
payments.
    In closing, I recognize Iowa is a smaller State and does 
not have as many challenges as other States in assisting those 
who have lost their jobs due to the pandemic. However, I also 
think Iowa is unique in that we are a State that knows the 
value and necessity of collaboration. And we are stronger 
together. From the beginning, we have benefited from Governor 
Reynolds's strong, steady leadership. I also want to thank the 
team members at IWD who have worked so hard and have been so 
dedicated and professional, and who have remained committed to 
helping the citizens of Iowa.
    Thank you, Senator Grassley and members of the committee, 
for the opportunity to share this information with you. I look 
forward to answering any questions you may have.
    [The prepared statement of Ms. Townsend appears in the 
appendix.]
    The Chairman. Thank you, Beth. Now, Senator Rodriguez.

  STATEMENT OF JOSE JAVIER RODRIGUEZ, STATE SENATOR, FLORIDA 
                       SENATE, MIAMI, FL

    Mr. Rodriguez. Chairman Grassley, Ranking Member Wyden, 
honorable committee members, I address you as a State 
legislator serving the Florida Senate. My name is Jose Javier 
Rodriguez. In these unprecedented times, with the CARES Act, 
you have done a great deal of good. And for that, I thank you 
on behalf of the constituents I serve back home.
    Florida entered this crisis with one of, if not the least 
prepared unemployment systems. No State provides a fewer number 
of weeks. We are near the bottom in weekly benefits, capped at 
$275, and have major gaps in eligibility. Add to that an 
application and payment system infamous for its failures--and 
how persistent those failures are, having endured unchanged 
through several gubernatorial terms, successive audits, and 
prior Federal intervention.
    The CARES Act lifted my constituents when Florida's system 
alone would not have. The PUC program adds $600 a week through 
July. By design it goes right to out-of-work Americans who 
spend it in their communities on necessities. It is easy to 
administer. And that is a significant benefit in States like 
Florida with so many problems getting benefits paid.
    Ricardo, 56, a hotel bellman for 8\1/2\ years before his 
layoff, is a diabetic who loses health insurance this month. He 
wants to get back to work in an industry that has not returned, 
and wanted me to tell you, quote, ``The $600 is necessary for 
me to survive, including to pay for medications. I have paid my 
taxes since I was 14, been working for decades, and never 
collected unemployment. This is not a luxury; it is a 
necessity.''
    Karen, 30, worked in marketing at a casino for 9 years and 
hopes to return, but looks for work in the meantime. She wanted 
me to tell you, quote, ``My fear is that me and my 9-year-old 
daughter will end up homeless without this. I waited for over a 
month to receive Florida's unemployment, and honestly, $275 a 
week is just not enough. The Federal aid is important to help 
us for all we do as taxpayers.''
    Randi, 47, is the mother of an 8-year-old boy and a 5-year-
old girl. A recruiter who owned her own business and needs the 
economy to recover for work, she was able to file in late March 
but only just received her first payment last week. She wanted 
me to tell you, quote, ``The $600 has become vital to my family 
for basic needs like food and utilities, and finally being able 
to buy my daughter a toy. It seems simple, but we have been in 
quarantine since March, and I have not been able to buy my 
children anything.''
    With the CARES Act, you also shored up a highly successful 
lay-off aversion program. Businesses want to do the right thing 
and often need help, like Bernie, a small business owner that 
we assisted. He employed 17 people before the crisis and should 
avoid layoffs under that program.
    On top of design flaws coming into the crisis, Florida's 
system continues to be slow, unreliable, and inept in general--
and in its deployment of the CARES Act in particular. The 
Department of Economic Opportunity administers unemployment. 
For hundreds of thousands of Floridians, DEO's system was 
inaccessible for at least the first half of the crisis, 
punctuated by unmet, ever-changing goals and seemingly never-
ending mishaps so bad that Florida was the only State paying 
out less than it received during this period.
    Leah, 63, worked part-time for an airline. A recent 
survivor of lung cancer who could not perform her job remotely, 
she could not apply because the system crashed daily for weeks. 
Were it not for assistance from our office to adjust the date 
of her claim, she would have lost over a month of benefits.
    The ordeal is like the ancient military punishment of 
running the gauntlet. Many, many thousands still have not made 
it through. No response. No reasons. No assistance from DEO. 
The failures work a special hardship on people, adding needless 
anxiety to economic pain. A bipartisan group of us field a bulk 
of the calls. Each has a list of critical cases to informally 
bump up when we hear things like, quote, ``I'm struggling to 
maintain a positive attitude, and my wife is afraid that this 
could be the death of me. Please help. I'm desperate.''
    Florida remains an outlier in deploying the CARES Act. Of 
those deemed ineligible for traditional unemployment, only 
about one-fourth end up qualifying for the catch-all PUA 
program, a rate far below other States. It also appears that 
the State of Florida has only paid out about half of the $600 
weekly benefits available to Floridians. This experience should 
serve as a lesson to other States. States that shrink, starve, 
and ignore their unemployment systems one day may have their 
State legislators delivering such remarks.
    Federal oversight is needed over States' unemployment 
systems, along with resources to modernize their 
infrastructure. CARES Act programs ought to remain in place 
until recovery has reached all sectors. Otherwise, for 
communities like mine, I fear it will set us back in our path 
to recovery.
    Thank you.
    [The prepared statement of Mr. Rodriguez appears in the 
appendix.]
    The Chairman. Thank you, Senator. Mr. Neilly?

              STATEMENT OF LES NEILLY, PRESIDENT, 
          NEILLY CANVAS GOODS COMPANY, PITTSBURGH, PA

    Mr. Neilly. Good evening, Chairman Grassley, Ranking Member 
Wyden, and the other distinguished members of the Senate 
Finance Committee. Thank you for the invite, and for allowing 
me to be here this afternoon, or this evening. It is an honor 
and a privilege for me to represent small business owners 
across our great country, and to express my experiences 
regarding the extra $600 a week Pandemic Unemployment 
Compensation enacted as part of the CARES Act bill.
    I know I am not alone, as countless other small business 
owners have had similar experiences. My name is Les Neilly, 
president and majority owner of Neilly Canvas Goods Company, a 
fourth-
generation family business founded in 1940. We are located in 
Pittsburgh, PA, where we manufacture tarpaulins for trucking 
and industrial use, and we also make, install, and service 
commercial and residential fabric awnings. We have a total of 
11 part-time and full-time employees between our two locations 
in Pittsburgh and Maryland.
    Our employees make between $14 and $21.25 per hour, in 
addition to the benefits that I describe in my full written 
testimony. With the passage of the CARES Act, the extra $600 a 
week of unemployment compensation amounts to $15 an hour based 
on a 40-hour week. That alone pays our lowest paid employee 
more than they make working a 40-hour week, and all they have 
to do is sit at home.
    Pennsylvania Governor Wolf announced the shutdown of all 
nonessential businesses on March 19th, effective immediately. 
Since the trucking industry is essential, we were able to 
continue to operate that side of the business. However, due to 
the lack of orders from our customers, we laid everyone off 
effective March 23rd. We had enough orders to call two 
employees back to work for Monday, April 6th, and were able to 
call two additional employees back later that week. On April 
24th, two employees individually asked to see their pay stub, 
as all of our employees are paid by direct deposit. Once they 
reviewed their pay stub, they stated that their co-
workers who were still at home laid off were making more money 
than those employees who were working, and that was not fair.
    One of those individuals told me that they and their spouse 
were going back on unemployment, and the couple did not show up 
for work on April 27th and 28th. The other individual asked if 
it was possible to have a rotating schedule with the employees 
who were still laid off so everyone could participate in 
getting the extra $600 a week, instead of their co-workers who 
were laid off the entire time. They stated they knew I was 
trying to run a business, understood that I had to make tough 
decisions, but they were missing out on the extra $600 per week 
the Federal Government mandated for the laid-off workers, and 
they wanted to share in the pot of gold.
    We applied for a Paycheck Protection Program loan, and the 
money was deposited in our payroll account on Tuesday, April 
28th. Once the PPP money hit, I called all the laid-off 
employees and told them to report to work on April 29th. The 
couple who declared they were going back on unemployment 
discovered they were not eligible for 2 days' worth of 
unemployment and a partial of the $600 a week, costing them 2 
days of wages, which is another ramification of this bad 
policy.
    We instituted a $20 per-day bonus for each day the 
employees worked through the end of June, retroactive to when 
we called back the first two employees. We did this as an 
attempt to ease the resentment of the people who worked versus 
the laid-off employees. Since everyone was called back to work, 
employee morale has seemed to be improving.
    May I suggest, as a business owner and someone who, like 
many other small business owners who have experienced similar 
situations, do not pay someone more money than they make in a 
40-hour work week? Pay the laid-off workers the full amount 
they earn in a week to make them whole and nothing extra.
    Paying someone laid off more than they make in a week for 
unemployment compensation is rewarding them for being laid off, 
and penalizing an employee who is helping the company survive 
and move forward because they are working. Running a small 
business or any sized business is hard enough on a daily basis 
without having to deal with situations created by Congress that 
put business owners in the position to mitigate resentment 
between employees.
    Employees who are working to help keep the business afloat 
feel frustrated and angry that their laid-off co-workers are 
reaping rewards bestowed upon them by elected representatives, 
and less than 10 percent of these elected officials own and 
operate a business and understand the ramifications this policy 
could and has created. Further, I am concerned that small 
business owners who survive this historic downturn will be 
saddled with high unemployment taxes as a result of this 
policy.
    Thank you for allowing me to express my experiences 
regarding the extra $600 a week unemployment compensation. I 
appreciate the opportunity to appear in front of the Senate 
Finance Committee representing small business owners, and I 
hope you consider my testimony when contemplating future 
legislation to extend the CARES Act unemployment compensation 
and the amount paid to laid-off workers on a weekly basis.
    I will be happy to answer questions at a later time.
    [The prepared statement of Mr. Neilly appears in the 
appendix.]
    The Chairman. Thank you, Mr. Neilly. Now we go to Ms. 
Evermore.

  STATEMENT OF MICHELE EVERMORE, SENIOR RESEARCHER AND POLICY 
    ANALYST, NATIONAL EMPLOYMENT LAW PROJECT, WASHINGTON, DC

    Ms. Evermore. Good evening, Chairman Grassley, Ranking 
Member Wyden, and members of the committee. I am grateful for 
the opportunity to testify today. And as a fellow Iowan, I am 
particularly thankful for Chairman Grassley's great work on 
this issue.
    I am Michele Evermore. I am senior researcher and policy 
analyst with the National Employment Law Project. In this 
moment in history, it is easy to focus solely on the ways in 
which our lives, the world, and the national economy feel out 
of control. As gaps in benefits for unemployed workers have 
taken center stage, we must remember that the CARES Act you 
enacted is having a dramatic and positive effect on tens of 
millions of people who are out of work, particularly for 
workers who are paid low wages. These benefits are saving 
lives. Compounding centuries of structural racism, the 
unemployment crisis is affecting communities of color most 
dramatically. A recent Washington Post poll showed that 16 
percent of black workers reported being laid off, as well as 20 
percent of Latinx workers. At the same time, 11 percent of 
white workers and 12 percent of workers from other racial 
groups reported being laid off.
    Pandemic Unemployment Assistance is helping both middle-
class, self-employed workers and lower-paid workers--often 
misclassified as independent contractors--to weather an 
economic storm that has left them stranded in a largely shut 
down economy. Pandemic unemployment compensation is an 
essential benefit in this moment, particularly because so many 
States have lowered their unemployment insurance benefit 
levels. They no longer provide counter-cyclical stabilization 
during a recession.
    Please refer to my written testimony for many examples of 
how this benefit is making a huge difference to workers. It 
does create a disincentive to work, as we have seen with the 
recent decline in unemployment numbers. We should not overlook 
how critical it is for workers to maintain a connection to work 
right now. For so many people, there is more to a job than a 
paycheck. In these uncertain times, workers want stability, and 
their jobs may be the source of health-care benefits and 
retirement security.
    Finally, re-employment bonuses are not the answer. They are 
based on the premise that workers are not looking hard enough 
for work, when work may not even be there to find. Workers and 
employers benefit from an unemployment system that gets workers 
back to the right job, not just any job. Employers who want to 
bring workers back part-time as they start back up should 
consider work sharing to bring workers back but still allow 
them to get a UI benefit.
    Policymakers need to learn the lesson of the Great 
Recession. Many families and communities never recovered. The 
response to the last recession did not inject enough money and 
was not sustained enough. A robust, continued program will keep 
workers in place and ready to resume employment once it is 
safe. We simply cannot pretend that health and economic 
conditions will just disappear in a few months.
    For all its potential to help workers and stabilize the 
economy, the UI system does face challenges. It does not reach 
enough workers, and it does not provide enough wages, with only 
27 percent of unemployed workers getting a benefit that only 
replaced about 45 percent of income last year. Worse, during 
the Great Recession black workers were on average 13 percent 
less likely than white workers to receive benefits, and Latinx 
workers were 4 percent less likely. And all States struggled to 
get these programs up and running.
    How did a program that could do so much good struggle so 
much? First, UI administration is underfunded. In 2020, Federal 
administrative funding for UI was $2.14 billion. Back in 2001, 
that funding was $2.21 billion. Given increases in the cost of 
living and the growth in the working population, that 
represents a big reduction. At the same time, the highest 
number of new claims for any single week in history before this 
crisis was 695,000 in October of 1982, as the Secretary 
mentioned. That is in contrast to new claims of 3.3 million for 
the week ending March 21st; 6.6 million the following week; 5.2 
million the week after that; and initial claims in the millions 
every week since. The fact that UI systems did not collapse 
entirely under the weight of the demand is a testament to the 
dedication of UI administrators and staff across the United 
States, but substantial additional emergency funding will be 
necessary.
    Since the last recession, States also cut benefits by 
reducing duration and adding confusing barriers to access. 
Systems have been calibrated to prevent benefit overpayments at 
the expense of paying earned benefits, causing erroneous 
denials and false fraud accusations. That slows benefit 
payments in a crisis.
    Finally, any steps taken to reopen the economy must ensure 
that worker health and safety are paramount. Workers receiving 
UI cannot refuse suitable work and continue to get benefits. 
However, workers are allowed to refuse unsuitable work. As 
requested by more than 20 members of the Senate, ETA should 
make it clear how Federal requirements ensure suitable work 
does not include unsafe work.
    To move forward, we need to establish a way to increase 
benefit duration as the economy calls for it, rather than rely 
on ad hoc extensions that could come erratically, force States 
to continually reprogram their systems, and end abruptly.
    Ranking Member Wyden has proposed a good way to scale 
benefits, as have Senators Reed and Bennet. I look forward to 
working with you to build on the success of the programs this 
committee developed to meaningfully help the people most hurt 
by the economic crisis this pandemic created.
    [The prepared statement of Ms. Evermore appears in the 
appendix.]
    The Chairman. This is how we will finish the day out. First 
of all, I believe that it will just be Senator Wyden and me 
asking questions. Senator Wyden wanted two rounds, so I will 
give him the last 10 minutes of the meeting. But since other 
people are not here--just in case you are not accustomed to how 
the Congress works--a lot of members who cannot be here submit 
questions for answering in writing. So if you get those, I 
would ask you to respond in writing, and as quickly as you can 
after you receive those questions.
    So I think I will probably just use 5 minutes.
    Ms. Townsend, in your testimony you noted that Iowa has 
worked with employers to prevent layoffs by promoting the Iowa 
Voluntary Shared Work program. This program allows employers to 
reduce hours instead of laying people off, and those with 
reduced hours can receive a partial UI check. What are some of 
the things your agency has done in Iowa to make businesses 
aware of this opportunity? And I will follow that up with 
another question.
    Ms. Townsend. Thank you, Senator Grassley. Yes, we have 
been working hard from the beginning of the pandemic to educate 
employers about the availability of the Voluntary Shared Work 
program, as we call it here in Iowa. When we started the 
pandemic, we only had a few employers with about 800 employees 
taking advantage of the program. We are currently at over 183 
employers with over 8,400 employees.
    We started with having webinars with employers that we 
recorded starting March 17th, with question and answer 
information about the program. It was not the only thing we 
talked about in the program, but it was a share of that 
program. We posted those videos online. We had a few other 
webinars that also discussed the Voluntary Shared Work program. 
We also provided training to our staff, who were answering 
calls and working with employers about the programs, so they 
could also answer questions about the program as well.
    We have a very robust COVID-19 web page, and we have 
provided a fact sheet about the program on the COVID-19 web 
page to spread the information. My deputy, Ryan West, has been 
giving interviews and talking to economic developers and 
alliances across the State, and providing information and 
education about the programs. So we have done an extensive 
amount of outreach across the State to be able to educate 
employers about the benefits of that.
    The Chairman. I think you have answered my second question, 
but let me ask it anyway, and you can say you do not have 
anything to add, if you do not.
    So it goes beyond Iowa, this question. How can we make sure 
more employers across the country take advantage of the 
opportunity to keep more workers in their jobs?
    Ms. Townsend. I think it is a matter of providing more 
outreach and education through the different State agencies.
    The Chairman. Okay; thank you.
    Now, Mr. Neilly, thanks for sharing what it is like to be a 
small business owner right now. Your family business has 
weathered a lot, I am sure, since it began in 1940. And you 
mentioned some of those challenges in your testimony. It is 
also great to hear about the pay and benefits that you offer 
your employees, including the daily bonus you paid to support 
them as they returned to work.
    A question: you make a powerful point in your testimony, 
saying the $600 payments are, quote, ``penalizing an employee 
who is helping the company survive,'' end of quote. Some might 
say you should just call the State UI agency and report them so 
that they lose unemployment.
    What kind of a spot does that put you in? Others say--wait, 
before you answer that question--others say you should simply 
double your wages. That is really easy for them to say--kind of 
a question to you, right? If this $600 were continued to next 
year, how do you think that would affect your business and 
other businesses like yours?
    Mr. Neilly. Well, first of all, as far as the unemployment 
situation goes, fortunately I did not have to make that 
decision because all of our employees did come back to work 
once I called them to let them know that we got the PPP money. 
As far as doubling wages, you know, our business is down about 
35 percent right now, so I do not know how anyone can just make 
that type of a statement without knowing the goings on and how 
the business climate is for the country.
    Some businesses are doing very well that do the PPP-type 
products, and other businesses are struggling, as we are. So I 
feel that we offer competitive wages, plus the benefits, and to 
try to increase those wages substantially in this current 
economic time is not feasible at this time.
    The Chairman. Ms. Evermore, I do not have a question for 
you, but where did you go to high school in Iowa?
    Ms. Evermore. Fort Dodge Senior High.
    The Chairman. No kidding. Well, welcome. I am sure you go 
home a lot.
    Mr. Neilly. Excuse me, Mr. Chairman----
    The Chairman. I thought you were done. I am sorry.
    Mr. Neilly. There was one other question that you had that 
I did not address yet. As far as the $600 being continued till 
the end of the year, I cannot say whether that would effect us 
or not. There is the possibility, due to the current downturn 
in our business with the pandemic situation, that if the 
business does not increase, we may end up having to lay off 
employees once the PPP money expires.
    So it would be good for the employee who is laid off, but 
again it is not good for the rest of the people who are 
continuing to work who are not benefiting from that. So we may 
have to try to look at a shared work program where we rotate, 
as someone said, which I did not consider in the past but could 
possibly consider in the future.
    The Chairman. Okay. Now, Senator Wyden for two turns.
    Senator Wyden. And I will not go a full two rounds, Mr. 
Chairman. Thank you for your courtesy.
    Thank you all for your patience. About 3\1/2\ hours ago, or 
something along those lines, I made a point that I think is 
really critical, and that is that everybody wins when the 
workers can go back to safe workplaces. And so what we are 
trying to do is think through how to do that. And let me, if I 
might, start with Scott Sanders. Mr. Sanders, you are out in 
cyberspace somewhere. Is that right?
    Mr. Sanders. That is correct, Senator.
    Senator Wyden. Wonderful. So you represent the association 
of State officials who handle these unemployment issues. The 
central question in the $600 a week debate that we have been 
thrashing through here for hours on end is that I and others on 
our side wanted 100-percent wage replacement. That was what we 
called for, and that has always been our first choice.
    Secretary Scalia said the States could not do that. So, 
after days of being at an impasse, we came up with this idea of 
rough justice. Now all through the afternoon when Secretary 
Scalia was here, he was zigging and zagging on the question of 
what the States were capable of actually doing. And since you 
are the point person for the States, I thought it would really 
be helpful if you could just give me a direct answer to the 
question, is it not still the case that it would be difficult 
for most States to implement 100-percent wage replacement for 
each worker?
    Mr. Sanders. So this may sound like a bureaucratic answer, 
but that is a reality under the current state of the UI systems 
across the U.S. So any change would take time. It would also 
affect the retroactivity of claims processing. The other 
challenge is that earnings data lags as it comes into State 
agencies, so you actually do not know what you are replacing 
for each worker.
    I also do not know how you would do that on self-employed 
individuals. Also, I think even a simple change without proper 
lead time for States to design, test, and implement will be 
challenging. And then you also have the challenge of 
communicating this change to the public.
    So implementation of something like this would vary greatly 
from State to State. But I believe that if any change has to be 
made, our members would prefer a flat dollar amount as the 
easiest thing to do.
    Senator Wyden. Okay, so it still would be very difficult 
for States--with all of those factors that you described, it 
would be very difficult still for most States to implement 100-
percent wage replacement. And I am not going to ask you to take 
us through the nuances of the law again.
    Ms. Evermore, thank you for all the terrific advocacy work 
that you have done. And I have a couple of questions for you.
    If you look at what Congress did in the CARES Act to 
supercharge unemployment benefits, in your view would there 
have been a quicker, more efficient way to get the desperately 
needed relief to people who need it?
    Ms. Evermore. No. The unemployment insurance system was 
really the best system in place to quickly ramp up benefits and 
get benefits out the door. This is a system that is designed to 
respond to recession. There really was not any other existing 
system in place that could have gotten benefits out in the way 
that UI did.
    Senator Wyden. Then I would just like for the record, 
because you have these years of expertise on various kinds of 
reform proposals, to get your thoughts on the trigger idea, 
this idea of tying future benefits to actual economic 
conditions in real-world markets. And one of the reasons I was 
interested in it is, I have seen various Republican leaders--
and one of my colleagues, a senior Republican member of the 
leadership, who wrote an op-ed in The Hill publication--saying 
that the basic proposition of sort of tapering off benefits as 
the economy got better was the kind of thing that might be 
appealing as a way to break the gridlock.
    I have been interested in this. Senator Bennet has been 
interested in this. We have colleagues who have pursued various 
approaches to this notion of tying the benefits to conditions 
on the ground. What is your thinking on that?
    Ms. Evermore. I think that your proposal, as well as Reed's 
and Bennet's proposals, are very logical. I think they make a 
lot of sense, in part because these benefits really should be 
tied to an economic trigger rather than a series of ad hoc 
proposals. But even in the current crisis, they are extra 
important. It is really important to have automatic triggers 
right now because what we really cannot have with this level of 
unemployment is for systems to be turning on and turning off, 
and turning on and turning off, as Congress makes sort of ad 
hoc decisions. The computer systems are already as stressed as 
they could possibly be.
    Senator Wyden. I think that makes the equity case and the 
efficiency case, along the lines of exactly what I want to do, 
because this is obviously a complicated area. I told the 
Secretary I would be interested in some of the ideas of trying 
to have a more flexible Federal role with respect to 
administering benefits. But a trigger, based on what you just 
responded to my question with, is something that would make 
sense that we could go to fairly quickly, and I really 
appreciate that answer.
    Mr. Rodriguez, thank you for your leadership. Congresswoman 
Shalala told me about your expertise, and I can see why. It 
looks to me like you all have had a lot of these problems down 
there for years, and I am just curious. In the 14 months 
between when Governor DeSantis was warned of the system's flaws 
and the arrival of the pandemic, what was done to prevent the 
system's failure, if anything?
    Mr. Rodriguez. Senator, thank you for your question. 
Obviously, thank you for acknowledging Representative Shalala's 
leadership in our area as well. The short answer is, nothing. 
The system that we have in Florida has suffered by willful 
neglect for a long time. And when I say ``willful,'' none of 
the flaws in the system--and there are a range of flaws in the 
system--was hidden.
    It was the subject of a number of Department of Labor 
audits back in 2013-2014. There was a Department of Labor 
intervention. There was audit after audit, and the most recent 
one in 2019 was on the Governor's desk. And we recently also 
learned that on his way into office Governor DeSantis was 
advised of the strategic threat that the weakness of our 
unemployment system in Florida with the DEO posed to the State 
of Florida. I mentioned specifically, I spoke of individual 
constituents in the Miami-Dade area and how they have been 
impacted by the failures of the system.
    But there are other aspects of this as well. Employers who 
have had to lay off workers are also, frankly, horrified 
watching their former employees have to go through eviction, et 
cetera, or face eviction once our eviction moratorium is 
lifted.
    And the last thing I will mention is, the State of Florida 
is leaving millions of dollars on the table. We are 
implementing the PUA program----
    Senator Wyden. How many millions of dollars, in your view, 
is the State of Florida leaving on the table?
    Mr. Rodriguez. It is hard to estimate. Others probably will 
do a better job. But if I could very quickly paint the picture 
with respect to the PUA program, obviously the program that 
covers independent contractors, gig workers, and the self-
employed. Our rates of bringing people onto the program when 
they are ineligible for traditional unemployment are very low, 
slightly more than a quarter. I checked the number this 
morning. It was about 28 percent.
    That rate is far below most States. And another thing, when 
you look at the benefit amounts the State of Florida is 
awarding, the State has been awarding the minimum benefit level 
as a default, and it created an extremely cumbersome system for 
employees--excuse me, not employees, for people who are 1099 
workers--to be able to establish how much they are owed above 
the minimum. So cumbersome that--and this is very recent--they 
are literally encouraging people to fax in documents, right? I 
mean, this is 2020. And they just came out with their process, 
literally in the last couple of days, as to how gig workers 
would prove up the benefits that they are owed beyond the 
absolute minimum of $125.
    And so, in addition to the fact that we are not bringing 
people onto the program quickly enough, or about half the rate 
of other States, the State of Florida is also defaulting to 
about half the benefit level. And so we are probably, you know, 
leaving $3 in Washington for every $1 we draw down.
    Senator Wyden. Thank you, Mr. Rodriguez. And to all of you, 
you have been an excellent panel. We have been at it, as I say, 
for it looks like close to 4 hours at this point.
    I would only say, as we wrap up, Mr. Chairman, that I hope 
that the big takeaway from this discussion is that most 
Americans want to work. They understand that that is the path 
to climb up the economic ladder. And I have been visiting with 
a lot of unemployed people, and all of them come back and say, 
``Look, I can have a much better life if I am in the 
workforce.'' And there is a dignity and an appreciation of what 
it means to be able to work for a paycheck.
    And let us get this help--and we are going to need it after 
July 31st--to people who genuinely cannot otherwise pay rent or 
pay for groceries. And I would like to try to find a path to do 
that in a bipartisan way.
    I disagreed with the Secretary. The first thing the 
Secretary did after we passed our original bill was, he went on 
Fox Business, and I was going to see what he had to say about 
our new legislation, and he said our big concern was that 
unemployed people were going to be dependent on government 
help.
    I just do not agree with that. I hope that every member of 
this committee will see that the overwhelming number of 
Americans appreciate work, have a strong work ethic, see that 
as the path to get ahead. I know that you and I have talked 
about that in the past, and I hope that is going to be the 
foundation of our work going forward.
    The Chairman. Yes. I told you we were done when Senator 
Wyden was done, but Senator Portman will be on TV for 5 minutes 
of questions.
    Senator Portman?
    Senator Portman. Thank you, Senator Grassley. Can you see 
me on TV?
    The Chairman. Yes; there you are.
    Senator Portman. Well, first of all, I appreciate you 
letting me join you virtually. I was there with you, as you 
know, for a couple of hours and enjoyed the back-and-forth. And 
I think everything that Senator Wyden just said is consistent 
with us figuring out a way to move forward here, where we are 
not providing a disincentive to work by allowing people who are 
on unemployment insurance to be paid more than they would get 
paid if they went to work. And as we know from the studies, it 
looks like 60 to 70 percent of the people who are on 
unemployment insurance are making more than they would if they 
went back to work.
    The Congressional Budget Office says that, moving forward, 
that is going to be even a larger percentage, up to 80 percent 
of the people getting more. So we have to figure this out. And, 
Mr. Neilly, you talked a little about this. One thing I found 
that was interesting in your testimony that I would like you to 
expand on, if you could briefly, is a reason this is a problem. 
Because some people say, well, you know, under the unemployment 
insurance systems being enforced in some States, you cannot 
stay on unemployment insurance if your employer offers you a 
job. You have to have this search for work requirement.
    And I know Secretary Scalia has talked about that in the 
past. But the reality is, if you have employees who are making 
a lot more on unemployment insurance than they are going back 
to work, as an employer you are very hesitant to ask them to 
come back to work. And I think you talked about that; you 
surely did in your testimony. Can you talk about how this 
disincentive makes it hard for an employer to ask them to come 
back to work and perhaps hurt the relationship with that 
employee?
    By the way, not too long ago, only a few months ago, many 
employers were just desperate to get workers and did what they 
could do to keep them, with the low unemployment rates and wage 
growth, and now we are in a different situation.
    But can you talk a little about that? Why is this a problem 
to have this big disparity?
    Mr. Neilly. Senator Portman, the $600 extra--obviously all 
the employees who were on unemployment were happy to be on 
unemployment at the time because they were getting the extra 
money that was helping with whatever expenses they had.
    I did not really feel any bad feelings about calling people 
back because they were now coming off of unemployment and 
getting the extra $600. I called them back because of the PPP 
requirements of using 75 percent of the money within an 8-week 
period. And if you keep people on unemployment, then obviously 
your employee rolls and payroll are not going to be as high as 
they could be. And then you would end up having to pay back the 
money as a loan, versus the possible forgiveness of the money.
    So because of that, I didn't have any real issue in calling 
people back. I was very happy that no one refused to come back, 
and everybody, when I talked to them, was in agreement and 
said, ``Fine, we will see you tomorrow.'' So it was a little 
bit a relief that I did not have any pushback from any of them.
    Senator Portman. You also said in your testimony that 
people came back, and then they went back to UI because they 
could make more money under UI.
    Mr. Neilly. That is correct. We did have one of the married 
couples, one of them talked to me at the time, and they just 
arbitrarily thought they could go back on unemployment. 
Unfortunately, in the conversation that we were having, I 
totally missed that comment. And when they did not come to work 
on the Monday and the Tuesday following payday that Friday, and 
they did not call off, I was a little bit concerned.
    I had no idea what was going on. And here I found out later 
that they thought they could go back on unemployment and 
declare themselves to be unemployed and be able to participate 
and try to get some of that extra $600 per week.
    Senator Portman. Well, let me just say, in talking to 
employers, particularly employers who have had a tough time 
getting and keeping employees during an economy that was very 
different than the one now, to force people to come back is bad 
for them, personally. And I am certainly hearing that, and it 
sounds like you have had that situation with somebody coming 
and then wanting to go back because they can make more.
    In Pennsylvania, by the way, it is basically $26 an hour 
for unemployment, equating to about $200 per week, compared to 
what the wage is. So, you know, there is the disparity there.
    I also wanted to talk to Ms. Townsend about the question of 
whether a flat benefit amount is the only thing that you can 
do. I think that is what we are hearing from, certainly Ohio 
and from other UI offices around the country.
    We asked that question this morning. Senator Wyden asked 
it; I asked it. Basically it got the response that we aren't 
sure from the Secretary, but what is your response to that, Ms. 
Townsend? In your testimony you mentioned the flat benefit 
amount would be absolutely essential to being able to complete 
the program efficiently. How long do you think it would take 
you to have an individualized calculation where you would do a 
customized calculation, as Senator Wyden and I were talking 
about today, where we want to have wage replacement? Would that 
be possible for you to do in an efficient and quick manner?
    Ms. Townsend. I am sorry, Senator Portman, I have had a 
really hard time hearing your question. I think you were asking 
about how long it would take us to be able to implement a 
payment program that was based on a percentage or maximum----
    Senator Portman. That is correct. In other words, looking 
at your testimony, it sounds like you are saying a flat benefit 
like $600, or whatever the number is, is all that you can do 
efficiently and quickly. Is that correct?
    Ms. Townsend. That is correct.
    Senator Portman. As opposed to a customized benefit that 
would relate to allowing people to get their full wage 
replacement?
    Ms. Townsend. That is correct. If FPUC is extended, but 
let's say the amount is changed in reflection of the difference 
between $600 and $300 in Iowa, it would be a fairly simple 
change to go from $600 to $300, and there would probably be no 
delay in payment of benefits. If it is changed to a wage 
replacement for individuals, those claims would have to be 
individually reviewed. That would take several months for us to 
be able to implement, so probably what would happen is, come 
the first of August, the FPUC payments would end. We would 
continue to pay the regular State benefits, and then we would 
take a few months to be able to develop and implement the 
program that would reimburse people for the 100-percent wage 
replacement. They would probably get a retroactive payment----
    Senator Portman. You have answered my question. That is 
great.
    Ms. Townsend. Okay.
    Senator Portman. For the next 7 or 8 weeks you are going to 
have countless employers across the country like Mr. Neilly who 
are trying to reopen and get back to normal, but if you have 
the $600, it is going to be tough. And then what happens after 
July 31st?
    I think this is an argument, again, for a back-to-work 
bonus. It is a flat rate. I would like it to be customized, but 
that cannot be done as a practical matter. And Scott Sanders is 
nodding his head, representing all the States.
    But what do you think about that, Mr. Sanders, if you had a 
flat rate as a return-to-work bonus? Could that be 
administered?
    Mr. Sanders. [Garbled speech.]
    Senator Portman. Mr. Sanders, I can hear you. Can you hear 
me?
    [No response.]
    Senator Portman. Ms. Townsend, why don't you answer that 
question for him, for Iowa.
    Ms. Townsend. Sure. What I would say is, if that's a 
program that is run through the unemployment system, that would 
be a new program, and if it paid a bonus for people who 
remained in the workforce, if that is what the question is, 
that would be a new program.
    If you are talking about paying a bonus to people who go 
back to work, that essentially is going to be the same thing.
    Senator Portman. It is 600 bucks now Federal.
    Ms. Townsend. Okay.
    Senator Portman. If you go back to work, you take some of 
that with you, and the amount I have talked about is $450. But 
whatever the amount is, it is a flat rate. Is that something 
that is administrable?
    The Chairman. After you answer that, can you sum up, 
Senator Portman?
    Senator Portman. Yes, Mr. Chairman.
    Ms. Townsend. It is, but I think it would take--it would 
take several weeks, if not a couple of months, to be able to 
implement.
    Senator Portman. Thank you, Mr. Chairman. I appreciate it.
    The Chairman. Okay. The CARES Act has provided 
unprecedented help to the American people in these challenging 
times. Many of the policies are still ramping up, and we have 
yet to see the full impact of what was passed a few months ago.
    I am thankful to our witnesses, including the Secretary of 
Labor, for the information they have provided about the CARES 
Act UI provisions, and, as a result, I think we all have a 
better picture of what has worked and what has not worked.
    The clear message I have heard is that any future 
legislation that is considered must be focused on getting 
people reconnected with work. And I would surely think that 
that would be some sort of a compromise between what Senator 
Wyden is talking about and what Senator Portman is talking 
about. We had the best economy that we have had in 50 years 
before COVID-19, and everything we do should be focused on 
returning to that situation as quickly as possible.
    It is also important that we coordinate our efforts, as 
there are many policies other than the UI that Congress has 
passed to help those affected by the virus pandemic. We also 
need to keep a close eye on the economy. We are beginning to 
see signs of improvement. We hope it continues. And we hope we 
can avoid the risk of more business closures and more long-term 
unemployment.
    We tend to be learning about the pandemic and the economy 
affected by it. Every day we are learning more about how to 
prevent it, how to treat it, how to cure it. And as we do, I 
know all Americans will work together to get our economy 
growing again.
    Thank you all very much. The meeting is adjourned.
    [Whereupon, at 6:13 p.m., the hearing was concluded.]

                            A P P E N D I X

              Additional Material Submitted for the Record

                              ----------                              


       Prepared Statement of Michele Evermore, Senior Researcher 
          and Policy Analyst, National Employment Law Project
    Good morning, Chairman Grassley, Ranking Member Wyden, and members 
of the committee. I am grateful for the opportunity to testify today. I 
am Michele Evermore, a senior researcher and policy analyst with the 
National Employment Law Project (NELP).

    NELP is a nonprofit research, policy, and capacity building 
organization that for more than 50 years has sought to strengthen 
protections and build power for workers in the U.S., including people 
who are unemployed. For decades, NELP has researched and advocated for 
policies that create good jobs, expand access to work, and strengthen 
protections and support for underpaid and jobless workers both in the 
workplace and when they are displaced from work. Our primary goals are 
to build worker power, dismantle structural racism, and ensure economic 
security for all.
     30 million workers have had access to a transformative benefit
    A record number of workers have lost their jobs as a result of the 
pandemic. Friday's jobs report showed a surprising 13.3-percent 
unemployment rate, lower than feared, but still an alarmingly high rate 
which would be much higher if it included workers misclassified as 
temporarily out of work or not actively seeking work due to relaxed 
work search requirements. Moving forward, we must continue to work 
together to fill the gaps in coverage, increase equity, and maintain 
benefits for those who are already eligible, until the economy 
sufficiently improves. NELP applauds the bold action this committee and 
Congress has taken, but more can and must be done.

    In this moment in history, it is easy to focus solely on the ways 
in which our lives, the world, and the economy feel out of control. As 
gaps in benefits for unemployed workers have taken center stage, it is 
important to remember that the CARES Act you enacted is having a 
dramatic and positive impact on tens of millions of people who are out 
of work and must stay home to care for their families. Particularly for 
workers who are paid low wages, these benefits are the difference 
between not making ends meet and being able to afford to stock up and 
remain home safely. These benefits are saving lives.

    Compounding centuries of structural racism, the unemployment crisis 
is affecting communities of color most dramatically. A recent 
Washington Post-Ipsos poll from May showed that 16 percent of Black 
workers reported being laid off, as well as 20 percent of Latinx 
workers. At the same time, 11 percent of white workers and 12 percent 
of workers from other racial groups reported being laid off.\1\ Because 
of the massive racial wealth gap in the United States, workers of color 
have less savings to tide them over until they find their next job. The 
Brookings Institution reports that Black families have one-tenth the 
wealth of white families.\2\ For all who are out of work, but 
particularly for Black, Latinx, and Indigenous workers and other 
workers of color, unemployment benefits are a vital lifeline in this 
time of crisis.
---------------------------------------------------------------------------
    \1\ Tracy Jan and Scott Clement, ``Hispanics are almost twice as 
likely as whites to have lost their jobs amid pandemic, poll finds,'' 
Washington Post, May 5, 2020, https://www.washington
post.com/business/2020/05/06/layoffs-race-poll-coronavirus/.
    \2\ Kriston McIntosh, Emily Moss, Ryan Nunn, and Jay Shambaugh, 
``Examining the Black-white Wealth Gap,'' The Brookings Institution. 
February 27, 2020.

    Take, for example, Alicia, a worker from the District of Columbia 
who was laid off in March. Alicia needed to be home to handle distance 
learning for her two teenage children. When her older daughter was 
deemed an essential worker, Alicia provided care for her granddaughter. 
She applied for unemployment insurance and received UI and the $600 
Pandemic Unemployment Compensation (PUC) benefit. ``I don't know how I 
would be able to do anything without the $600,'' she said. ``I reached 
out to my mortgage lender and they allowed just one month of deferment. 
If it was just UI, it would have been much harder to pay my bills.'' 
And when her employer made it possible to work from home, she returned 
---------------------------------------------------------------------------
to work, ending her UI and PUC benefits.

    In addition to the benefits provided by State unemployment 
insurance (UI) programs, Pandemic Unemployment Assistance (PUA) is 
helping both middle-class self-employed workers and lower-paid workers 
in the gig economy (many of whom are misclassified as independent 
contractors) to weather an economic storm that has left them stranded 
in a largely shutdown economy, with social insurance systems otherwise 
ill-equipped to provide them help in an emergency.

    It is crucial to this discussion that we understand that we are not 
dealing with a cyclical or even structural recession like ones we've 
seen in the past few decades. We are dealing with an international 
pandemic that has forced us to shut down our economy for the sake of 
saving lives. Our State, local, and Federal Government have taken 
extraordinary but necessary measures to protect public health. Although 
we are slowly starting to reopen our economy, we cannot pretend that 
every thing will go back to normal in the next few weeks, months, or 
even years.

    A robust program of continued unemployment insurance will help ease 
this economic turmoil by keeping workers in place and ready to resume 
employment once it is safe to do so. But it will also provide a morally 
necessary lifeline to workers who will not be able to return to work 
for whatever reason, including because their employers have gone out of 
business, because they must reopen slowly for safety's sake, or because 
the demand is not there yet for the good or services they offer. We 
cannot pretend that the coronavirus and the economic disaster it has 
wrought will simply disappear in a few months. The Federal Government 
has a responsibility to make sure that people do not suffer exacerbated 
economic pain or face undue risks to their health and safety.
    unemployment insurance has always been a key economic stabilizer
    Unemployment insurance is the only ongoing program we have that was 
built to distribute funds during an economic crisis. It was created in 
1935 with the hope of stabilizing the economy by giving workers buying 
power when they find themselves involuntarily unemployed. UI succeeds 
in achieving several key goals:

        Help workers make ends meet. UI is intended to simply provide 
workers a benefit to help them make ends meet and support their 
families when they are out of work.
        Support people in their job search. UI helps to make sure that 
workers have the time and support they need to find a job that meets 
their skills and interests--one for which they are well suited and are 
likely to succeed in.
        Keep people connected to work. UI helps employers by making it 
possible for workers to maintain an connection to work, by providing 
access to employment services and encouraging work search, or through 
work-sharing.
        Uphold living standards. UI reduces the likelihood that 
periods of high unemployment will drive down wages for everyone. It 
helps people uphold their standard of living so that, as a society 
overall, we have wage stability.
        Preserve economic stability. In times of economic downturn, UI 
provides macroeconomic stability by maintaining overall worker buying 
power, which in turn supports businesses and the economy. In the last 
recession, economists Alan Blinder and Mark Zandi looked at the effect 
UI had on the economy and found that every dollar paid out in UI 
generated $1.61 in economic activity.

neglect of ui programs and systems has hindered their effectiveness in 
          this crisis and implementation of cares act programs
    For all its potential to help workers and to stabilize the economy, 
the UI system also faces serious challenges. Shamefully, the UI program 
historically excluded domestic and agricultural workers, which had a 
disproportionate impact on Black workers, and some of those exclusions 
remain in effect today--an area that obviously demands reform.

    Moreover, State UI does not reach nearly enough unemployed workers, 
necessitating the enactment of the PUA program. UI also fails to 
provide adequate wage replacement, especially in a period of 
government-mandated mass unemployment, so Congress enacted the Pandemic 
Unemployment Compensation (PUC) program. Finally, all States struggled 
mightily to get these new programs up and running. Now, we must ask 
ourselves, how did a program that could do so much good in precisely a 
crisis like this one struggle so much?

    First, we must acknowledge the massive decline in UI administrative 
funding, and lack of designated funding for the States to invest in and 
maintain a 21st-
century information technology (IT) infrastructure. In 2020, national 
administrative funding for UI was $2.14 billion. Back in 2001, that 
funding was $2.21 billion. Given increases in the cost of living and 
the growth in the working population, that marks a dramatic reduction 
over time.

    Using a simple inflation calculator on the Bureau of Labor 
Statistics website, the 2001 funding level is roughly $3.2 billion in 
today's dollars. At the same time, the highest number of new claims for 
any single week in history before this crisis was 695,000 in October of 
1982. That is in contrast to new claims of 3.3 million for the week 
ending March 21st of this year, which were followed by 6.6 million in 
the 2 following weeks, 5.2 million the week ending April 11th, and 
continuing initial claims in the millions every week since.

    This dramatic and instant decline in employment is unlike anything 
we have ever seen. Historically, recessions have a much slower onset 
and much lower new claims every week. The fact that UI systems did not 
collapse entirely under the weight of the demand, particularly given 
the low funding levels they had to work with, is a testament to the 
enormous dedication of UI administrators and staff across the United 
States.

    It is also important to understand that our unemployment system is 
a patchwork of various State systems, some of which have been modified 
in recent years to intentionally make it more difficult to access 
benefits. Indeed, just last summer, NELP published ``Are Unemployment 
Systems Still Able to Counter Recessions?'' detailing how many State 
systems were not recession-ready precisely because of the steps they 
had taken to make their UI systems impenetrable to so many unemployed 
workers.\3\
---------------------------------------------------------------------------
    \3\ Michele Evermore, ``Are State Unemployment Systems Still Able 
to Counter Recessions?'', National Employment Law Project, June 6, 
2019.

    As States have moved to largely online processing, many have 
created systems that are inaccessible to workers on the other side of 
the digital divide, workers with limited English proficiency, and 
people with disabilities. For instance, as NELP outlines in its 
prescient 2015 report on the Florida unemployment system, titled 
``Ain't No Sunshine,'' the U.S. Department of Labor's Civil Rights 
Division ruled that Florida's system was discriminatory and 
inaccessible.\4\ An example of this unequal access is Florida's 
procedure for directing calls needing translation services: the 
procedure was to ask claimants in English what language they needed 
services in, but to speak slowly. The system also had no TTY or other 
assistive services for callers with disabilities.
---------------------------------------------------------------------------
    \4\ George Wentworh and Claire McKenna, ``Ain't no Sunshine: Fewer 
Than One in Eight Unemployed Workers in Florida Is Receiving 
Unemployment Insurance,'' National Employment Law Project, September 
15, 2015.

    State legislatures, pressured by business interests and looking to 
reduce the number of people eligible for unemployment insurance, have 
turned to a variety of benefit restrictions, including: (a) 
dramatically reducing duration of benefits; (b) narrowing the 
definitions of qualifying separation events; (c) increasing the amount 
of wages workers need to earn to qualify for UI; and (d) imposing 
stricter, yet no more effective, work search requirements. In addition, 
many States have narrowed workers' access to UI benefits by 
implementing technologies that may limit accessibility of the 
application processes.\5\
---------------------------------------------------------------------------
    \5\ George Wentworth, ``Closing Doors on the Unemployed: Why Most 
Jobless Workers Are Not Receiving Unemployment Insurance and What 
States Can Do About It,'' National Employment Law Project. December 
2017. Michele Evermore, ``Are State Unemployment Systems Still Able to 
Counter Recessions?'', National Employment Law Project, June 6, 2019.

    As a result, the nationwide percentage of jobless workers receiving 
UI last year was only 27 percent, and as low as 9 percent in North 
Carolina, as compared to 36 percent across the country before the onset 
of the Great Recession. In States like Florida, Georgia, and North 
Carolina, where State legislatures slashed the duration of available 
benefits far below the standard 26 weeks, the rates of unemployed 
workers receiving UI were below 15 percent, or half the national 
---------------------------------------------------------------------------
average.

    The decline in UI recipiency also reflects a dramatic increase in 
workers facing erroneous denials of their benefits by State UI 
agencies. According to U.S. Department of Labor, Employment and 
Training Administration (ETA) data on erroneous denials, the denial 
error rate for separation reasons in 2017 was 17.44 percent, while that 
error rate in 2007 was only 8 percent.\6\ Similarly, in 2017, 17.54 
percent of benefits were erroneously denied for nonseparation reasons, 
while in 2007, the improper nonseparation denial rate was only 9.9 
percent.\7\
---------------------------------------------------------------------------
    \6\ U.S. DOL Employment and Training Administration website, 
https://oui.doleta.gov/unemploy/.
    \7\ Calendar Year 2007 Benefit Accuracy Measurement Data Summary, 
https://oui.doleta.gov/unemploy/bam/2007/bam-cy2007.pdf.

    Part of this increase in erroneous denial has to do with the fact 
that systems have been over-calibrated to prevent over payments at the 
expense of paying appropriate benefits. States have programmed their 
computer systems to pause applications at every decision point, which 
can generate multiple eligibility determinations and denials. As we 
have seen, that is going to slow down benefits getting to the public 
---------------------------------------------------------------------------
when there is a crisis.

    Overconcentration on suspicion of fraud, especially when not 
coupled with a corresponding focus on employer fraud, worker 
misclassification, and UI system errors and failures, can wreak havoc 
on UI programs. For example, as part of the 2011 unemployment insurance 
reforms passed in Michigan, the State dramatically increased fraud 
detection efforts and penalties. When the State upgraded its 
information technology system, it added algorithms that over-flagged 
claims for fraud. That system, MiDAS, flagged at least 37,000 workers 
for fraud, with a staggering 93-
percent inaccuracy rate. Workers impacted had to pay back four times 
the benefits they received plus 12-percent interest, and many were 
driven into personal bankruptcy.\8\
---------------------------------------------------------------------------
    \8\ Michele Gilman, ``Did a Flawed Algorithm Drive Welfare 
Recipients to Suicide?'' The National Interest, February 18, 2020.

    The Department of Labor must examine why there is such a stark 
increase in erroneous denials of benefits over the past decade and 
should impose checks on States that are routinely mischaracterizing 
processing errors as claimant fraud.
 dol must issue complete and accurate guidance about workers' right to 
 refuse to return to unsafe work; if it fails to do so, congress must 
                                  act
    Any steps that States take to reopen their economies must be done 
with the utmost care for worker health and safety. No worker should be 
expected to return to a workplace where the employer does not implement 
sufficient measures to safeguard employees against exposure to COVID-
19.

    This is both a workers' rights and a public health issue. If 
workers are forced to go back to unsafe conditions, employers' 
negligence could result both in workers getting sick and in COVID-19 
spreading further throughout the community, prolonging the duration of 
the pandemic and the number of people being infected, while also 
exacerbating economic problems in the future. Rushing to reopen and 
forcing workers back to unsafe environments will only lengthen the 
duration of the crisis and worsen long-term economic conditions--
particularly for underpaid workers of color and women of color who are 
suffering higher rates of infection and mortality in this pandemic due 
to systemic racism related to healthcare and employment.

    Workers receiving unemployment insurance are not permitted to 
refuse ``suitable work'' and continue to get benefits. However, workers 
are allowed to refuse unsuitable work. As requested by more than 20 
members of the Senate,\9\ the Employment and Training Administration 
(ETA) must make it clear that suitable work does not include unsafe 
work, referring to situations where the employer has not taken the 
minimum precautions set forth by the Centers for Disease Control and 
Prevention's COVID-19 workplace guidelines, particularly if the 
individual is an older worker, immunocompromised, or more vulnerable to 
infection in some other way (e.g., because of a disability, or if the 
worker is caring for a vulnerable household member). ETA has thus far 
failed to issue clear guidance on the issue, which contrasts with 
helpful COVID-19 suitable work policies recently issued by California, 
Connecticut, Colorado, North Carolina, Texas, and other States.
---------------------------------------------------------------------------
    \9\ U.S. Senate Committee on Finance, May 19, 2020, https://
www.finance.senate.gov/ranking-members-news/wyden-democratic-
colleagues-press-trump-administration-to-protect-workers-from-choosing-
between-health-financial-security.

    Virtually every State UI law is clear that an offer of work that 
exposes a worker to an unreasonable degree of risk to their health or 
safety is, by law, unsuitable. For workers collecting regular UI, the 
Federal ``prevailing conditions of work'' provision applies (26 U.S.C. 
Section 3305(a)(5)(B)), which all States must incorporate into their UI 
laws. This provision, which dates back to the Social Security Act of 
1935, prohibits a State from denying UI to a worker who refuses work if 
``the wages, hours, or other conditions of the work offered are 
substantially less favorable to the individual than those prevailing 
for similar work in the locality.'' Here, the issue is whether the 
health and safety ``conditions of work'' are sufficiently serious to 
pose an unreasonable threat to the worker which, in turn, suppresses 
---------------------------------------------------------------------------
the working conditions of other workers in the labor market.

    For workers collecting Pandemic Unemployment Assistance (PUA) under 
the CARES Act, the Federal ``suitable work'' regulations governing the 
Disaster Unemployment Assistance (DUA) program apply to protect workers 
against returning to work that is unsafe to themselves, their families, 
or to the public. The regulation (20 CFR 625.13(b)(2)), which 
corresponds to the State ``suitable work'' laws, provides that ``a 
position shall not be deemed to be suitable for an individual if the 
circumstances present any unusual risk to the health, safety, or morals 
of the individual, if it is impracticable for the individual to accept 
the position. . . .'' The Federal ``prevailing conditions of work'' 
requirement also applies to the PUA program as does ``any comparable'' 
provisions of State law.

    Workers asked to return to work, particularly in the early phases 
of reopening, are especially at risk. Jobs such as meat packing, 
hairdressing, retail, home care, and food service are poorly paid and 
are filled disproportionately by workers of color. Underpaid workers 
are far less likely to have access to counsel to advise them of their 
right to refuse unsuitable work. What will likely happen is that 
employers will flag these workers as refusing suitable work, and those 
workers will then bear the burden of proving that the work they refused 
was unsafe, which is a huge burden and will keep them from getting 
benefits while the dispute is litigated. Either Congress or the DOL 
must make clear that unsafe work is not suitable work.
   congress must reauthorize the pandemic unemployment compensation 
     program in response to the exponential growth in unemployment
    The Pandemic Unemployment Compensation (PUC) program, which 
temporarily provides an additional $600 weekly to qualified unemployed 
workers, is an essential benefit in this moment, as it attempts to make 
up for the fact that UI benefits only replace approximately 40 percent 
of wages.

    Efforts to undo PUC fail to acknowledge the reality that working 
people and communities are facing and what is really going on in our 
economy. PUC is also critically important to many self-employed workers 
who were struggling to make ends meet but can now comfortably work on 
plans to re-open their businesses when the health crisis passes.

    At the same time, we should be asking why underpaid workers--who 
will hopefully be making closer to or perhaps even above their regular 
wages, allowing for greater economic stability in these uncertain 
times--are being expected to work for so little compensation in the 
first place. Wages and unemployment benefits have stagnated for 
decades. Many workers cannot live on the wages they are making, much 
less on an unemployment benefit that is a small fraction of their 
regular wages. This is particularly true for women of color. While the 
overall gender wage gap means that for every dollar a white man makes, 
a woman makes 82 cents,\10\ when disaggregated by race, Black women 
earn 63 cents, Latinx women earn 54 cents, Native Hawaiian and Pacific 
Islander women earn 65 cents, and American Indian and Alaskan Native 
women earn 59 cents.\11\ Black men earn 73 cents and Latinx men earn 69 
cents to the dollar of white men.\12\
---------------------------------------------------------------------------
    \10\ National Women's Law Project, ``Quantifying America's Gender 
Wage Gap by Race/
Ethnicity,'' March 2020.
    \11\ Dominique Derbigny, ``On the Margins: Economic Security for 
Women of Color Through the Coronavirus Crisis and Beyond,'' Closing the 
Women's Wealth Gap, April 2020, https://womenswealthgap.org/wp-content/
uploads/2020/04/OnTheMargins_April2020_CWWG.pdf.
    \12\ Pew Research Center, ``Racial, gender wage gaps persist in 
U.S. despite some progress,'' July 1, 2016, https://
www.pewresearch.org/fact-tank/2016/07/01/racial-gender-wage-gaps-
persist-in-u-s-despite-some-progress/.

    Right now, the Federal Government should be focused on ensuring 
that workers can survive this crisis and that the economy gets the 
maximum boost possible with the consumer buying power generated from 
the PUC benefits. Congress must ensure that workers are able to 
maintain an adequate income while they have no jobs because of public-
health-necessitated shutdowns, and the unavoidably slow return to a 
normal economy. We must also recognize that there are certain 
industries, such as those involving large crowds like sporting events 
and live performing arts, that are not going to be able to safely 
---------------------------------------------------------------------------
``reopen'' anytime soon.

    Indeed, in May, the official unemployment rate surpassed 13 
percent, which is higher than the peak unemployment rate reached during 
the Great Recession. This number represents job loss up to the middle 
of last month, and we have seen millions of new initial claims flow in 
since that time. By pulling the plug on the PUC program, which will 
impact an estimated 10 million workers and self-employed business 
owners, the economy will suffer a massive economic hit of over $17.9 
billion dollars per week if insured claims hold at mid-May levels.

    The PUC benefit boost is also necessary, in large part, because so 
many States have lowered their unemployment insurance benefit levels to 
the point where they cannot effectively aid workers and provide counter 
cyclical stabilization during a recession or other crisis. For example, 
the average weekly unemployment benefits in the U.S. is just $340 a 
week, which replaces only 44 percent of the average worker's weekly 
wage. In many States, the ``replacement rate'' is 25 percent or lower. 
As NELP has reported repeatedly, the real problem is that too many 
workers who qualify for benefits cannot access them.\13\ As we have 
seen across the country, filing for unemployment insurance can be 
arduous.
---------------------------------------------------------------------------
    \13\ Claire McKenna and Irene Tung, ``Occupational Wage Declines 
Since the Great Recession: Low-wage Occupations See Largest Real Wage 
Declines,'' National Employment Law Project, September 2, 2015.

    As workers in low-wage jobs are facing mounting bills as a result 
of the COVID crisis, including back rent and other major expenses, the 
increased income provided by PUC is often all that separates workers 
and their families from homelessness.\14\ When workers are standing in 
line for paper applications for unemployment insurance,\15\ spending 
hours on hold while trying to apply over the phone,\16\ or when 
computer systems continue to crash,\17\ it's crucial that Congress and 
State governments focus on making sure everyone who lost work can get 
their benefits, rather than anti-worker fallacies about people 
``refusing to work.''
---------------------------------------------------------------------------
    \14\ Dima Williams, ``The End of the Extra $600 Weekly Unemployment 
Benefits Threatens Rent Payments,'' Forbes, June 1, 2020.
    \15\ Tami Luhby, ``Floridians line up to get paper unemployment 
benefits forms,'' CNN, April 8, 2020, https://www.cnn.com/2020/04/07/
politics/florida-unemployment-benefits-covid/index.
html.
    \16\ Tamara Chuang, ``Only 6 percent of calls to Colorado's 
unemployment line are getting answered. But changes are on the 
horizon,'' Colorado Sun, May 28, 2020, https://coloradosun.com/2020/05/
28/colorado-unemployment-calls-holds-wait-callbacks/.
    \17\ Jim Zarroli, ``Unemployment Websites Are Crashing Across the 
Country,'' National Public Radio, March 18, 2020, https://www.npr.org/
2020/03/18/817950024/unemployment-websites-are-crashing-across-the-
country.

    PUC is a lifeline and does not create a disincentive to work. As 
discussed above, under every State unemployment insurance law in the 
country, a person who refuses suitable work will be found ineligible 
for benefits. There are some situations that can be regarded as good 
cause to leave a job for personal reasons, such as escaping domestic 
violence, or for work-related reasons, such as preserving worker health 
and safety--but the prospect of a higher unemployment benefit is not 
---------------------------------------------------------------------------
one of those good causes.

    Additionally, several guidance letters issued by ETA have made it 
clear that refusing work to receive unemployment benefits can be fraud. 
Workers are informed before applying that they cannot claim benefits 
for which they do not qualify and if they do, they will need to pay 
them back, and may even face steep financial penalties.

    Moreover, we should not overlook how critical it is for workers to 
maintain their connection to a job right now. For so many people, there 
is more to a job than the paycheck. In these uncertain times, workers 
are seeking stability, and the reassurance of continued work is 
something that more and more workers can no longer count on. Their jobs 
may be the source of health-care benefits, retirement security, and 
possibly equity in the company. Workers are also well aware of how 
resume gaps can harm long-term job prospects, even in this era.

    Finally, we need to note that re-employment bonuses are not the 
answer. They are based on the premise that workers are not looking hard 
enough for work. The reality is that there is a positive correlation 
between duration of unemployment and finding a suitable replacement job 
that workers remain at longer.\18\ Workers and employers benefit from 
having an unemployment system that is designed to get workers back to 
the right job, and not just any job.
---------------------------------------------------------------------------
    \18\ Marco Caliendo, Konstantinos Tatsiramos, and Arne Uhlendorff, 
``Benefit Duration, Unemployment Duration and Job Match Quality: A 
Regression-Discontinuity Approach,'' Forschungsinstitut zur Zukunft der 
Arbeit Institute for the Study of Labor, December 2009.

    While some policymakers expect that most workers will be asked to 
return to the same job that they had before, the longer this pandemic 
and the recession continue, the less likely it is that workers' 
previous jobs will exist. Moreover, vast swaths of industries may never 
return to normal, like travel, gyms, restaurants, sporting events, and 
music.\19\ That will also impact all the industries that feed them. We 
may be looking at a massive economic restructuring, the answer for 
which should be access to better job training to ensure good job 
matching, rather than bonuses to encourage workers to take a less 
suitable replacement job.
---------------------------------------------------------------------------
    \19\ Jack Kelly, ``The Coronavirus Effect: Here Are the Jobs That 
Will Be Added and Lost,'' Forbes, March 19, 2020, https://
www.forbes.com/sites/jackkelly/2020/03/19/the-coronavirus-effect-here-
are-the-jobs-that-will-be-added-and-lost/#267016782a1c.

    Policymakers need to learn the lesson of the last Great Recession, 
from which many individuals, families, and communities never recovered. 
The response to the last recession did not inject enough money and was 
not sustained enough to ensure that individuals and communities could 
---------------------------------------------------------------------------
fully recover from the economic devastation.

    This reality also underscores the ways systemic racism impacts 
which communities Federal and State governments invest in--during times 
of crisis and always. Cities like Detroit and Flint were unable to 
recover from the last recession and still have astronomical 
unemployment rates, and the Black unemployment rates in those cities is 
17.4 percent and 25 percent, respectively.\20\ When unemployment 
reached 14.7 percent for the broader population in April, it was 
rightly viewed as a national emergency, but there are communities for 
whom that number is a persistent reality.
---------------------------------------------------------------------------
    \20\ Andre M. Perry, ``Black Workers Are Being Left Behind by Full 
Employment,'' The Brookings Institution, June 16, 2019.

    The families and communities that were most harmed in the last 
recession, unsurprisingly, were disproportionately people of color and 
women--who already were dealing with generational racial wealth gaps 
and gender wage gaps. Today, we are in an economic crisis, with workers 
in a worse place economically than before. No community, least of all 
Black communities and other communities of color, can afford for 
---------------------------------------------------------------------------
policymakers to aim low in terms of emergency aid.

    Any argument being made that is not focused on ensuring all workers 
have the income needed to survive in this moment is ignoring a very 
important truth: Ensuring people have economic security is the answer 
to economic stability in good times, and to recovery after times of 
crisis. After all, the economy is not an entity unto itself, but 
rather, is the direct result of the economic strength and security of 
the people who comprise it.
   expanding state work-sharing programs can help businesses reopen 
   responsibly, while ensuring workers' safety and economic security
    Amidst the tensions playing out between calls to reopen the economy 
and the need to ensure workers are safe and healthy, we believe a 
program known as work-sharing holds tremendous promise as a solution 
that will benefit both workers and employers. With over 40 million 
workers already laid off and the underlying cause of our economic 
disruption likely not remedied for the foreseeable future, we need to 
reject all-or-nothing approaches to the question of economic recovery 
or individual worker health.

    Work-sharing programs (also known as short-time compensation) saved 
half a million jobs in the Great Recession, and in 2012, Congress 
enacted Federal legislation (the Layoff Prevention Act, sponsored by 
Senator Jack Reed) that provided incentives to States to enact work-
sharing as an alternative to layoffs. While work-
sharing was originally envisioned--and is still primarily used--as a 
voluntary layoff alternative when employers first face a temporary 
financial downturn, the program can also be a vital tool for businesses 
that have already laid off their workers but need to ramp back up 
slowly.

    Through work-sharing, employers who need to rebuild their 
operations gradually can spread the impact across the workforce by 
substituting the number of layoffs they would otherwise be imposing 
with an equivalent number of reduced work hours spread over a larger 
number of employees. So, for example, an employer that has already laid 
off all 20 employees but has only enough work to call back 10 could, 
instead of keeping 10 workers on layoff, bring back all 20 employees 
half-time. Under a work-sharing plan, all employees would receive half 
pay and a work-
sharing benefit that is equivalent to half a weekly UI payment (as well 
as any 
employer-provided fringe benefits). As business continues to pick up, 
hours could be increased across the workforce with corresponding 
increases in wages and decreases in work-sharing payments.\21\
---------------------------------------------------------------------------
    \21\ Catherine G. Abraham and Susan N. Houseman, ``Since Work Is 
Rare, It's Time to Share,'' Wall Street Journal, May 11, 2020.

    This kind of rebuilding approach brings tremendous advantages for 
workers and the economy. First, the sooner that workers and their 
employers reconnect, the greater the likelihood that workers will not 
suffer the economic harm that comes with long-term unemployment or 
having to start over with new employment. Second, businesses benefit by 
retaining trained employees, and if they can provide those employees 
enough financial security between wages and work-sharing benefits to 
keep them on board through tough times, they will come out stronger on 
the other side, when customers and demand for products and services 
fully return.\22\
---------------------------------------------------------------------------
    \22\ George Wentworth, Claire McKenna, and Lynn Minick, ``Lessons 
Learned: Maximizing the Potential of Work Sharing in the United 
States,'' National Employment Law Project, October 2014.

    Third, we are looking at an economy that will not be able to 
sustain the levels of employment that it did pre-COVID for a long time. 
Sharing the available work over the workforce in the short-term is a 
common-sense solution that will benefit all of us in the long run. 
Companies that have used work-sharing through down times routinely talk 
---------------------------------------------------------------------------
of its positive impact on employee morale.

    Through the CARES Act, Congress has already acted to renew 
incentives and provide funding to States to improve and promote work-
sharing, but more needs to be done. Only 27 States have activework-
sharing laws today, and it is time to ensure that that this voluntary 
program is offered as an option to employers in every State.

    In the wake of an economic tsunami that has left one in four 
workers in the U.S. unemployed virtually overnight, we need to update 
work-sharing law to streamline its usage by employers struggling to 
find their footing as they come back online. Businesses should be able 
to access the program quickly, and program rules should provide 
employers with maximum flexibility in deploying hours reductions in 
lieu of layoffs. Continuing Federal reimbursement of work-sharing 
benefits beyond the end of this calendar year will be vital to bringing 
new businesses to the program.

    Finally, more needs to be done to promote work-sharing usage by 
State and local governments and nonprofits. As the next wave of 
financial battering comes in the form of State and local budget cuts, 
government and nonprofit jobs can be preserved through strategic hours 
reductions using work-sharing.
   unemployment benefits are making a profoundly positive impact on 
              workers and families throughout the country
    Though we have heard so much in the news about the administrative 
struggles to get PUA and PUC up and running, it's important to 
highlight that these programs have already provided an essential life 
line for millions of workers and their families across the country. 
These benefits have prevented families from making untenable choices 
such as going without healthy and adequate food and necessary 
medications, or not paying utility bills, mortgages, rent, and health 
insurance premiums. In a time of such anxiety and uncertainty, these 
benefits have given people a measure of economic security, allaying at 
least some of their fears.

    Additionally, these benefits have allowed people to keep spending 
money in their local grocery stores, to perhaps support local 
restaurants with take-out orders, and to keep contributing to the 
economies of their communities. As demonstrated in the table below, 
should Congress fail to reauthorize PUC, an estimated $17 billion per 
week will disappear from families, which means it disappears from our 
economy as well. Even as we slowly reopen businesses, the withdrawal of 
this important source of income support will dramatically hinder 
recovery for individuals, communities, and the economy overall, making 
the scaling up of businesses lower under the best of circumstances, and 
likely impossible for far too many.

    Below is a sampling of stories from people throughout the country 
who are surviving because of the combination of UI or PUA and the PUC 
benefit. NELP thanks MomsRising, UNITE HERE Local 355, the United 
Steelworkers, Actor's Equity, SAG-AFTRA, the American Guild of Musical 
Artists, Business for a Fair Minimum Wage, International Alliance of 
Theatrical Stage Employees, the Department of Professional Employees, 
UNITE HERE Local 355, Make the Road New York, Make the Road Nevada, 
Ohio Organizing Collaborative, Step Up Louisiana, and One Pennsylvania 
for sharing these first-hand accounts with us, and we thank these 
workers for allowing their stories to become part of the official 
record in today's hearing. Though the implementation of PUA and PUC was 
troubled, to say the least, now that all the States have the programs 
up and running, this is truly the best way to make sure we get money 
into the hands of people and families who desperately need it.

        Carlos worked as a bartender at Miami International Airport 
for 6 years and was laid off during the current COVID-19 pandemic. As a 
single father to a 4-year old daughter, caring for his parents and two 
chronically ill dogs, Carlos's monthly bills exceed $1,300. For Carlos, 
``$600 a week is necessary.'' He shares, ``I worked 6 years without 
stopping, without taking a day off. I think I at least deserve to be 
able to maintain my family during this time of crisis. He adds, ``We 
fought hard to receive Florida's unemployment benefits and we're still 
fighting. So many of my coworkers haven't received any unemployment 
checks from Governor DeSantis. This Federal aid is the only income many 
families have.''

        Ricardo worked as a bellman at Florida's famed Fontainebleau 
Hotel for 8.5 years before being laid off in March. This June, he will 
lose his health insurance. For Ricardo, who is diabetic, ``$600 is 
necessary for me to survive, including being able to pay for my 
medications.'' He shares, ``I have been paying my taxes since I was 14 
years old. I have been working for decades. I've never collected 
unemployment. And this is a time we need the government to step up and 
do their job. I can't think of any other State that's put citizens 
through what Governor DeSantis has done to us here in Florida. This 
money is not a luxury, it's a necessity.''

        Karen worked as a Player's Club representative at Gulf stream 
Park Racing and Casino in Florida for 9 years before being laid off 
during the current COVID-19 pandemic. Karen is a single mother to a 9-
year old daughter. Karen needs to continue to receive $600 in Federal 
unemployment to keep paying her bills. She said, ``My fear is that me 
and my daughter will end up homeless without this Federal aid. I waited 
over a month to receive Florida's unemployment and honestly $275 a week 
is just not enough. This Federal aid is important to help us for all we 
do as taxpayers.''

        Angie from Missouri writes that ``I am living on unemployment 
so for now I'm okay. I work for the school system as a classified 
employee. We are paid hourly. I don't know when or if I'm going to go 
back to work. My passion is working with kids but my future is 
uncertain. After the $600 a week pandemic relief expires in July, I 
will begetting $141.00 per week. I can't live on that. I have a special 
needs son and it isn't easy on a good day.''

        Zinnia from Florida tells us that ``My family and I were 
greatly impacted during the pandemic. We were left without jobs, no 
income and unfortunately, I had to wait 2 months before I could receive 
any unemployment benefits due to all the issues Florida had with their 
system and processing claims. I'm finally receiving the benefits, but 
I'm not out of the woods yet. Due to the long wait, I had to borrow 
money for rent and am so behind on bills. I can only pray that the 
benefits be extended until we can all get back on our feet. I have a 
compromised immune system and honestly too afraid of exposing myself 
too soon to the public.''

        Beverly from California reports that ``When I was laid off 
from my job due to COVID-19, as a single mother I was petrified. The 
added $600 in unemployment benefits has been a lifeline, the difference 
between keeping a roof over our heads and homelessness. With no end in 
sight of this pandemic, we need the expansion of unemployment benefits 
to make sure no one gets left behind in this situation we had no 
control over.''

        Dawn writes that ``[a]s a North Carolina worker I currently 
receive the lowest rate of weekly unemployment benefits in the country. 
Which is less than $200.00 per week in State unemployment benefits. Due 
to the cost of living my rent payment is $875.00 plus additional fees 
for sewer, trash, and water. After paying the rent my expenses are: an 
electric bill, Internet bill, phone bill, auto and renters insurance, a 
car payment, and purchasing food. Without the receipt of the additional 
weekly Pandemic Unemployment Insurance benefit some of my services 
would be cut off. After the NC legislators cut the unemployment 
benefits we could receive in 2016 I was only eligible for $25.00 per 
week in unemployment benefits which not even a child could make ends 
meet on a payment that low.''

        Peggy from Michigan: ``Unemployment insurance has allowed me 
to pay my bills and feed my family. I have not been able to work 
because I am a parent monitor, which means that I monitor parental 
interaction with their children under supervised visitation by order of 
the court system. We are not set up to have parental visits at this 
time. Thank you for allowing me the ability to maintain an important 
part of my life.''

        Korry from Michigan is a U.S. veteran who lives with his wife, 
and their five children. He met his wife at Panera, where they both 
worked, but they have been laid since shortly after the stay-at-home 
order came out. Korry is collecting unemployment while he stays home to 
take care of the kids, but his wife, who is pregnant, got another job 
at Amazon to support them rather than collect unemployment. Without the 
current $600 per week, Korry would be getting less than $300 per week 
based on his prior earnings with Panera. Normal State weekly benefits 
even when combined with Brittni's salary would not be enough to support 
their family of nearly 8. The $600 per week makes it possible for Korry 
to be the children's caretakers. The daycare they used to rely on is no 
longer operating during COVID-19 and the only family nearby are their 
great-grandparents, both of whom are elderly and would not be able to 
watch five children under 10.

        Stephanie from Michigan and her husband have two children, 
ages 5 and 3. He works from home as an IT specialist for the University 
of Michigan. But Stephanie ran a home daycare where she took care of 
children for 8 other families. Because of COVID-19, she was forced to 
shut down her daycare entirely and is grateful for PUA because she does 
not qualify for UI as she is self-employed. Michigan has a low maximum 
weekly benefit so without the additional $600 in unemployment benefits, 
her family would have already depleted their liquid savings and would 
have to borrow from retirement savings and family members to make ends 
meet. Stephanie and her husband use the $600 not just to stay afloat, 
but to donate to local charities caring for people in need and to 
support local businesses such as grocery stores and restaurants doing 
take-out and delivery service so they can help keep their local economy 
afloat.

        Casey from Michigan is a bartender for a local craft cocktail 
bar and was in the first wave of people to lose their jobs due to the 
COVID-19 shutdown. His last day of work was March 16th. Because he was 
early to start receiving benefits, Casey did not receive the additional 
$600 for the first two weeks of his unemployment. When he took account 
of his finances after receiving the first check, he realized that even 
with his partner still working that he would have to deplete his 
savings for them to get by without her shouldering most of the burden. 
When he received his first check with the additional $600, he remembers 
breathing a huge sigh of relief. His mental State went from crisis 
management mode to a feeling of stability, since the $600 brought him 
much closer to what he was making at work. The additional $600 has also 
allowed him to support local businesses that are still open. Casey says 
he would love to go back to work since he really enjoys the small, 
locally owned bar that he works for and he's worried that they are 
hurting. Whether or not he was receiving the $600, Casey says he would 
go back to work. For him, the most important factor in his decision to 
go back is whether the bar can reopen safely for its workers and its 
customers.

        Jennifer from New York: ``My husband and I are both unionized 
workers in the Broadway theatre; I work on stage as a member of Actors' 
Equity Association, and he works backstage as a proud IATSE member. 
Like many who work in the arts, we book jobs months, sometimes years in 
advance to manage our income and ensure we maintain health care. When 
the pandemic forced theaters to close, within 24 hours we both lost not 
only all our current income, but also close to $110,000 in income we 
were counting on for the rest of the year. There is no end in sight 
right now. All of us working in the live arts will be the last to go 
back to work. We are also the parents of a 19-month-old son, for whom I 
am the primary provider of childcare. Rents are high. Diapers are 
expensive. Utility bills are creeping up. Our mobile phones and 
Internet costs are even more necessary as we search for new jobs and, 
in my husband's case, train for a career change. Without an extension 
of the emergency benefits, we will be forced to give up our apartment 
and move in with my parents, but even that is an expensive, complicated 
solution. Due to my parents' health conditions, we will need to spend 2 
weeks in quarantine at a hotel before we can safely join them. And when 
Broadway does eventually reopen, we will not be in the city to return 
to work. PUC is the only thing keeping our heads above water now. We 
are doing everything we can to weather this storm: staying home, not 
visiting grandparents, exploring new careers and taking free online 
courses. It's not enough.''

        Ben from California is and actor with a wife, a 10-year-old 
son and 2 dogs, both of whom have medical conditions which can be 
expensive from time to time. He earns most of his income from self-
employment, but because of residuals that he earns from past work, he 
has just enough income to qualify for a low UI benefit, rather than a 
more robust PUA benefit. ``While my wife continues to work at home 
(thank God!), making her salary and keeping our health benefits, her 
monthly income covers about half of our monthly expenses (which include 
a mortgage, various insurances, utilities, food, etc). So until I get 
consistent UI every 2 weeks, we are dipping into our savings to pay for 
life's necessities. We also have had to curb a number of expenses and 
lifestyle habits . . . not donating to charitable causes, not ordering 
from restaurants more than 2 a month, changing our cable subscription 
to a basic plan, finding and using coupons for grocery store trips, and 
probably the hardest one . . . keeping the AC off as much as possible 
despite hot temps. So yeah, it hasn't been easy. If the $600/week 
disappears before I regain employment, we will undoubtedly be forced to 
make some additional really difficult financial decisions about what 
else we'll need to cut--and possibly have to move out of town where the 
mortgages wouldn't be as high. Bottom line is that it's just insane 
that physical work I did 3-15 years ago is preventing me from receiving 
the full financial assistance Congress intended me to receive right now 
via the PUA.''

        Bonnie from California is an actor who, before the pandemic, 
made a comfortable living a year, earning about $200,000 per year. But 
all the work she had lined up for this year ceased and filming may not 
resume for a long time. She applied for benefits and though the vast 
majority of her income is not earned as an employee, she made just 
enough in recent years as an employee that she was awarded $65 per week 
in UI, rather than the weekly maximum of $450 per week. Though she 
wants Congress to remedy the penalty that mixed-income earners are 
facing, she also writes that ``I am grateful indeed for the $600 the 
government is adding to my $65.00 U.I. compensation because it is 
crucial to my getting by right now. I don't know what would happen were 
that to disappear at the end of July! Even with that weekly amount, I 
am running up a serious credit card bill. The entire film industry is 
shut down . . . with everything being pushed until `early next year' at 
the soonest. There will be no work for some time. We really need some 
help here.''

        John, who runs a chiropractic practice in Virginia tells us 
that ``Unemployment benefits, especially the $600 per week, helped keep 
my family afloat and out of debt while I had to close down my practice. 
As someone who has contributed to the Federal Government for years, it 
was nice to know that the Federal Government was there for me when I 
needed help.''

        Axel lives in Queens, NY: ``I am one of those fortunate enough 
to receive unemployment benefits during this pandemic. Right now, I 
receive $979 in weekly benefits, $600 of which is Pandemic Unemployment 
Compensation (PUC). All of it goes towards covering only the most basic 
necessities for me and my family: our rent, which is $1,500 per month, 
utility bills, food, medical costs, and transportation. Everyone in my 
family has fallen ill to COVID-19--my brother is still struggling to 
recover--and this has caused significant psychological and emotional 
stress on top of the financial stress I feel to make ends meet. I had 
an emergency operation at the beginning of the pandemic, and I am 
terrified that I will be unable to pay for medical care should 
something else happen to me in the months to come. Without the extra 
$600 in PUC, life in New York would be impossible. Even with benefits, 
we must rely on food pantries to keep us from going hungry. We must 
extend PUC benefits past July, because $379 is not enough.''

        Ahmad in Pennsylvania writes: ``On March 16th, I was laid off 
from my job as a line cook at a Philadelphia restaurant. I'm a 
community college student but I worked full-time at the restaurant. 
When I was working, I was able to help my parents pay for groceries and 
help my mom cover the costs of starting her new business. I also was 
trying to save up so that I could move out of my parents' place and 
afford a down payment on a house. Without the $600, my benefits would 
be very low--$219/per week. Because the restaurant industry in 
Philadelphia has been destroyed by this pandemic, I'm afraid I won't be 
able to find a job for a long time. If Congress cuts my benefits to 
$219 per week, it would really be hard for me to help out my family. 
I've been working so hard to build a better life for myself, but these 
cuts would send me back to square one.''

        Mary in Ohio: ``On March 13, 2020, I was laid off from my job 
as a substitute teacher and was not able to pay rent for 2 months. I 
struggled getting through to ODJFS through phone and email with no 
resolution for my specific issues. The extra weekly $600 is crucial to 
ensure that Ohioans can meet our financial needs. With the $600, I can 
pay my rent, put food on the table, and cover my other bills.''

        Cindy from Ohio is self-employed and is supporting herself on 
PUA and PUC: ``I'm a self-employed painter of 18 years finding myself 
as one out of the countless 1st-time filers for unemployment. My last 
day of work was March 14, 2020 and as a caretaker of my compromised 
parents, my imperative is to keep them safe. After Governor Mike 
DeWine's request to stay at home, I waited 10 weeks for the PUA system 
to be ``built'' with no income! After FINALLY receiving the $600 
addition in weekly ``back pay'' (which is less than my normal income), 
I can make sure my overdue mortgage can be brought close to current, 
that my taxes that are due in July will get paid, and that several 
other bills will get partially paid. That $600 is security that I need 
while trying to move forward into an unknown workscape. Due to the 
public health crisis, my projected work is about 30 percent of what is 
normal for the last 3 months! I HAVE to protect my parents' health 
first. But without the continued $600 benefit, we are being forced to 
choose between our health, the health of our loved ones, or our jobs, 
when we did not choose this path! This is unacceptable and beyond 
cruel. I'm certain none of our public officials would choose to walk in 
our shoes, but I hope they can imagine being in them!''

        Katie from Ohio: ``I work in education and am only getting 
$340 every 2 weeks. Since I am not able to pay all my bills with this 
amount, I am being reported to the credit bureau and my credit score 
has dropped significantly. I was told by my employer that due to the 
pandemic they're making cuts and that I will not have a job when/if 
school opens in the Fall. I have MS (multiple sclerosis), so for my 
personal health and my family's safety, I am currently looking for a 
remote position. I have applied to 15 job openings, but I have yet to 
receive any interviews. Ohio's unemployment system has failed to 
provide livable unemployment relief and I am struggling with paying 
bills. My family and I need assistance, and that extra $600 a week 
would allow me to pay my car, mortgage, medical and other bills. Please 
expand PUA and extend the $600 a week past July 2020.''

        Brittany from Louisiana: ``The recent payments of unemployment 
have been a great help to my finances. I recently bought a car, and 
between that, food, and providing for my son, the additional $600 from 
the CARES Act has really helped me out. We need to extend these 
benefits and start paying people real wages.''

        Jason from Nevada: ``Receiving the $600 has helped me keep all 
my bills up to date. Otherwise, I would miss payments and then would 
have to pay late fees. I would go further into debt like so many people 
I know during this pandemic. These benefits have taken the place of 
what I would have gotten if I was still working at the job I had before 
this pandemic. Without them, I would not be able to keep up.''

        Samantha from Nevada: ``I've been working for MGM Resorts 
since 2017 and as a union worker, I always felt secure in my workplace. 
Before the pandemic, I transferred to the MGM Resort Pool and 
unfortunately was laid off before I could even have my first day of 
work. I had enough money saved up to pay my upcoming bills but not 
enough to last me through the months to come. Thankfully with the help 
from unemployment benefits, I've had a weight lifted off my shoulders 
from the stress of not knowing how I was going to pay my next car 
payment, rent, and my other monthly bills. I've been able to live with 
my family with one less thing to worry about through these hard times. 
I strongly believe we need to keep unemployment benefits because I 
don't know how long it will be until resort pools will open back up to 
the public again. Not having that income would affect me drastically.''

        Joe from Pennsylvania: ``Our company closed due to the 
Coronavirus. We had 65 people working, most between the ages of 30 and 
63 years, who are now on unemployment. One of my coworkers has prostate 
cancer and, like the rest of us, he'll be losing his medical insurance 
come July 1st. A lot of us are in our 50s and are not yet able to go on 
social security, but we still have car payments, mortgage payments, and 
utility bills on top of paying for our family's medication and food. 
It's tough to get a new job when you're in your late 50s and 60s, 
especially in this environment. This is why it is essential for the 
benefits to continue a bit longer. We need these additional 
unemployment benefits to help our families pay for necessities while we 
look for work.''

        Jared from Pennsylvania: ``I worked at my company for about 1 
year before COVID-19 hit and we were forced to leave our positions. 
While unemployment compensation from the State is helpful during this 
time of joblessness, it's not enough to cover living expenses, and the 
additional $600 per pay period for unemployment is necessary because 
our company has shut off our medical insurance. It's stressful to think 
about how I would be able to cover hospital expenses or prescription 
medications if I'm only receiving the State unemployment compensation. 
The $600 makes scenarios like this a little more manageable. I [also] 
have close family members who are greatly affected by this and already 
have severe medical conditions that require expensive medicines 
previously covered by health insurance offered by their employer. The 
loss of the $600 would mean that their prescriptions cannot be 
purchased because they are too costly. I ask that the additional $600 
per pay period be extended for people on unemployment compensation 
until the end of this year. Not only will this provide additional funds 
to cover utility bills and medical insurance, it will give me time to 
find another job should our company shut down business permanently and 
not be able to offer employment.''

        Justin from Florida: ``I'm a stagehand technician/rigger and 
proud member of I.A.T.S.E. Local 647 of this month, and I've been a 
stagehand technician since I was 22 years old. Last October, for the 
first time in my life, I was able to get a mortgage and purchase my 
very own home. Then COVID-19 appeared. I was immediately told to stay 
home, with no means to pay my bills or put food on the table. To make 
matters worse, I live in Florida, where the unemployment program pays 
so little for such a short period of time, it could be construed as a 
joke. I now have a mortgage to worry about and am afraid I'll lose this 
house as fast as I got it. And the real cherry on top is that with no 
end insight regarding COVID itself, I don't know when I'll be able to 
return to work. I'm not sure our industry will ever truly recover from 
this. Even with a vaccine, so many Americans are so fearful of 
coronavirus and mass gatherings that I just don't see the ticket sales 
being high enough to support a show staying out on tour. We were the 
first industry to be laid off, and we'll be the last to return. We have 
been absolutely devastated. It is my hope that Congress may understand 
just how unique and urgent our situation is and come to our aid by 
extending the Cares Act $600 per week. To be clear, and I feel I can 
speak for most of us in the entertainment industry, where most folks 
deign to work, we actually dream to work. I don't want to have to rely 
on Federal assistance to scrape by. I want my job back. I love my job, 
and I wouldn't trade it for anything in the world. I thank you for your 
time.''

        Victoria from Virginia is a sole proprietor of a hair salon. 
She has been receiving the CARES Act unemployment insurance benefits 
and hopes the benefits extended not just for herself so she can 
maintain her business, but for her community and customers. As she 
contemplates reopening her salon, she knows that she can only make a 
living if her clients have money to spend. ``I get the bulk of my 
bookings around major events and windfalls--weddings, proms, 
graduations, job interviews, church events. Those are the hard-earned 
special treatments, the ones that often require months of saving and 
compromises on food or utilities. On the flipside are the windfalls. 
The most exciting time of year is tax refund time, when people come and 
get their hair done because they received their tax refunds.''

        Sarah, a musician in New Jersey: ``Our industry was among the 
first to lose work and will certainly be among the last to return to 
work. The expansion of the extended benefits program beyond July 31st 
will be essential to my financial well-being. The additional $600 per 
week is the difference between paying the rent or not paying the rent. 
Full stop.''

        James, a musician in California: ``Simply put, unemployment 
insurance with added PUA financial assistance has kept my household 
afloat. Without this assistance I would have to seriously consider 
abandoning the profession.''

        Sara, a musician in New York: ``The stress of this 
uncertainty, and the precarious financial situation we find ourselves 
in, is amplified by a reality that will come to pass in October: the 
birth of our first child, a daughter. The PUA has been absolutely 
essential to our well-being since I first went on unemployment in 
April. PUA has helped us remain solvent and provided means for us to 
cover the essentials, like nourishing food for my pregnancy. The 
continuity or disappearance of the PUA $600 per week will single-
handedly determine our future.''

        Maria, a musician in New York: ``As a single mother of two, I 
am so grateful that losing my job as a result of COVID-19 has not 
jeopardized my children's stable home or dinner table. Without the PUA 
I would not be able to pay my rent. I would be forced to choose between 
buying food and paying the electricity.''

        Laureen, a musician in Illinois: ``My husband is in the severe 
stage of early-onset dementia at the young age of 58. I am paying $210 
a day for 24/7 live-in care for my husband. It is alarming and 
stressful to have a lifetime of savings get spent so quickly. I truly 
need the help of the $600 PUA to continue.''

        Melanie, a musician in Massachusetts: ``My immune system is 
compromised, so I am unable to easily find work. Receiving unemployment 
insurance has literally saved my life. If I no longer received that 
amount, I would no longer be able to afford rent, let alone groceries, 
or pay my bills.''

        Anne, a musician in New York: ``As the mother of a prematurely 
born baby girl, I have had tremendous hurdles in providing for her. The 
CARES Act has made it possible for me to continue to pay bills . . . 
health care and medicine, food, diapers, infant supplemental formula, 
and a slew of other non-negotiable necessities. It is the only thing 
keeping me afloat.''

        Jennifer, a musician from California: ``If not for PUA and 
PUC, I would have become homeless in April and I would have had to file 
for bankruptcy.''

        Michael, a musician from Oregon: ``Our careers have been 
decimated. Most of us live in large cities where classical music 
thrives and our rents and monthly expenses are extremely high. Some of 
us have already had to leave our homes as the costs have been 
prohibitive. Without the help of PUA, many of us would not be able to 
pay our bills. Thank you so much for the additional $600/month and I 
implore you to extend the pandemic unemployment insurance past the end 
of July. Without your help our industry faces possible ruin.''
                        how do we move forward?
    This crisis has laid bare the shortcomings and opportunities for 
action to improve our Nation's unemployment insurance system in so many 
ways. Workers who have very little waited in line for weeks for needed 
benefits. The inequality of access and benefit levels is obvious. That 
is why we must act now to change the system--we will never have a more 
important moment to get lasting and long-needed change. Crises expose 
our greatest weaknesses; if we ignore the moments when systemic flaws 
are laid bare, that is nothing short of political and policy failure. 
We must take advantage of the clear lessons we have learned about our 
UI system to establish a meaningful Federal floor, including adequate 
funding for States to upgrade their IT systems and handle the current 
flow of applications for unemployment benefits. If we fail to do so, 
States will face real pressure from employers to cut benefits when 
State trust funds run out, and our UI system will only be further 
decimated before the next crisis hits.

    First, in the short term, we need to establish a way to scale up 
and scale down benefits automatically as the economy calls for it, 
rather than rely on ad-hoc extensions that could come erratically, 
force States to continually reprogram their systems, and end too soon 
and too abruptly, thereby stranding families without necessary income 
support and damaging our country's economic recovery. Ranking Member 
Wyden has proposed a fact-based, rational way to scale benefits as 
health care and economic conditions call for it. Senators Reed and 
Bennet have also proposed a thoughtful approach to accomplish this as 
well. At a minimum, we must reauthorize the full PUC, PUA, and Pandemic 
Emergency Unemployment Compensation (PEUC) until the public health 
crisis ends and unemployment is back into the single digits, and 
authorize additional weeks of PUA and PEUC sufficient to meet the needs 
of unemployed workers and their families during what will likely be a 
drawn-out recovery from this pandemic and recession.

    As we look beyond just the temporary benefits we need so that we 
may improve the entire UI system, it is important to consider where the 
program does not provide equal and fair access to benefits. The Urban 
Institute found that during the last Great Recession, Black workers 
were on average 13 percent less likely than white workers to receive 
benefits, and Latinx workers were 4 percent less likely.\23\ Obviously, 
structural racism inherent in the occupational segregation in the U.S. 
plays a role in access to those benefits, but it is also clear that 
there were hurdles to benefit access disproportionately affecting 
workers of color back then that persist to this day.
---------------------------------------------------------------------------
    \23\ Austin Nichols and Margaret Simms, ``Racial and Ethnic 
Differences in Receipt of Unemployment Insurance Benefits During the 
Great Recession,'' Urban Institute, June 2012.

    The most obvious hurdle was the move by many States to reduce the 
maximum duration of benefits below 26 weeks in the aftermath of the 
Great Recession. Ten States cut duration of benefits. The most recent 
is Alabama--last June, it cut maximum duration to just 14 weeks. Three 
States cut maximums from 26 to 20 weeks--Michigan, Missouri, and South 
Carolina. Arkansas cut maximum benefit duration to 16 weeks. Florida, 
Georgia, North Carolina, Kansas, and Idaho have adopted sliding scales 
tied to State unemployment rates. Fortunately, four states--Idaho, 
Kansas, Georgia, and Michigan--have reversed course and restored 
benefits to 26 weeks of recipiency. Reducing duration is necessarily 
going to have a disparate impact on communities of color until other 
structural reforms are implemented to get people in affected 
communities back to work faster. As of the third quarter of 2019, 
during a period of record low unemployment, the average duration of an 
unemployment spell was 21 weeks. For white workers, a 20-week cutoff 
would not affect the average worker who remained unemployed for 19 
weeks. However, Black workers averaged 25.9 weeks in their unemployment 
period.\24\ A 26-week benefit period would completely cover average 
duration for Black workers; any duration reduction therefore 
statistically harms Black workers more.
---------------------------------------------------------------------------
    \24\ BLS Labor Force Statistics from the CPS, https://www.bls.gov/
web/empsit/cpsee_e18.htm.

    We also need to enact an important reform to the UI/PUA method of 
delivering benefits to unemployed workers. PUA is available only to 
workers who are not eligible for UI, whether by virtue of not earning 
enough income to qualify, being self-employed, or facing some other 
exclusion. Many workers, however, have sources of income both as an 
employee and as a self-employed worker. Far too many workers, including 
some featured above, earn most of their income through self-employment 
but earn just enough income as an employee that they receive a minimum 
or near-minimum State UI benefit. As a result, they are ineligible for 
PUA, and over the course of the 39 weeks of authorized benefits, they 
may stand to lose literally tens of thousands of dollars in benefits 
they desperately need, not just for their own financial support, but 
perhaps for the financial support of their businesses as well. This 
clearly unintended consequence is having a devastating effect on 
workers throughout the country. We are ready to work with Congress to 
enact a solution that provides workers with the relief to which they 
should be entitled, but also gives State UI agencies adequate time and 
---------------------------------------------------------------------------
resources to reprogram their IT systems to implement this fix.

    Because there is so much disparity across States and populations 
within those States, we are at a point where Congress should consider 
federalizing UI to operate similarly to Social Security. Short of that, 
NELP endorses Senator Bennet's plan for long-term reform.

    If States emerge from this recession with empty trust funds and 
having had to borrow money to pay benefits, there will likely be 
widespread efforts to cut benefit access and amounts going forward. Key 
components of effective long-term reform include the following:

        Minimum of 26 weeks of benefits.
        Benefits replace 60 percent of income for workers below the 
earnings limit.
        More workers should be eligible. Employers in the gig economy 
and low-paid educational contract employees like adjuncts and 
paraeducators should be able to access UI in every State.
        Permanent reform of Extended Benefits. During a recession, 
benefit weeks should automatically be extended as the unemployment rate 
increases.
        Every State should provide a dependent allowance for people 
who have children to care for.
        UI should be available to part-time workers in every State.
        Good cause to quit should be uniform across States, so workers 
fleeing domestic violence, following a spouse whose job has moved, or 
whose work jeopardizes their health and safety should be able to resign 
and get UI.
        Work-sharing should be universal and available in every State. 
Employers should have the option to spread layoffs across the work 
force and allow workers to get UI to cover their lost hours rather than 
completely laying off part of the workforce.
        Make the optional Alternate Base Period mandatory so workers 
with erratic schedules can maximize their benefits.


 
----------------------------------------------------------------------------------------------------------------
                    State                          IU          PUA         PEUC       Total      PUC Amount Paid
----------------------------------------------------------------------------------------------------------------
Alabama                                           190,205            0          0      190,205      $114,123,000
----------------------------------------------------------------------------------------------------------------
Alaska                                             48,000            0          0       48,000       $28,800,000
----------------------------------------------------------------------------------------------------------------
Arizona                                           217,968            0          0      217,968      $130,780,800
----------------------------------------------------------------------------------------------------------------
Arkansas                                          120,043            0      6,058      126,101       $75,660,600
----------------------------------------------------------------------------------------------------------------
California                                      2,155,310      699,745        324    2,855,379    $1,713,227,400
----------------------------------------------------------------------------------------------------------------
Colorado                                          265,499      101,510          0      367,009      $220,205,400
----------------------------------------------------------------------------------------------------------------
Connecticut                                       272,695       55,117          0      327,812      $196,687,200
----------------------------------------------------------------------------------------------------------------
Delaware                                           50,780            0      1,547       52,327       $31,396,200
----------------------------------------------------------------------------------------------------------------
District of Columbia                               70,103            0      1,104       71,207       $42,724,200
----------------------------------------------------------------------------------------------------------------
Florida                                           529,384            0          0      529,384      $317,630,400
----------------------------------------------------------------------------------------------------------------
Georgia                                           731,762            0          0      731,762      $439,057,200
----------------------------------------------------------------------------------------------------------------
Hawaii                                            127,921            0          0      127,921       $76,752,600
----------------------------------------------------------------------------------------------------------------
Idaho                                              56,692          633      1,774       59,099       $35,459,400
----------------------------------------------------------------------------------------------------------------
Illinois                                          762,367      373,443     28,873    1,164,683      $698,809,800
----------------------------------------------------------------------------------------------------------------
Indiana                                           253,536      285,913      9,097      548,546      $329,127,600
----------------------------------------------------------------------------------------------------------------
Iowa                                              178,619       17,545          0      196,164      $117,698,400
----------------------------------------------------------------------------------------------------------------
Kansas                                            104,553            0          0      104,553       $62,731,800
----------------------------------------------------------------------------------------------------------------
Kentucky                                          244,342            0          0      244,342      $146,605,200
----------------------------------------------------------------------------------------------------------------
Louisiana                                         328,409      174,070        304      502,783      $301,669,800
----------------------------------------------------------------------------------------------------------------
Maine                                             138,219      135,681         70      273,970      $164,382,000
----------------------------------------------------------------------------------------------------------------
Maryland                                          255,017      236,342      5,575      496,934      $298,160,400
----------------------------------------------------------------------------------------------------------------
Massachusetts                                     594,515    1,612,010          0    2,206,525    $1,323,915,000
----------------------------------------------------------------------------------------------------------------
Michigan                                          985,294    2,116,842     33,561    3,135,697    $1,881,418,200
----------------------------------------------------------------------------------------------------------------
Minnesota                                         416,668       73,411     13,405      503,484      $302,090,400
----------------------------------------------------------------------------------------------------------------
Mississippi                                       184,150            0          0      184,150      $110,490,000
----------------------------------------------------------------------------------------------------------------
Missouri                                          255,374       83,638      7,437      346,449      $207,869,400
----------------------------------------------------------------------------------------------------------------
Montana                                            49,917       53,390      1,612      104,919       $62,951,400
----------------------------------------------------------------------------------------------------------------
Nebraska                                           61,604       20,352         10       81,966       $49,179,600
----------------------------------------------------------------------------------------------------------------
Nevada                                            343,030      172,346      4,745      520,121      $312,072,600
----------------------------------------------------------------------------------------------------------------
New Hampshire                                     109,184            0          0      109,184       $65,510,400
----------------------------------------------------------------------------------------------------------------
New Jersey                                        586,532      547,887          0    1,134,419      $680,651,400
----------------------------------------------------------------------------------------------------------------
New Mexico                                        105,568       43,236      2,595      151,399       $90,839,400
----------------------------------------------------------------------------------------------------------------
New York                                        1,811,012    1,111,488     53,737    2,976,237    $1,785,742,200
----------------------------------------------------------------------------------------------------------------
North Carolina                                    564,068       72,422          0      636,490      $381,894,000
----------------------------------------------------------------------------------------------------------------
North Dakota                                       31,100        7,956      3,609       42,665       $25,599,000
----------------------------------------------------------------------------------------------------------------
Ohio                                              636,869      615,968     11,024    1,263,861      $758,316,600
----------------------------------------------------------------------------------------------------------------
Oklahoma                                          139,196            0      1,732      140,928       $84,556,800
----------------------------------------------------------------------------------------------------------------
Oregon                                            293,081            0          0      293,081      $175,848,600
----------------------------------------------------------------------------------------------------------------
Pennsylvania                                      907,252    1,010,651        531    1,918,434    $1,151,060,400
----------------------------------------------------------------------------------------------------------------
Puerto Rico                                       194,272      388,484      2,139      584,895      $350,937,000
----------------------------------------------------------------------------------------------------------------
Rhode Island                                       87,966       38,972          0      126,938       $76,162,800
----------------------------------------------------------------------------------------------------------------
South Carolina                                    241,793       88,160         48      330,001      $198,000,600
----------------------------------------------------------------------------------------------------------------
South Dakota                                       22,454        4,107        100       26,661       $15,996,600
----------------------------------------------------------------------------------------------------------------
Tennessee                                         327,768       81,439          0      409,207      $245,524,200
----------------------------------------------------------------------------------------------------------------
Texas                                           1,272,557      164,386      1,080    1,438,023      $862,813,800
----------------------------------------------------------------------------------------------------------------
Utah                                               82,054      111,038          0       93,092      1$55,855,200
----------------------------------------------------------------------------------------------------------------
Vermont                                            50,285            0          0       50,285       $30,171,000
----------------------------------------------------------------------------------------------------------------
Virginia                                          402,926      193,684     13,825      610,435      $366,261,000
----------------------------------------------------------------------------------------------------------------
Virgin Islands                                      4,354            0      3,776        8,130        $4,878,000
----------------------------------------------------------------------------------------------------------------
Washington                                        593,287      193,276          0      786,563      $471,937,800
----------------------------------------------------------------------------------------------------------------
West Virginia                                      93,086            0          0       93,086       $55,851,600
----------------------------------------------------------------------------------------------------------------
Wisconsin                                         291,677          567          0      292,244      $175,346,400
----------------------------------------------------------------------------------------------------------------
Wyoming                                            17,631        5,209          0       22,840       $13,704,000
----------------------------------------------------------------------------------------------------------------
    Total                                      18,857,948   10,790,918    209,692   29,858,558  $17,915,134,800
----------------------------------------------------------------------------------------------------------------
Source: Authors calculations, Department of Labor, Employment and Training Administration, Initial Claims
  Report.


[GRAPHICS NOT AVAILABLE IN TIFF FORMAT]
                                 ______
                                 
         Questions Submitted for the Record to Michele Evermore
                  Question Submitted by Hon. Ron Wyden
              workers with wage and self-employment income
    Question. Workers who are eligible for regular unemployment 
compensation cannot claim PUA. This has led to some workers who lost 
both wage income and self-employment income only being able to claim 
regular unemployment compensation even when their PUA benefit would be 
bigger. Can you explain the challenges this creates for workers and any 
possible solutions?

    Answer. The penalty being paid by many workers who earn what we 
call ``mixed-incomes,'' that is people who earn some wages as an 
employee and some in other forms including self-employment, is 
extensive and growing. In many industries, including the performing 
arts for example, people earn most of their income not as employees, 
but as independent contractors or otherwise self-employed people. They 
may earn a little money on the side as an employee, or may get an 
occasional artistic job as an employee, and therefore qualify for a 
minimum UI benefit which is some States can be as small as $5 per week. 
If they weren't eligible for that small UI benefit, they would qualify 
for a much higher PUA benefit, perhaps even a maximum benefit. 
Similarly, there are self-employed people all over the country, true 
entrepreneurs, who may hold part time jobs on the side to help make 
ends meet, especially while building a business, who also have the bulk 
of their income come from non-W-2 wages. In California alone, the State 
UI agency estimates that at least 100,000 people will face this 
penalty. In New York, the number grows to at least 150,000 people, 
likely more.

    It is no exaggeration to say over the course of this year alone, 
mixed-income earners would have received over $10,000 more in benefits 
had all their income been considered, or had they been able to receive 
PUA, than they will in UI. This is money they need for rent and 
mortgages, food and utilities, and health insurance premiums. This is 
not an inconsequential penalty and it isn't a penalty that can be 
solved simply by reauthorization of PUC because while PUC is designed 
to make up for the portion of W-2 wages that aren't replace by UI, it 
isn't al all making up for the wages that aren't replaced for mixed-
income earners.

    We understand that there are considerable administrative hurdles to 
implementing a fix for this problem. But that doesn't mean we shouldn't 
implement a fix. Congress could mandate that if an individual has mixed 
income and their weekly UI benefit is less than the minimum PUA benefit 
for the State, that they should be able to collect PUA and have all 
their income count toward the calculation of their benefit amount. 
Because this will require considerable administrative effort to 
implement, States should be given adequate time to reprogram their 
systems, perhaps 2 to 3 months. This will also help manage expectations 
from mixed-
income earners, but still let them know that relief is on the way.

                                 ______
                                 
             Questions Submitted by Hon. Benjamin L. Cardin
    Question. The CARES Act's Pandemic Unemployment Assistance (PUA) 
program expanded eligibility for unemployment benefits to new, 
previously excluded categories of workers.

    Are there any other categories of workers that are still excluded 
from benefits?

    Beyond the current crisis, how can Congress move to incentivize 
States to expand their unemployment insurance systems to include the 
workers covered by PUA and any other potential categories that are 
still excluded from State programs?

    Answer. Yes, other workers who are still excluded from Pandemic 
Unemployment Assistance and regular Unemployment Insurance include 
undocumented workers, workers who work outside the formal economy, and 
new entrants who did not have a bona fide job offer rescinded due to 
COVID-19, such as people just graduating high school or college or 
people re-entering the workforce after incarceration. To cover the last 
category of workers, I would strongly support the inclusion of a 
Jobseeker's Allowance in future stimulus measures.

    One of the most important ways that States should modify their 
programs to cover more workers would be to establish an inclusive 
definition of employer as California or Washington have in place to 
cover the increasing number of workers in the ``gig economy.'' There is 
precedent for Congress to incentivize UI system improvements in States, 
as the Unemployment Insurance Modernization Act passed in 2009 did just 
that--it provided States with economic incentives to establish laws to 
expand eligibility, such as adding part-time workers, adding good 
causes to quit, and establishing an Alternative Base Period so workers 
who could not establish earnings sufficient to qualify for unemployment 
benefits in the first four of the last 5 quarters of employment.

    NELP's research has also established that other barriers to access 
include States increasing the amount of money workers need to earn to 
qualify for unemployment insurance. Interestingly, the three States 
with the highest monetary eligibility requirements are also States with 
surprisingly high numbers of workers qualifying for PUA. Arizona, 
Michigan, and Ohio have the highest base period earnings requirements 
and respective continuing PUA claims of 1,416,134, 1,080,267, and 
815,459 for the week ending June 6th. Congress should set a lower 
maximum monetary eligibility requirement to deal with this.

    Question. Are there any changes to the current model of 
collaboration between the Federal and State governments that you think 
could improve the provision benefits?

    Answer. In the wake of this pandemic, with all of the inequalities 
in the system exposed, this is a good time to have a robust 
conversation about federalizing the program and administration thereof. 
Short of that, the Federal Government may need to take different 
approaches in different States. There are States that are working to be 
more creative in finding ways to make establishing eligibility easier, 
and in those cases, flexibility should be encouraged. On the other 
hand, the agency should work with States with lower than average 
recipiency to develop an improvement plan to improve access to 
benefits. The ETA should also report recipiency by county and with 
other demographic data such as race, so that we can better understand 
who is unable to access benefits and why.

    Question. What is your assessment of how the States have handled 
unemployment insurance?

    Answer. Last summer, I authored a brief discussing how States were 
unprepared to deal with a recession, called ``Are State Unemployment 
Systems Still Able to Counter Recessions?'' Looking at the States that 
have struggled to provide benefits, those States largely match up with 
those that I predicted to be unprepared. That is because benefit 
provision is a matter of political will. States that erected barriers 
to entry were caught unprepared to take on the massive amount of new 
claims during the pandemic. No State has perfectly handled this 
unprecedented crisis, but in States with claimant-friendly UI agencies, 
benefits did get to deserving workers faster. In a couple of States in 
which systems were in place that created challenges to claimants to 
access benefits, new administrations with a commitment to claimants 
were even able to wrestle the system into paying appropriate benefits--
Michigan and Maine are good examples of this.

    As a constituent and resident of the State of Maryland, I have been 
working with policymakers to improve the application process here. As 
you may know, Maryland's performance in paying benefits has been 
largely average, but advocates are looking to States like Rhode Island 
to share information about how to move roadblocks out of the system. 
More efforts to improve sharing these kinds of best practices across 
States would be helpful.

    Question. Could you please provide an overview of ways in which 
State unemployment insurance policies unnecessarily keep many people 
from receiving benefits?

    Answer. Ten States reduced the maximum benefit duration below 26 
weeks, which accounts for roughly one-quarter of the national decline 
in the percent of the unemployed collecting UI. The most recent is 
Alabama. Last June, it cut benefits to 14 weeks. Michigan, Missouri, 
and South Carolina cut maximums from 26 to 20 weeks. One State--
Arkansas--cut maximum benefit duration to 16 weeks. Florida, Georgia, 
North Carolina, Kansas, and Idaho have adopted sliding scales tied to 
State unemployment rates.

    Even after initially qualifying for benefits, the risk of 
disqualification for non-
compliance on a week-to-week basis has grown dramatically. More UI-
eligible workers than ever are being denied benefits because of 
stricter enforcement of a variety of ``continuing eligibility'' 
requirements, especially work search. The 10 States with the steepest 
increases in denials for non-separation reasons were South Carolina, 
New Mexico, Florida, Mississippi, Tennessee, Massachusetts, 
Pennsylvania, Michigan, Louisiana, and North Carolina. Five of these 10 
States launched new claim filing systems in the past 5 years (New 
Mexico, Florida, Tennessee, Massachusetts, and Michigan), a factor that 
may be driving increases in disqualifications for process reasons. 
While much attention has been paid to the antiquated COBOL systems that 
most States still rely on, it is important to remember that even in 
some States that have modernized their computer systems, the 
modernization effort came at a time that the State was seeking to limit 
access to benefits.

    States are imposing more onerous work search contacts and 
documentation requirements. The 10 States with the highest rates of 
disqualification for able, available, and work search issues are 
Alaska, South Carolina, North Dakota, Utah, Nebraska, Idaho, Florida, 
New Hampshire, Ohio, and Missouri. As could be expected, half of these 
States require four or five new employer contacts weekly, while nearly 
all of the harshest disqualifiers have moved to systems in which work 
search documentation is now required to be submitted as part of each 
weekly or bi-weekly certification.

    The focus on ``program integrity'' is both increasing denials and 
discouraging takeup. The majority of overpayments, incidentally, stem 
from two things: work search requirement violations (which can include 
making a mistake in reporting) and going back to work and not having 
asking the agency to stop UI payments the first week back.

    The decline in take-up also includes denials. According to 
Employment and Training Administration data on erroneous denials, the 
denial error rate for separation reasons in 2017 was 17.44 percent, 
while that error rate in 2007 was just 8 percent. Similarly, in 2017, 
17.54 percent of benefits were erroneously denied for nonseparation 
issues, while in 2007, the improper nonseparation denial rate was only 
9.9 percent. It would be helpful for the Department of Labor to examine 
the reasons for this dramatic increase in agencies erroneously denying 
benefits.

    Question. The high level of unemployment and therefore high level 
of disbursement of benefits is applying significant pressure to State 
unemployment trust funds.

    Could you please provide your assessment on the current condition 
of State unemployment trust funds and in others you may know of?

    How do you envision any challenges affecting future State budgets 
and taxes?

    Is there any assistance you and states would like to see from 
Congress?

    Answer. Eleven States have already applied for Federal loans. 
Surprisingly, State trust funds were in slightly better shape entering 
this recession than the Great Recession, but given the magnitude of 
this crisis, it seems unlikely that most if not all trust funds will be 
exhausted. States are quickly exhausting funds.

    My first suggestion would be to extend the period between the 
issuance of loans and the application of interest and additional FUTA 
penalties during this crisis by 2 years. That would give States time 
and breathing room to begin to recover from this economic crisis.

    Ultimately, however, it may be the case that Federal assistance 
will be needed to forgive massive trust fund balances. It is important 
to keep in mind that it was the state of UI trust funds exiting the 
last recession that was the catalyst for the massive wave of benefit 
cuts that swept States. If we exit this recession with States with 
depleted trust funds and no Federal floor on benefits, we face a 
probable wave of new and even more draconian cuts to access and benefit 
level.

                                 ______
                                 
              Prepared Statement of Hon. Chuck Grassley, 
                        a U.S. Senator From Iowa
    I think it's important again to note what's going on all around us, 
and that is the acknowledgment of racial injustice that has gone on for 
far too long in this country. I certainly support those who are 
speaking out and making their voices heard in a peaceful manner to 
bring about change. While change does not always come easily, I want to 
remind those watching this hearing today that change is possible.

    In December of 2018, the First Step Act--which I introduced--became 
law. This law is the most significant criminal justice reform law in a 
generation. A lot of people didn't think it was possible. But we did it 
by working together--it was a bipartisan effort.

    We're also working together in other ways to address racial 
disparities, such as in health care. The CARES Act and other COVID 
response efforts aim to help all, but especially minority populations 
that have been hit hardest by the virus. We've knocked down financial 
barriers to receiving care during the pandemic and provided support to 
our frontline providers to ensure access. We continue to focus 
attention on the devastating effect COVID has had on nursing homes and 
the need to do better for residents and staff.

    The Trump administration has also announced a number of efforts to 
address the disparate impact of COVID-19 on African Americans and 
others. I ask unanimous consent to insert a document describing those 
efforts into the record. We are also taking action beyond COVID. We're 
working on a bipartisan effort to tackle the tragic issue of maternal 
mortality and the need to improve outcomes for moms and babies.

    All Americans want lower prescription drug costs, but our efforts 
are especially important as minorities suffer from high rates of common 
diseases such as diabetes and hypertension. We're exploring 
improvements for those with kidney disease, patients in need of organ 
transplants, and more.

    We're also in the middle of a transformation of our child welfare 
system. We know that too many children end up in foster care, and that 
black children are overrepresented in this system. Thanks to our 
bipartisan efforts, States are now transforming the way they operate to 
keep more kids safely at home instead of placing them in foster care.

    There is obviously much more to be done, and I look forward to 
working with my colleagues on both sides of the isle to continue these 
efforts.

    Now I'd like to shift my remarks to focus on the topic of our 
hearing today. As a result of COVID-19 and related stay-at-home orders, 
millions of Americans across the country have lost work.

    Congress passed the CARES Act to provide help to those affected in 
many different ways, including by temporarily expanding unemployment 
insurance, or UI. These increased UI benefits have played an important 
role in helping those who lost a job or who couldn't work as a result 
of the pandemic. Given the need to act quickly to reduce the spread of 
COVID-19, providing extra help through the unemployment system made 
sense as a way to reduce the economic impact of stay-at-home orders.

    But now we're facing a much different situation than we were in 
mid-March. States are reopening, employment recently turned positive, 
and we need to shift our focus to helping people safely return to work, 
making sure businesses are able to come back quickly and put the 
country back on a path to economic growth. We've also learned a few 
things since the CARES Act became law.

    The CARES Act provides an additional $600 per week to those 
receiving UI--representing the gap between the U.S. average weekly wage 
and the average weekly UI benefit. One thing we've learned is how 
poorly targeted the additional $600 per week payments are, as it 
appears most recipients are being paid more on UI than they were when 
working. This discourages people from returning to work or taking a new 
job, delaying the recovery.

    Recent research published by the University of Chicago estimates 
more than two-thirds of UI recipients may receive benefits that exceed 
lost earnings, with more than 20 percent potentially getting double 
what they used to earn--as long as they don't work. Some will say this 
is just an academic paper, and that these extra payments aren't really 
an issue today.

    Those folks haven't been reading the many letters I get from Iowans 
each day, and I'm sure every member on this committee is hearing from 
businesses having a hard time bringing people back to work or from 
hard-working constituents earning less than others they know who are 
getting unemployment.

    Let me share a few stories from the letters I've received.
                                letter 1
    My daughter went back to work voluntarily because she wanted to 
help ensure the company would still be around after COVID-19. Many of 
her co-workers chose to stay home and, due to the $600 extra per week, 
are making more than she is. This isn't right.
                                letter 2
    Senator Grassley, I am a small business owner who is in desperate 
need for additional employees, yet I receive very few applications when 
I post jobs. The issue is the additional unemployment. With the 
additional $600 per week, my potential employees make more on 
unemployment than they would working.
                                letter 3
    We are trying to hire back laid-off COVID-19-related employees (or 
anyone else too) for $15/hour and we find that they are receiving the 
equivalent of $20/hour in unemployment benefits. Suddenly the 
government became our competitor. How could that happen?

    These letters represent a small sample of those who write in daily 
with concerns about the additional $600 payment. Based on these letters 
and others I'm sure we've all received, you'd think everyone would 
agree we need to find a better way to help those who have lost income. 
But you'd be wrong.

    Despite mounting evidence of the problems these extra payments are 
causing, the House passed a bill recently to extend them--not just for 
a month or two, but for another 6 months, through January 2021. Given 
this, I asked the Congressional Budget Office what impact these 
additional payments might have if continued. Here's what they said: 
roughly five of every six recipients would receive benefits that 
exceeded the weekly amounts they could expect to earn from work during 
those 6 months.

    Employment would probably be lower in the second half of 2020 than 
it would be if the increase was not extended; in calendar year 2021, 
employment would be lower than it would be without the extension. That 
doesn't sound like a recipe for economic growth, especially given last 
week's jobs report, which shows people are returning to their jobs and 
that millions more expect to return soon.

    I know everyone is focused on these extra $600 checks. But let me 
remind everyone of the other CARES Act policies that continue past 
July. First, the CARES Act allows those out of work as a direct result 
of COVID-19 to get UI benefits through December. This includes people 
who are infected or caring for someone infected, those who can't go to 
work because their workplace is closed due to COVID-19, and those who 
rely on day care that's not available as a result of the pandemic.

    Second, individuals will get an additional 13 weeks of unemployment 
benefits if they're still unemployed after State benefits run out. And 
in States where unemployment rates remain high, further weeks of 
benefits will also be available. And most importantly, the CARES Act 
provides funding for what are called ``work sharing'' programs.

    Under these programs, instead of laying off employees, businesses 
with reduced hours can pay employees a partial UI check to offset lost 
income. States can also use it to bring back workers on a part-time 
basis if they can't fully reopen yet. And don't forget, UI isn't the 
only game in town here.

    The CARES Act included many policies to help those affected by the 
pandemic, including the employee retention tax credit, the Paycheck 
Protection Program, direct payments to individuals, and other policies 
designed to help businesses reopen and people to return to work. The UI 
system will continue to play an important role in addressing the 
impacts of the pandemic. However, our efforts must be coordinated to 
help workers and businesses in a way that is most productive.

    I look forward to hearing from our witnesses today to learn what's 
worked, what hasn't, and discuss how we can make sure our efforts in 
Congress can best support a strong economic recovery.

                                 ______
                                 

 HHS Initiatives to Address the Disparate Impact of COVID-19 on African 
                    Americans and Other Racial and Ethnic Minorities

PRESIDENT TRUMP IS COMMITTED to equipping racial, ethnic, and 
underserved communities with the health-care resources needed to combat 
the COVID-19 pandemic. The information below outlines some of the 
immediate steps underway to improve prevention, testing, and treatment 
of COVID-19 in minority populations and reduce racial and ethnic 
disparities.

The administration recognizes that effectively addressing the 
underlying issue of overall poorer health status in some racial, 
ethnic, and other underserved communities requires both short- and 
long-term strategies. Broader initiatives that address both economic 
opportunity and health-care disparities are critical and the 
administration has multiple such initiatives underway, including the 
creation of Opportunity Zones, the White House Council on Eliminating 
Barriers to Affordable Housing, and HHS's targeted efforts on chronic 
underlying health conditions such as diabetes, hypertension, maternal 
morbidity, and tobacco use, all of which are more prevalent among some 
minorities. This fact sheet is focused on the immediate steps the U.S. 
Department of Health and Human Services (HHS) has taken to address the 
disparate impact of COVID-19 on African Americans and other racial and 
ethnic minorities.

 Improving our Understanding of COVID-19's Impact on Minorities

Reliable and timely data is critical to identify the populations most 
vulnerable to COVID-19 or any other infectious disease. Currently, 
however, only a small proportion of data reported to the Centers for 
Disease Control and Prevention (CDC) includes information on a 
patient's race or ethnicity. Efforts are ongoing to improve 
completeness of reporting from public health departments and 
laboratories, such as developing modernized systems to enable complete 
and timely reporting that will be used for COVID-19 but will be 
adaptable to any specific health issue in the future. The CDC continues 
to collaborate with hospitals, academic institutions and State, local, 
territorial, and tribal public health partners to gather and report 
more racial/ethnic data. These collaborations will allow CDC to get 
more complete data on race/ethnicity, reflected in preliminary data and 
can inform and improve clinical management of patients, allocation of 
resources, and targeted public health information.

CDC Is Strengthening Data Collection and Reporting on Racial and Ethnic 
Minority Populations: The CDC is publishing and updating daily 
available race/ethnicity data received through case-based reporting 
from public health departments on the CDC website. HHS has standardized 
reporting to ensure that public health officials have access to 
comprehensive and nearly real-time data to inform decision making in 
their response to COVID-19. Laboratory testing data, in conjunction 
with case re-ports and other data, also provide vital guidance for 
mitigation and control activities and is a critical piece to better 
understanding the impact on socially vulnerable populations.

CDC's COVID-NET Is Publishing Data on Hospitalizations by Race and 
Ethnicity: The COVID-NET surveillance system collects data from a 
network of over 250 acute-care hospitals in 14 states and publishes 
COVID-19-associated hospitalization rates on a weekly basis. Data are 
also displayed by age, gender, and underlying condition. From March 1 
to May 16, 2020, 82 percent (18,136) of laboratory-confirmed COVID-19-
associated hospitalizations reported to COVID-NET included data on 
race/ethnicity.

CDC Shows Higher Hospitalization of African Americans for COVID-19: In 
March 2020, the CDC out-lined characteristics and clinical outcomes of 
hospitalized COVID-19 patients in Georgia, documenting that African 
American patients were overrepresented in hospital admissions relative 
to other racial groups.

CDC Is Using Surveillance and Epidemiology to Assess Risk Factors: CDC 
is complementing its work to gather more real-time demographic data by 
using surveillance networks and epidemiologic investigations to better 
understand risk factors for severe COVID-19 disease. These surveillance 
networks and investigations will allow CDC to gather and analyze data 
over time to build an evidence base about COVID-19 and how demographics 
like race/ethnicity, age, sex, occupation and others may increase a 
person's risk.

CDC Is Using Electronic Health Records: CDC is actively working with 
multiple vendors and aggregators of electronic health records data 
(EHR). EHR data are a rich, timely source of detailed clinical and 
demographic data that can provide insight into COVID-19 and its impact 
on our communities and families. Further, these data can help us 
understand and address the impact of COVID-19 on minority and 
vulnerable communities.

 Making Testing More Accessible and Affordable

Expanding Testing at Federally Qualified Health Centers (FQHCs): In 
May, $583 million was awarded to 1,385 FQHCs, many of which are located 
in medically underserved communities and are often the main source of 
affordable and accessible health care in those communities. Over 22 
percent of people served by FQHCs are African American.

A large majority (91 percent) of FQHCs are testing for COVID-19: These 
funds will support and expand that effort. In addition to the ongoing 
health center program funding, the administration has invested a total 
of $2 billion in community health centers to respond to COVID-19, 
ensuring that the 28 million served by FQHCs in a given year have 
access to the care and testing they need.

Getting Testing at Community-Based Retail Testing Sites: HHS supports 
public-
private partnerships that established COVID-19 testing locations by 
CVS, Rite Aid, Walgreens, Walmart, Kroger, and Health Mart to 
accelerate testing for more Americans in communities across the 
country. The partnerships provide Americans with faster, less invasive, 
and more convenient testing; protect health-care personnel by 
eliminating direct contact with symptomatic individuals; and have 
expanded rap-idly to areas that are under-tested and at highest risk of 
COVID-19. Approximately 70 percent of these sites are located in areas 
with high social vulnerability, according to the CDC.

Helping States Protect Vulnerable Populations: The CDC awarded $186 
million from the Coronavirus Preparedness and Response Supplemental 
Appropriations Act and an additional $631 million from the CARES Act to 
state and local jurisdictions to support contact tracing, public health 
surveillance, and testing, all of which are fundamental to protecting 
vulnerable populations, particularly as communities take steps to 
reopen. In addition, from the funds appropriated by the Paycheck 
Protection Program and Health Care Enhancement Act, the CDC has awarded 
$10.25 billion to States to increase testing in 64 State and local 
jurisdictions, and the Indian Health Service (IHS) will be allocating 
$750 million to increase testing.

 Making Treatment More Accessible and Affordable

Paying for Care of Uninsured Individuals: HHS is using a portion of the 
$175 billion Provider Relief Fund to pay for COVID-19-related care of 
uninsured Americans. Doctors, hospitals, and other providers who have 
provided testing or treatment for uninsured individuals with a COVID-19 
diagnosis can request reimbursement through the program and will be 
reimbursed generally at Medicare rates, subject to available funding.

Protecting Patients From Debt Collectors: HHS also is protecting 
uninsured individuals coping with COVID-19 by prohibiting providers 
from seeking to collect out-of-pocket payments from a patient that are 
greater than what the patient would have otherwise been required to pay 
if the care had been provided by an in-network provider. This 
guarantees that uninsured individuals will not have hospitals or other 
health-care providers who receive funds from the Provider Relief Fund 
attempting to collect additional sums for the care provided to support 
COVID-19 treatment and recovery.

Strengthening Access to Treatments for Substance Use Disorders and 
Serious Mental Illnesses: Ensuring consistent and ongoing treatment for 
substance use disorders and serious mental illness is important, 
particularly as the pandemic has added significant new stressors that 
may be felt more acutely by the physically and financially vulnerable. 
The Substance Abuse and Mental Health Administration (SAMHSA) released 
$110 million to State, local, and tribal governments to continue to 
expand access to appropriate treatments. Whether for preexisting mental 
health conditions or for mental health challenges arising during this 
emergency, making sure there are enough resources for communities is an 
essential role for which States can use this funding.

Supporting Hospitals That Serve Low-Income Communities: As elective 
procedures were canceled, the continued financial viability of some 
hospitals has been threatened--especially those that were already 
operating on thin margins because they serve rural populations or care 
for a disproportionately high number of Medicaid, Medicare, and 
uninsured patients. The Health Resources and Services Administration 
(HRSA)'s Federal Office of Rural Health Policy awarded $150 million to 
assist hospitals funded through the Small Rural Hospital Improvement 
Program (SHIP) to assist capacity building in small hospitals to help 
them provide services to fight COVID-19. Because of the importance of 
these rural communities, HHS further allocated $10 billion to support 
rural providers and targeted an additional $2 billion to hospitals with 
a disproportionate share of uncompensated care and seeing 100 or more 
COVID-19 patients.

 Tailored Guidance for Individuals and Communities Most at Risk

CDC Offers Guidance for At-Risk Populations: Through data collected by 
doctors and epidemiologists across the country, we know that people 
with underlying health conditions are at elevated risk for 
complications from COVID-19. The CDC has published information for 
people who need to take extra precautions. Conditions like diabetes, 
hypertension, cardiovascular disease, asthma, cancer, and other chronic 
health conditions that are prevalent at higher rates in some minority 
communities can elevate the risk for complications due to COVID-19. The 
published information offers guidance on how to protect those most 
vulnerable populations and important information about reducing the 
risk of severe illness from COVID-19 infection.

 Expanding Telehealth Options to Ensure Access to Needed Care

Expanding Access to Telehealth Services: At-risk populations can face 
additional challenges accessing health care, including transportation 
and a higher risk for infection. The Federal Government, particularly 
the Centers for Medicare and Medicaid Services (CMS), has taken steps 
to make accessing care through telehealth services easier. For example, 
CMS is helping people enrolled in Medicare to receive medical care 
using telecommunications technology. CMS also announced a waiver 
allowing doctors to provide telehealth and other services using 
communications technology wherever the patient is located, including at 
home and outside of designated rural areas, even across State lines. 
The types of telehealth that can be offered can also be flexible. 
Typically, devices must be equipped with audio and video capability to 
provide telehealth services. Now, some telehealth visits can be billed 
for audio-only encounters. The HHS Office for Civil Rights (OCR) also 
issued a Notification of Enforcement Discretion to empower covered 
health-care providers to use widely available communications 
applications without the risk of penalties imposed by OCR for 
violations of Health Insurance Portability and Accountability Act of 
1996 (HIPAA) rules for the good faith provision of telehealth services.

Rural Health Clinic (RHC) and FQHC Flexibilities: RHCs and FQHCs are 
essential parts of the health-care system, particularly for underserved 
communities and the uninsured. To expand upon flexibilities to increase 
access to care, CMS released information for RHCs and FQHCs on 
Telehealth and Virtual Communications Flexibilities during COVID-19. 
Using telehealth protects patients at highest risk from potential 
exposure to COVID-19, allows for the provision of health care to manage 
both chronic and acute health issues, and also helps those who may have 
transportation challenges in getting to their provider.

Expanding Funding for Telehealth Programs: HHS, through HRSA, has 
awarded money through several different programs to expand telehealth 
availability. First, HRSA awarded $11.5 million through Telehealth 
Resource Centers. HRSA also awarded $20 million to increase telehealth 
access and infrastructure for providers and families to help prevent 
and respond to COVID-19.

Telehealth for Medicaid Substance Use Disorder Services: CMS released 
an Informational Bulletin to States that identifies opportunities for 
telehealth delivery methods to increase access to Medicaid services for 
substance use disorder.

 Strengthening Outreach and Effective Communication on COVID-19 to 
                    Minority Communities

Improving Outreach and Communication on COVID-19 to Minority 
Communities: HHS's Office of Minority Health announced a competitive 
funding opportunity to invest up to $40 million for the development and 
coordination of a strategic network of national, State, territorial, 
tribal, and local organizations to deliver important COVID-19-related 
information to racial and ethnic minority, rural and socially 
disadvantaged communities hardest hit by the pandemic. In addition, the 
award will support linkages to COVID-19 testing, vaccination, other 
healthcare services and social services in communities highly impacted 
by or at greater risk for COVID-19.

Enforcing Civil Rights Laws During the COVID-19 National Public Health 
Emergency: In March 2020, OCR issued a bulletin to ensure that entities 
covered by civil rights authorities, including section 1557 of the 
Affordable Care Act, are aware that their obligations under laws and 
regulations that prohibit discrimination on the basis of race, color, 
national origin, disability, age, sex, religion and exercise of 
conscience in HHS-funded programs, are not suspended in the provision 
of health-care services during COVID-19.

Ensuring Access to Language Assistance Services During the COVID-19 
National Public Health Emergency: In May 2020, OCR issued a bulletin to 
covered health entities to ensure they continue to serve individuals 
with limited English proficiency (LEP) during the COVID-19 emergency. 
Under regulations implementing section 1557 of the Affordable Care Act, 
recipients, including hospitals and other health-care providers, must 
take reasonable steps to provide meaningful access to individuals with 
LEP eligible to be served or likely to be encountered in their health 
programs and activities.

National Network to Eliminate Disparities (NNED) in Behavioral Health: 
SAMHSA continues to operate the NNED in Behavioral Health, which is a 
network of over 1,100 community-based organizations across the country 
serving primarily ethnic minority populations. The NNED provides 
training and informational resources. During the COVID-19 pandemic, the 
NNED has accelerated the development and release of informational 
materials, including CARES Act provisions, to these communities. It has 
hosted virtual webinars and roundtables focusing on strategies to 
address mental health and substance use issues exacerbated by the 
pandemic in minority communities.

Multilingual COVID-19 Information: The Food and Drug Administration 
(FDA) has increased outreach by developing and disseminating COVID-19 
health education materials for consumers in multiple languages. The 
agency's official COVID-19 webpage has been translated into Spanish and 
includes the FDA COVID-19 Frequently Asked Questions (available in 
English and Spanish). The FDA has also created a COVID-19 Multilingual 
Resources webpage that features a growing collection of educational 
materials in Spanish, Simplified Chinese, Korean, Vietnamese, Tagalog, 
among other languages. To further enhance outreach and dissemination, 
the FDA launched a COVID-19 Bilingual (English/Spanish) Social Media 
Toolkit that features consumer friendly messages and culturally 
appropriate graphics.

                                 ______
                                 
             Prepared Statement of Les Neilly, President, 
                      Neilly Canvas Goods Company
    Good afternoon, Chairman Grassley, Senator Wyden, and the other 
distinguished members of the Senate Finance Committee.

    It is an honor and a privilege for me to represent small business 
owners across our great country, and to express my experiences 
regarding the extra $600 per week pandemic unemployment compensation 
enacted as part of the CARES Act. I know I am not alone as countless 
other small business owners have had similar experiences. My name is 
Les Neilly, president and controlling owner of Neilly Canvas Goods 
Company, a fourth-generation family business that manufactures 
tarpaulins (tarps) for trucking and industrial use and we also make, 
install, and service commercial and residential awnings in the fabled 
Strip District in Pittsburgh, PA.

    I got thrown into the business at the age of 20 upon the sudden and 
untimely death of my father, Harry Neilly, at the age of 47 on May 11, 
1976. I helped my mother, Faye Neilly Renz (later remarried) run the 
business until her retirement in 2013 at age 81 after she had a minor 
stroke which caused her to lose her peripheral vision to the left in 
both eyes. She failed the mandatory eye test required by the State of 
Pennsylvania that all stroke victims must take, lost her driver's 
license, and immediately declared, ``I retire.''

    My brother Drew and I have been running the business ever since and 
became the owners when our mother signed the business over to us 
effective January 1, 2019. We have nine full-time employees and two 
part-time employees between our two locations. We have one full-time 
employee in our satellite location in Dundalk, MD outside of Baltimore.

    We offer our employees medical coverage. We pay about 60 percent of 
the premium and the employees pay the remaining 40 percent. We provide 
vision coverage for all our employees, and we offer dental insurance as 
an option the employees can take as a payroll deduction. We also offer 
AFLAC insurance products as a payroll deduction.

    We provide three paid personal days per year and paid vacation of 1 
to 3 weeks earned depending on the amount of seniority. We pay the six 
standard holidays: New Year's Day, Memorial Day, Independence Day, 
Labor Day, Thanksgiving, and Christmas.

    We also offer a SIMPLE IRA retirement plan for all who would like 
to participate. The employees can contribute any amount they choose up 
to the maximum limit as legislated. Neilly Canvas matches up to 3 
percent of the amount the employee puts into the SIMPLE IRA plan.

    Our employees make between $14.00 and $21.25 per hour, in addition 
to the benefits described above. We also pay time and one-half for all 
hours worked over 40 hours per week. With the passage of the CARES Act, 
the extra $600 per week of unemployment compensation amounts to $15.00 
per hour based on a 40 hour work week. The pandemic unemployment 
compensation alone pays our lowest-paid employee more than they make 
working a 40 hour work week, and all they had to do was sit at home and 
do nothing.

    Pennsylvania Governor Wolf announced the shutdown of all non-
essential businesses on Thursday, March 19th, effective immediately. 
Since we make tarps for the trucking industry, which is an essential 
industry, we were able to continue to operate. However, due to the lack 
of orders from our customers, we laid everyone off effective Monday, 
March 23rd, announced at the end of the day on Friday, March 20th. Drew 
and I went to work every day to answer the phones and make the small 
orders that came in.

    By the end of the second week of the employees being laid off, we 
had enough orders to call two people back to work for Monday, April 
6th. We received some additional orders that week and called two more 
people back starting on Thursday, April 9th. We continued to operate 
with four employees in Pittsburgh and the one employee in Dundalk, MD 
for the next 3 weeks.

    On the third week back to work, Friday, April 24th was payday. We 
pay our employees bi-weekly, with a one week lag from the end of the 
pay period until the employees get paid for the previous two weeks 
worked on the following Friday.

    Just before noon on April 24th, one of the employees completed an 
order and brought it up to my office. They asked to see their pay stub, 
as all of our employees have direct deposit. I handed it to them, and 
they opened the envelope and looked at it, then started complaining to 
me and asked me why they were working and the employees at home were 
not. They then stated that their co-workers who were still at home laid 
off were making more money than those employees who were working, and 
that wasn't fair. They told me that they and their spouse were going 
back on unemployment, which I missed hearing during our conversation, 
and they didn't show up for work on Monday, April 27th, or Tuesday, 
April 28th.

    Immediately after the first employee left, a second employee came 
into my office with the same complaint, saying they were missing out on 
a lot of money by working and not being laid off. They asked if it was 
possible to have a rotating schedule with the employees who were still 
laid off so everyone could participate in getting the extra $600 per 
week instead of their co-workers who were laid off the entire time. 
They stated they knew I was trying to run a business, and understood 
that I had to make tough decisions, but they were missing out on the 
extra $600 per week the Federal Government mandated for the laid-off 
workers every week, and they wanted to share in the ``pot of gold.''

    We applied for the Paycheck Protection Program loan through a small 
community bank that we had worked with previously. We received 
immediate approval and the money was deposited in our payroll account 
about a week later, on Tuesday, April 28th.

    Once the PPP money hit our account, I called all the employees who 
were laid off and told them to report to work on Wednesday, April 29th, 
because we received the PPP money. The remaining laid-off employees 
reported for work on Wednesday, April 29th, including the married 
couple who declared on Friday, April 24th, they were going back on 
unemployment.

    When the married couple checked into getting paid for a partial 
week of unemployment, they discovered they were ineligible for two days 
of unemployment and a partial payment of the extra $600. Since Congress 
legislated the extra $600 per week in unemployment compensation, the 
married couple figured they could just put themselves back on 
unemployment. It cost them two days of wages. That was another negative 
ramification of this provision.

    I held a meeting with all employees first thing on Wednesday, April 
29th. I explained the PPP loan and our requirements as an employer. We 
are responsible for getting everyone back to work who was employed 
previously, and the company must use at least 75 percent of the PPP 
money for payroll and medical benefits, and 25 percent of the PPP money 
for a few other expenses to be eligible for loan forgiveness. We also 
instituted paying every employee a $20.00 per day bonus for each day 
they worked through the end of June, retroactive to when we called back 
the first two employees. We did this as an attempt to ease the 
resentment of the people who worked versus the laid-off employees. 
Since everyone was called back to work, everything now seems to be okay 
regarding employee attitudes and morale.

    May I suggest, as a business owner and someone who, like many other 
small business owners who have experienced similar situations as I did 
regarding employees who were working being resentful that they were not 
receiving the extra $600 per week unemployment compensation like their 
co-workers who continued to be laid off, DO NOT pay someone more money 
than they make in a 40-hour work week. Pay the laid-off workers the 
full amount they earn in a 40-hour work week to make them whole, but 
nothing extra. Paying someone laid off more than they make in a week 
for unemployment compensation is rewarding them for being laid off and 
penalizing an employee who is helping the company survive and move 
forward because they are working.

    Owning a small business, or any size business, is hard enough on a 
daily basis without having to deal with situations created by Congress 
that put business owners in a position to mitigate resentments between 
employees. Employees who are working to help keep the business afloat 
feel frustrated and angry that their laid-off co-workers are reaping 
``rewards'' bestowed upon them by elected representatives, many of 
which have never owned a business to understand the ramifications of 
policy decisions and the potential precarious situation it puts 
business owners in.

    Further, I am concerned that small business owners who survive this 
historic downturn will be saddled with high unemployment taxes as a 
result of this policy. I worry that this $600 per week incentive will 
entice employees to remain on an already overburdened unemployment 
system rather than return to work.

    Thank you for allowing me to express my experiences regarding the 
extra $600 per week Federal pandemic unemployment compensation. I 
appreciate the opportunity to appear in front of the Senate Finance 
Committee representing small business owners, and I hope you consider 
my testimony when contemplating future legislation to extend the CARES 
Act unemployment compensation and the amount paid to laid-off workers 
on a weekly basis.

                                 ______
                                 
            Questions Submitted for the Record to Les Neilly
             Questions Submitted by Hon. Patrick J. Toomey
    Question. Many employers across Pennsylvania and across America are 
facing similar circumstances in which employees are discouraged from 
returning to work because of distorted government incentives. As you 
know, approximately two-thirds of Americans on UI are earning more on 
unemployment than they previously were while working, meaning that many 
small businesses across America will be faced with this same difficult 
situation as you were. The loss of a job is not merely the loss of a 
paycheck, but is also a loss of routine, purpose, and connection with 
others.

    Do you believe that long-term unemployment could have negative 
effects on Americans' well-being and mental health?

    Answer. I do believe that long-term unemployment has a negative 
effect on the American people, as we have seen a rise in suicides, 
depression, overdoses, and domestic violence since the Wuhan virus led 
to the shutdown of much of the economy and businesses. I cite the 
article from The Washington Post from May 4, 2020. This is the link to 
the article, https://www.washingtonpost.com/health/2020/05/04/mental-
health-coronavirus/. When people aren't working and they are at home, 
they have more time to think and dwell on the negatives, questioning 
their worth, they feel they are letting their families down, and it 
could lead to a tragic outcome for the individual and have a direct 
effect on their family unit.

    Question. Do you believe that the extra $600 UI benefit encourages 
workers to stay on UI for a longer period of time?

    Answer. Yes, I believe the extra $600 per week UI benefit has a 
negative effect on the unemployment situation. I feel it encourages 
employees to want to stay on unemployment because in about 70 percent 
of the time, the laid off worker makes more money with the extra $600 
UI than if they were working and getting their regular paycheck for a 
week. As I mentioned in my written and oral testimony, it also creates 
animosity and resentment from the employees who have been called back 
to work to help the company while their co-workers who are still laid 
off are making more money sitting at home not helping the company move 
forward. Is that fair to the employee working, I think not, and it 
created an awkward situation for me to be in when our employees 
complained to me about the scenario described above. I was trying to 
run a business and make decisions to help keep it afloat under the 
strained circumstances caused by the shutdown, and I also had to deal 
with employee unrest caused by our Federal elected officials giving 
laid off workers an extra $600 per week UI.

                                 ______
                                 
             Prepared Statement of Jose Javier Rodriguez, 
                     State Senator, Florida Senate
    Chairman Grassley, Ranking Member Wyden, and honorable committee 
members, the following is my testimony submitted for your consideration 
in my capacity as a State legislator serving in the Florida Senate who 
has advocated for out-of-work constituents.

    Unemployment systems, when they work, give workers, their 
communities and oftentimes even employers an economic bridge over 
troubled water. In these unprecedented times, with the CARES Act \1\ 
you have done a great deal of good. For that, I thank you on behalf of 
the constituents that I serve back home in Florida.
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    \1\ The Coronavirus Aid, Relief, and Economic Security Act, Public 
Law No. 116-136 (March 27, 2020).

    Florida entered this economic crisis with one of the (if not the) 
---------------------------------------------------------------------------
least prepared unemployment systems. None of its flaws were hidden.

    There is no State that currently provides a fewer number of weeks. 
Florida is near the bottom in State benefit amounts, capped at $275 per 
week. Florida also has major gaps in eligibility rules; and because of 
those rules, last year only 11 percent of out-of-work Floridians were 
able to collect unemployment, lower than all but one other State. Added 
to that, the application and payments system is infamous for its 
failures, as well as for how persistent those failures are, having 
endured unchanged through several gubernatorial terms, successive 
audits and prior Federal intervention. Even before COVID-19, Florida 
was not meeting DOL \2\ metrics on promptly paying benefits.
---------------------------------------------------------------------------
    \2\ U.S. Department of Labor.

    I serve a half-million residents of Miami-Dade County in the 
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Florida Senate. We live and breathe trade, tourism, and hospitality.

    The CARES Act has lifted many of my constituents when Florida's 
system alone would not have. The PEUC program \3\ adds 13 weeks to our 
paltry 12 weeks. Last week our first constituents got on it; without it 
they would have been cut off without having yet found work again.
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    \3\ Pandemic Emergency Unemployment Compensation or ``PEUC'' was 
created by section 2107 of the CARES Act.

    The PUC program \4\ adds $600 a week until July 31st. Its design is 
simple. It goes right where it's needed: to out-of-work Americans who 
spend it in their communities on necessities. It is the easiest program 
to administer, and that is a significant benefit in States like Florida 
with so many problems getting benefits paid.
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    \4\ Federal Pandemic Unemployment Compensation or ``PUC'' was 
created by section 2104 of the CARES Act.

    Ricardo, 56, worked as a bellman at the Fontainebleau Hotel for 
8\1/2\ years before his layoff in March. A diabetic, he loses his 
health insurance this month. He wants to get back to work but his 
industry has not returned. He wanted me to tell you the added ``$600 is 
necessary for me to survive, including being able to pay for my 
medications. I have been paying my taxes since I was 14 years old. I 
have been working for decades. I've never collected unemployment. This 
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money is not a luxury, it's a necessity.''

    Karen, 30, worked in marketing at Gulfstream Park Racing and Casino 
for 9 years before being laid-off during the pandemic. She hopes to 
return and is looking for work in the meantime. A single mother to a 9-
year-old daughter, she needs the $600 added benefit to keep paying her 
bills. She wanted me to tell you ``[m]y fear is that me and my daughter 
will end up homeless without this. I waited over a month to receive 
Florida's unemployment and honestly $275 a week is just not enough. 
This Federal aid is important to help us for all we do as taxpayers.''

    Randi, 47, is the mother of an 8-year old boy and 5-year old girl. 
A recruiter for over 20 years, she owned her own business for the last 
4. She had a thriving business until the pandemic and after an 
``arduous'' application process she was able to file on March 22nd; but 
only just received her first payment last week. She needs the economy 
to pick back up to get back to work and wanted me to tell you 
``[u]nfortunately this $600 has become vital to me and my family. We 
are relying on that money for basic needs, like food, utilities, etc., 
as well as finally being able to buy my daughter a toy. Seems simple, 
but we've been in quarantine since March 15th and I haven't been able 
to buy my children anything.''

    With the CARES Act, you also shored up a highly successful layoff 
aversion program called Short Time Compensation, or STC. Businesses 
want to do the right thing and often need help, like Bernie, a small 
business owner we assisted. He employed 17 people before the crisis and 
will avoid layoffs by implementing a workshare program with an STC.

    Unemployment is a Federal/State partnership. Oversight of the 
administration of our unemployment systems is on your side of the deal. 
Despite the successes of your programs, that oversight is sorely 
needed.

    On top of design flaws coming into the crisis, Florida's system 
was, and continues to be, slow, unreliable and inept in its response to 
the crisis in general; and in its deployment of CARES Act programs 
specifically. Other State agencies in Florida have been able to deploy 
Federal flexibility and resources effectively; but not the Department 
of Economic Opportunity, or DEO, who administers our unemployment 
programs.

    For hundreds of thousands of Floridians the system was effectively 
down, inoperable and inaccessible, for at least the first half of the 
crisis, punctuated by unmet ever-changing goals and seemingly-never-
ending mishaps. So bad was it that Florida earned the distinction of 
being the only State in the Union paying out less than it received 
during the period. Florida's employers have dutifully paid taxes to 
fund a system we all needed to function; but it did not.

    Leah, 63, worked part-time for an airline to pay the bills. A 
recent survivor of lung cancer whose job could not be performed 
remotely, she was considered ``compromised'' and became unemployed on 
March 20th. She could not apply because the system crashed daily for 
weeks. After DEO, out of sheer desperation, created a paper 
application, she mailed one in on April 13th. The first day she was 
``in the system'' was May 3rd. Were it not for assistance from our 
office she would not have been able to adjust the date of her claim and 
would have lost over a month of benefits.

    The ordeal for many is like the ancient military punishment of 
running the gauntlet. Unlike Leah, Randi, Karen, and Ricardo, thousands 
have not made it through the gauntlet and are left in limbo for weeks 
and months. No response. No reasons given. No assistance from DEO. More 
than half speak credibly of threatened or certain eviction once a 
moratorium is lifted. Many ask about food assistance, going hungry for 
the first time in their adult lives. Savings decimated, retirement 
plans a memory, others worry for their high school graduates whose 
futures they are less certain to support. They include a worker 
furloughed from a department store, another laid off after 20 years in 
the restaurant industry; single parents with young children and 
caretakers of children with disabilities or frail parents.

    Florida's failures have worked a special hardship on people, adding 
needless anxiety and uncertainty to economic pain. There's a bipartisan 
group of legislators whose offices field a bulk of the calls. Each of 
us has a list we manage of critical cases to informally bump up to DEO 
and finally get them paid. The lists have different names but 
internally we called ours the ``exigent circumstances'' list. 
Applicants get on whose live circumstances, including those who depend 
on them, are especially difficult without income. Applicants also get 
on--and these are real examples--if we hear one say ``I'm at the end of 
the road;'' a middle-aged man say ``I'm struggling to maintain a 
positive attitude and my wife is afraid that this could be the death of 
me--please help sir, I'm desperate;'' a young man say he fears 
``something very bad'' will happen to him if he cannot get back on his 
feet; or that a mother of a 2-year-old is at the ``end of [her] rope.'' 
We err on the side of caution in alerting the appropriate people, of 
course, before adding them to the list.

    The DEO has been so inconsistent and unreliable in deploying 
assistance--having yet to put in place a system where the majority of 
call-takers are both trained and have authority to address callers' 
issues--and has done such a poor job communicating its last-minute and 
ever-changing rules around CARES Act programs, that networks of 
legislators, applicants, and journalists dispense the latest advice 
with greater efficiency than DEO. The best tips on making it through 
the system are effectively crowdsourced.

    Florida remains an outlier in deploying the CARES Act. In Florida, 
of those deemed ineligible for traditional unemployment only about one-
fourth end up qualifying for the COVID-19 catch-all program in the 
CARES Act, the PUA program,\5\ that includes coverage for independent 
contractors, the self-employed and others who normally would not be 
eligible. That rate is far below that of other States. It remains 
unclear why, although Florida's late start--creating a PUA application 
5 weeks after the CARES Act was passed--may account for part of the 
explanation.
---------------------------------------------------------------------------
    \5\ Pandemic Unemployment Assistance or ``PUA'' was created by 
section 2102 of the CARES Act.

    One of the latest issues to surface is that it appears DEO is 
awarding many applicants the minimum level of benefits under the PUA as 
a default without advising them of the need to request a ``monetary 
determination'' to adjust their benefits up to the level they are 
entitled to receive. Such a self-inflicted wound further deprives the 
---------------------------------------------------------------------------
State of Florida access to our own tax dollars via the CARES Act.

    In other States, individuals exhausting traditional benefits are 
transitioned onto PEUC's additional weeks as automatically as possible; 
but not in Florida. Despite early promises to make it seamless, DEO 
created a PEUC application for those who have exhausted traditional 
benefits, increasing the likelihood that many of those applicants will 
never get onto PEUC.

    Finally, it appears that the State of Florida has only paid out 
about half of the $600 weekly benefits available to Floridians under 
the simplest program to administer: the PUC. This comes more than two 
months since the CARES Act was signed into law.

    The health of Florida's unemployment trust fund is an illusion that 
relies on the Nation's stingiest benefit levels and on an architecture 
so cumbersome and inaccessible for so long that it seems that way by 
design. Florida's experience should serve as a lesson to other States. 
The economic crisis may tempt others to do what Florida did in the wake 
of the last economic crisis: shrink, starve and ignore its unemployment 
system. If they do, it will be a State legislator from their State 
delivering these remarks next time.

    Continued Federal attention is warranted in the form of Federal 
oversight of States' administration of unemployment systems to ensure 
full and fair access to benefits, along with resources for them to 
modernize their infrastructure. In addition, CARES Act programs ought 
to remain in place until a recovery has reached all major sectors of 
our economy. Otherwise, for communities like mine I fear it will set us 
back in our path to recovery.

                                 ______
                                 
      Prepared Statement of Scott B. Sanders, Executive Director, 
            National Association of State Workforce Agencies
    Chairman Grassley, Ranking Member Wyden, and members of the 
committee, on behalf of the National Association of State Workforce 
Agencies (NASWA), I thank you for the opportunity to testify and submit 
written testimony to discuss the efforts made by our members to provide 
essential unemployment insurance benefits to workers who have lost 
their jobs because of and during the COVID-19 pandemic.

    The members of our Association are State leaders of the publicly 
funded workforce development system including the unemployment 
insurance (UI) program. NASWA serves as an advocate for State workforce 
programs and policies, a liaison to Federal workforce system partners, 
and a forum for the exchange of information and practices. NASWA is a 
private, non-profit corporation, governed by a Board of Directors 
elected from the Administrators of the State workforce agencies. We are 
nonpartisan and our membership includes all 50 States, the District of 
Columbia, Guam, Puerto Rico, and the Virgin Islands.

    Our dedicated members have been working tirelessly to implement the 
new unemployment insurance programs under the CARES Act which was 
signed by the President on March 27, 2020, just over 2 months ago. The 
new Federal Pandemic Unemployment Compensation (FPUC), the additional 
$600 to be made with other UI payments, was implemented by all States 
by the end of April. The new Pandemic Unemployment Assistance program 
(PUA) requires State UI programs to pay self-
employed individuals on a State-wide basis which has never been done 
before in any State. Our information is that 38 States and the District 
of Columbia paid PUA by the end of April and all States by the end of 
May.

    Claims both in the regular programs and the new UI programs have 
increased drastically. In February 2020, the average number of weekly 
payments was 2.1 million. By May 2020, the average number of weekly 
payments skyrocketed to 29.4 million. In contrast, during the Great 
Recession, the peak was just 11.7 million (See Figure 1). No entity, 
public or private, would reasonably have contingency plans in place for 
this scenario to which States have responded, yet our member agencies 
have continued to work through these overwhelming workloads tirelessly, 
and with great dedication. Against this backdrop, I will highlight 
three of the primary challenges that States are experiencing during 
this UI crisis: Promoting Integrity, Trust Fund Solvency, and 
Administrative Funding (to handle the increased volume, including the 
area of information technology (IT) systems).


[GRAPHIC NOT AVAILABLE IN TIFF FORMAT]


                         1. promoting integrity
    Our members work hard to assure the integrity of the unemployment 
insurance program. An important part of integrity is making sure that 
key program components are easy for claimants to understand and for 
agencies to administer.

    NASWA, in partnership with the U.S. Department of Labor (USDOL), 
developed the UI Integrity Center in 2015 which has allowed States to 
share best practices, assisted States in reducing improper payments, 
created and utilized State intensive services teams, the national 
integrity academy, the integrity knowledge exchange and more recently, 
the integrity data hub (IDH).

    As a result of the large number of regular UI State and PUA claims, 
States are seeing a rise in fraudulent activity. There are four 
significant factors that have contributed to the increase. First, 
despite rules allowing States 21 days to make payment, there is intense 
public pressure to issue payments quickly. Second, the large number of 
incidents over the past few years where massive amounts of stolen 
personal identifying information has occurred. Third, the lack of 
individual employment data for States to verify PUA claims. Finally, 
the ability of claimants to self-certify eligibility for a PUA claim.

    As States rapidly adjust to these new and increasing threats, the 
IDH is playing an integral role. The IDH is an innovative data and 
information sharing system that for the first time allows States to 
immediately compare mass volumes of claims with each other. The IDH 
allows for use of a suspicious actor repository, suspicious email 
domains, multi-State cross matching, monitoring foreign and suspicious 
IP addresses, and fraud alerting. In addition, the IDH harnesses the 
power of the investigative work of all States for the benefit of each 
individual State as they report their findings. States are acting 
quickly to utilize the IDH, and as they increasingly begin using this 
system, the national fraud schemes we have seen recently will be 
detected in all States as soon as they are detected in one State.

    These cross State collaborative efforts will continue to enhance 
NASWA and its members' ability to promote nationwide efforts on the 
integrity of all UI claims.
      2. solvency of state unemployment insurance (ui) trust funds
    Recessions offer significant challenges to maintaining adequate 
State UI trust funds due to increased benefit outlays, extended 
durations of claims, and declines in taxable payrolls resulting in 
decreased UI revenues. The crisis currently facing many State UI trust 
funds is unlike anything in the history of unemployment insurance. 
During the Great Recession, 36 States depleted their trust funds 
leading toward the ultimate cumulative borrowing of $51.2 billion from 
Federal general revenues to finance regular UI benefits.

    As a result of the economic impact of the pandemic, trust fund 
balances are beginning to rapidly deplete. At the end of 2019, the 
total trust fund balances in all States totaled $75.7 billion. This 
amount has dropped to $52.2 billion as of May 31, 2020. Since March 31, 
2020, eight States have seen their trust fund balance decline by more 
than 50 percent and another 21 States have seen trust fund balance 
reductions ranging from 25 percent to 50 percent.

    Adding to this concern, States have already collected approximately 
65 percent of their tax revenue for 2020. With the dramatic increase in 
weekly claimants, the outflow of benefits will far exceed the deposits, 
exacerbating the declining trust fund balances.

    To determine UI tax rates for employers in 2021, the level of the 
State's trust fund is a key variable in setting the applicable tax 
rate. This determination is usually done between July to September, so 
the status of each State's trust fund in the next few months will have 
significant bearing on next year's tax rate. With drastically lower 
balances, we can expect significant increases in UI tax rates in most 
States, which will hamper businesses as they try to bounce back 
economically and generally hinder our economic recovery.

    There are two options for Congress to consider in averting this 
impending trust fund crisis. First, Congress could enact legislation to 
forgive trust fund loans made to States this year or next. Providing 
loan forgiveness would help ensure employers avoid layoffs that would 
otherwise occur, due to an increase in employer UI taxes.

    Another option would be for Congress to direct a Federal payment to 
State UI trust funds, which would provide immediate support. Funds 
could be distributed to the States by using the formula process as done 
with administrative funding or a Reed Act (Pub. L. 83-567) 
distribution--this approach was utilized to address a rapid increase in 
unemployment after the 9-11 attack (Pub. L. 107-147 Section 209).
  3. administrative funding including need for funding for it systems
    In 2010, the week ending January 2nd, was the peak week of claims 
payments during the 24 months (May 2008 to April 2010) of the Great 
Recession (Figure 2). States paid a total of 12.1 million claimants 
with roughly 6.0 million in regular State UI claims, along with 5.6 
million claimants in Emergency Unemployment Compensation (EUC), a new 
program at the time. In addition, States had to add an additional $25 
Federal Additional Compensation (FAC) to each claim.


[GRAPHIC NOT AVAILABLE IN TIFF FORMAT]


    For comparison, last year for the week ending May 11, 2019, States 
paid a total of 1.6 million claimants. State workforce agencies' 
staffing levels reflected these lower claim levels. These reduced 
staffing levels were also a result of flat lined funding prior to the 
pandemic.

    In sharp contrast, the week ending May 16, 2020, States paid a 
total of 30.0 million claimants with roughly 18.9 million in regular 
State UI claims, along with 10.7 million claimants in Federal Pandemic 
Unemployment Assistance (PUA), a new national program. In addition, 
States were asked to add the FPUC $600 to each claim. These phenomenal 
increases in claims explain some of the extraordinary challenges States 
have faced in processing and paying UI claims during the pandemic.

    Through this crisis and the rising number of claimants and new 
programs, States have made significant changes in the way they operate 
their UI programs. States have waived work search and other 
requirements to ensure that individuals who have lost their jobs are 
not penalized by the pandemic. States have mobilized new call centers; 
hired, borrowed, and outsourced staff; and purchased new and/or 
modified existing IT systems. While the additional $1 billion funding 
provided to the States in the Families First Coronavirus Act has 
assisted States to meet the challenges of the CARES Act, there is more 
that needs to be done to manage the continued downturn and future 
recessions.

    UI Administrative funding continues to decline in real dollars 
relative to the growth in the number of claimants covered in the 
program. The administrative funding factors used to determine the 
actual costs of providing adequate funding levels for State operations 
remain largely unchanged since the mid-1980s. An example of this steady 
erosion in the funding is evident by a specific line in UI 
appropriation language which is particularly critical now, ``an 
additional $28.6 million shall be available for obligation for every 
100,000 increase in the AWIU level,'' a dollar amount which has 
remained unchanged since the mid-1980's. A simple inflation adjustment 
to the dollars per 100,000 claim increase would almost double the 
amount of marginal funding available to States to administer the 
program during the current COVID-19 period.

    Since the early 2000s States have been required to annually report 
to the USDOL an estimate of the funding levels they need to run an 
effective program. Because of budget and appropriation limits (outside 
of State control), the estimated funding levels have never been 
achieved, forcing States to constantly understaff and under resource 
their operations. This year-to-year underfunding has cumulatively 
affected States' abilities to make capital investments, specifically in 
IT resources.

    As Congress addresses the immediate need to provide additional 
funding for State UI operations, NASWA also recommends updating the 
basic methodology of the administrative UI funding process to ensure a 
strong UI system that will meet today's needs as well as the needs of 
potential further recessions.

    In closing, as Congress considers extending or adding new programs, 
NASWA and our member States look forward to working with you to ensure 
that integrity is maintained and that any extensions or new programs 
for claimants are delivered in an efficient and timely manner.

    Thank you for providing this opportunity to testify on the three 
important issues of Promoting Integrity, Trust Fund Solvency and 
Administrative UI Funding. NASWA looks forward to continuing to work 
with the committee to address the needs of our member States, job 
seekers, and employers during these challenging times.

                                 ______
                                 
         Questions Submitted for the Record to Scott B. Sanders
                 Question Submitted by Hon. John Thune
    Question. Unemployment offices in States across the Nation continue 
to be overwhelmed with unemployment claims, even as the number of 
unemployment claims level off. In addition, States' unemployment 
systems are dated. These two factors likely make additional changes to 
unemployment programs potentially overly burdensome on unemployment 
agencies.

    Can you speak to the general capacities of State unemployment 
systems and to what degree they may be able to accommodate further 
programmatic changes in terms of the administration of unemployment 
compensation?

    Answer. The challenges States faced in implementing the CARES Act 
programs were driven by several factors:

        Staffing and resources were at the lowest level in decades, 
due to historically low unemployment rates before the pandemic.
        The sudden increase in demand was unlike any other ever in the 
history of the UI program.
        The CARES Act created three new programs, all of which were 
immediately effective. And given the lead time for USDOL to issue 
guidance, essentially retroactively.
        Annual appropriations for UI Administrative funding have been 
in long term decline since the 1980s, resulting in inadequate 
investments in the modernization of UI information technology systems.

    If States were asked to implement further programmatic changes, 
similar challenges would result, but Congress could help minimize those 
struggles by:

        Enacting legislation with a prospective implementation date, 
providing States with an adequate lead time before any changes are 
effective.
        Designing the legislation to meet policy goals with minimal 
change to existing programmatic features and without implementing 
additional new programs.
        Providing a significant new infusion of UI Administrative 
funding in the next stimulus package.

             Questions Submitted by Hon. Patrick J. Toomey
    Question. In Pennsylvania, the State unemployment agency has 
discussed the difficulties of administering the PUA system in 
particular. In addition to the initial lack of guidance, this program 
is particularly ripe for fraud, given that claimants can self-certify 
their own eligibility and that they don't have to provide up-front 
evidence of prior income.

    Are the problems with administering PUA in particular due to 
primarily the inherent structure of the program (for example, the fact 
that it is self-certifying), or could they be largely resolved by a 
modernized IT system?

    Answer. There is an inherent conflict in the necessity to pay PUA 
benefits quickly and the ability of States to validate information 
provided by claimants. With the regular State UI program, States have 
access to employee wage records submitted by employers to validate 
earnings. States have also developed processes and other informational 
channels, such as separation notices to employers and the Directory of 
New Hires, to validate a claim. Wage records and many of the other 
resources used to validate regular UI claimants do not exist for self-
employed PUA claimants.

    This is true whether a State has a modernized system or not.

    Question. I understand that NASWA has set up an Integrity Data Hub, 
to ``allow participating UI agencies to crossmatch UI claims against a 
database of information associated with potentially fraudulent claims 
or overpayments.''

    Do you believe that States cross-checking benefit claims with this 
database could effectively reduce improper payment rates?

    What other steps can States take to prevent large-scale fraud, to 
ensure that funds go to where they are most needed?

    Answer. NASWA's Integrity Data Hub is a proven solution in helping 
States identify and prevent fraudulent benefit payments. Even with the 
information from the Integrity Data Hub, States must have the necessary 
trained staff to act on the crossmatches and other information they 
receive from the system. If all States were fully participating in the 
Integrity Data Hub and acting on the information provided, we believe 
it would provide significant reductions in UI fraud.

    The large-scale fraud occurring in the UI and PUA program is mainly 
due to identity theft. Some steps States can take are:

        Discontinue direct deposit and require claimants to receive a 
State issued debit card. This is not a popular option but a significant 
portion of UI fraud is occurring through direct deposit.
        Invest in identity verification tools--The Integrity Data Hub 
will begin providing identity verification for all participating States 
in July through a NASWA partnership with Experian. There is no cost to 
States to participate.
        There are many Federal agencies (IRS, SSA, HHS, FEMA) that all 
have data on prior fraudulent activity in their programs, yet few if 
any of those agencies share that information. For example, the IRS 
maintains data on bank accounts that have been used to receive known 
fraudulent tax returns. Making these bank account numbers available to 
other agencies for real time crossmatching would thwart the efforts of 
fraudsters identified by the IRS from exploiting other Federal programs 
as well. This could be done without sharing the heavily protected PII 
of tax payers. Federal legislation that requires these agencies to 
share specific and relevant data, similar to how the Integrity Data Hub 
functions for State UI agencies, is a much needed step in fraud 
prevention.

                                 ______
                                 
                 Questions Submitted by Hon. Todd Young
                               ui systems
    Question. Secretary Scalia spoke at length in his testimony about 
how ``one of the greatest challenges in the UI system is the 
information technology infrastructure used by States to administer 
their programs''--which was primarily why the $600 ``plus up'' in the 
CARES Act was set at a flat rate. But, these system challenges aren't 
new--these same system issues occurred back during the Great Recession. 
Ms. Townsend, you also describe the complexities with Iowa's legacy 
system in your testimony.

    What system changes do you think would help States be better 
prepared for the long term in case we ever face a situation similar to 
COVID-19 again?

    Answer. The information technology infrastructure challenges States 
have faced during COVID-19, and during the Great Recession, are the 
result of a decades-long underinvestment in the UI program. Since the 
early 2000s, States have been required to report annually to DOL an 
estimate, using a DOL-developed model, of the funding levels necessary 
to run an effective program. Due to Federal budget and appropriation 
limits, those funding levels have never been achieved, forcing States 
to constantly understaff and under-resource their operations. This 
chronic underfunding has cumulatively affected States' ability to make 
capital investments, including information technology.

    With adequate investment, State UI information technology systems 
could be modernized, componentized, shared, cloud-hosted, and scaled 
for future events. These systems would have two critical features often 
lacking today: flexible functionality to allow States to implement 
quickly new programs that Congress inevitably enacts with no advance 
implementation timeline in response to economic events; and scalability 
to allow for rapid increases in workload.
                        work search requirement
    Question. Most States, including Indiana, waived job search 
requirements in order to encourage people to stay home and prevent 
further spread of the virus. But, now as States start to re-open, 
employers are recalling their workers or hiring additional staff to get 
their businesses up and running--and are having difficulty doing so 
because of the additional UI plus-up.

    At what point will be it reasonable for workers to be expected to 
search for work as a condition of receiving unemployment?

    How will that happen?

    Answer. States are having discussions now about when and how to 
reintroduce work search requirements. The reinstatement of work search 
requirements will vary State by State; most States waived work search 
requirements by executive order.
                  $600/ui systems--future legislation
    Question. Some recent proposals in the Senate have included 
triggers and other mechanisms to continue the $600 plus-up post-July. 
Based off what was described in many of your testimonies about the 
complexities surrounding the rigidity and age of State UI systems.

    Is it even possible for States to implement these types of 
proposals?

    If so, how long would claimants have to wait until those States get 
those systems up and running?

    Answer. States will face challenges in implementing a modified 
Federal Pandemic Unemployment Compensation (FPUC) program that differs 
significantly from the existing FPUC program created by the CARES Act. 
The length of time to implement will depend on the factors involved 
with the new method.

    Proposals that aim at tailoring the ``plus-up'' to individuals' 
earnings will prove challenging. There are two main factors--
availability of data, and individualized calculations. State UI 
programs base eligibility calculations on quarterly wage records that 
are reported by employers well after the quarter has ended--thus there 
is a lag in data. The data is an aggregate wage total for the quarter--
not hourly and not weekly. Requiring States to gather new data from 
workers or employers will substantially slow implementation as compared 
to a system based on information already within the agency. Any program 
changes involving individualized calculations will also require 
programming and testing.

    The current FPUC program is also payable to recipients of Pandemic 
Unemployment Assistance (PUA). The rubric and data available for PUA 
implementation vary significantly from regular UI, with many claimants 
eligible for minimum benefits without proof of earnings. New processes 
would need to be adopted and capacity created to receive and analyze 
earnings data for self-employed or gig workers.

    If Congress chooses to implement further programmatic changes, we 
suggest also including the following measures to smooth its 
implementation:

        Enact legislation with a prospective implementation date, 
providing States with an adequate lead time before any changes are 
effective.
        Design the legislation to meet policy goals with minimal 
change to existing programmatic features and without implementing 
additional new programs.
        Provide a significant new infusion of UI Administrative 
funding in the next stimulus package.

                                 ______
                                 
                 Questions Submitted by Hon. Ron Wyden
                        state it infrastructure
    Question. We know that in the years leading up to this crisis, many 
States underinvested in their UI systems. It is my understanding that 
most States need more than just IT patches. They need complete 
overhauls of their systems. Is that something they will be able to 
accomplish while they are flooded with an unprecedented number of 
claims?

    Looking to the future, what do States need from the Department of 
Labor and from Congress to modernize their systems to more efficiently 
administer benefits?

    Is it worth considering whether it would be more efficient to have 
the Department of Labor develop a modern benefits administration system 
that all of the States could interface with to administer benefits? If 
so, what features should such a system have?

    Answer. While many States have invested State revenue and other 
funds in their UI operations, State UI systems are predominantly 
federally funded. The information technology infrastructure challenges 
States have faced during COVID-19, and during the Great Recession, are 
the result of a decades-long underinvestment in the UI program. Since 
the early 2000s, States have been required to report annually to the 
USDOL an estimate, using a USDOL-developed model, of the funding levels 
necessary to run an effective program. Due to Federal budget and 
appropriation limits, those funding levels have never been achieved, 
forcing States to constantly understaff and under-resource their 
operations. This chronic underfunding has cumulatively affected States' 
ability to make capital investments, including information technology.

    With adequate investment, State UI information technology systems 
could be modernized, componentized, shared, cloud-hosted, and scaled 
for future events. These systems would have two critical features often 
lacking today: flexible functionality to allow States to implement 
quickly new programs that Congress inevitably enacts with no advance 
implementation timeline in response to economic events; and scalability 
to allow for rapid increases in workload.

    Many States have modernized their UI information technology, but 
many more States still face that effort. UI system modernization is 
challenging even when there is not the largest workload in the history 
of the program. States need an investment concomitant with the 
cumulative, decades-long underfunding.

    Building a federalized benefits administration system for the UI 
program would be a very significant challenge for the USDOL to 
undertake, given the fundamental nature of the State-Federal 
partnership inherent in the UI program. Simply put, the variation in 
State laws is so vast that trying to build a single system to handle 53 
different sets of rules would preclude any timely implementation of 
such a system.
          extending federal pandemic unemployment compensation
    Question. There has been a lot of debate about what is going to 
happen to the $600 Federal Pandemic Unemployment Compensation after it 
expires on July 31st. I'm concerned that if Congress waits until the 
eleventh hour to decide what's going to happen on August 1st, it will 
put States in a really difficult situation, as they'll have to make 
changes to their systems overnight.

    How important is it for States to have certainty about what is 
going to happen after the end of July? Are there going to be additional 
delays in processing claims and getting benefits out if Congress waits 
until the last minute to decide what to do?

    Answer. If Congress acts to extend the FPUC program after July 
31st, and that action makes changes to the program--even if those 
changes seem insignificant--there will be a delay affecting millions of 
claimants. We suggest, regardless of what policy changes Congress 
chooses to make, if FPUC or FPUC-like payments are to be made after 
July 31st, Congress should make the new or changed program effective at 
some future date, to allow States time to implement the changes, with 
FPUC as originally set forth in the CARES Act extended from August 1st 
to that new effective date.
              workers with wage and self-employment income
    Question. Workers who are eligible for regular unemployment 
compensation cannot claim PUA. This has led to some workers who lost 
both wage income and self-employment income only being able to claim 
regular unemployment compensation even when their PUA benefit would be 
bigger. Would it be administratively feasible to allow claimants to 
claim the greater of their UI and PUA benefits, or to have PUA make up 
the difference between the regular UI benefit amount and the PUA 
benefit amount? Why or why not?

    Answer. States would face a significant administrative challenge to 
allow workers to choose between PUA and UI, or to augment UI with PUA. 
Setting aside the fact that calculating both benefit amounts for each 
claimant would be an enormous effort, the necessity to contact each 
individual, provide the choice, register the worker's choice, and 
effect that choice would cause gridlock in State UI customer service 
channels--whether online or by telephone.

                                 ______
                                 
             Questions Submitted by Hon. Michael F. Bennet
    Question. This crisis has shown how painfully out-of-date our 
unemployment insurance system is. We have States tweeting out desperate 
calls for people who can program in a coding language that is 
practically dead. According to a recent Bloomberg article, about one-
third of people who are eligible have not yet received their 
benefits.\1\
---------------------------------------------------------------------------
    \1\ https://www.bloomberg.com/news/articles/2020-06-02/one-third-
of-america-s-record-unemployment-payout-hasn-t-arrived.

---------------------------------------------------------------------------
    Please provide separate answers to each of the following questions.

    How much administrative funding would Congress need to appropriate 
to build a 21st-century, state-of-the-art unemployment insurance 
system?

    Answer. During the hearing I shared that NASWA is advocating for an 
additional infusion of administrative funding in the amount of $500 
million to $1 billion annually. We have also supported a structural 
shift in the structure of the administrative funding system for UI. 
Because of budget and appropriation limits, outside of State control, 
estimated funding needs have never been achieved forcing States to 
constantly under resource their operations. This year-to-year 
underfunding has a cumulative effect, which has seriously reduced 
States' ability to make capital investments, specifically in IT 
resources.

    We would need additional information on building a state-of-the-art 
UI system to calculate the estimated cost on either a State-by-State 
basis or a national system and rules for adoption.

    Question. Are you aware of any States that by the end of July 2020 
will be prepared to--instead of administering a flat additional benefit 
like the $600--replace 100 percent of wages for all workers who 
continue to be unemployed or remain on furlough, given the ongoing 
health risks, lack of child care, and lack of available jobs? How many 
States would be able to administer such a wage replacement regime?

    Answer. Our Association does not have information on the ability of 
each individual State to adjust their systems in this way. We do know, 
however, that the majority of our members have expressed that such a 
change would be extremely challenging.

    Question. How much money and time would it take for every State to 
have a system that could handle adjusting wage replacement rates, 
rather than adding a fixed payment like the $600 top-up?

    Answer. We do not have information on the cost of such a change or 
the time for each State to make these adjustments. It would be 
significant.

    Question. In other words, if we extended a flat benefit beyond July 
to allow for additional time for States to upgrade their systems, how 
long should we extend that flat benefit to ensure that States have 
enough time to transition to a wage replacement regime?

    Answer. We do not have data in response to this request. If the 
calculation of wage replacement involved data already available to the 
State workforce agency, then that would be preferred over a calculation 
that would require information not on hand. The current FPUC program is 
also payable to recipients of Pandemic Unemployment Assistance (PUA). 
The rubric and data available for PUA implementation vary significantly 
from UI and would provide an additional challenge to States.

                                 ______
                                 
               Prepared Statement of Hon. Eugene Scalia, 
                     Secretary, Department of Labor
    Chairman Grassley, Ranking Member Wyden, and members of the 
committee, thank you for the invitation to testify today.

    Although last week's jobs report for May was extremely encouraging, 
we know that the coronavirus has had an immense impact on American 
workers. Fortunately, President Trump and this Congress responded 
swiftly, first with the Families First Coronavirus Response Act (FFCRA) 
and then--less than two weeks later--with the Coronavirus Aid, Relief, 
and Economic Security (CARES) Act. The CARES Act created both a 
temporary $600 weekly unemployment insurance benefit on top of the 
benefit provided by the States, and a new unemployment benefit 
available to independent contractors and the self-employed. FFCRA 
created a $1 billion fund to assist States with emergency UI program 
administration.

    These two enhancements--the CARES Act benefit, and FFCRA's 
assistance to the States--have made an immeasurable difference in the 
lives of countless Americans put out of work by the public health 
measures necessitated by the virus. Moreover, these enhancements were 
accompanied by other path-breaking programs passed by Congress and 
signed into law by President Trump: the first Federal paid sick leave 
benefit for the private sector, the Paycheck Protection Program to help 
small businesses contend with shutdowns and keep employees on payroll, 
and direct $1,200 Economic Impact Payments for individuals and 
families. These efforts have helped to sustain American workers and 
position the country for a vibrant economic recovery.

    I am proud of the efforts of the staff at the U.S. Department of 
Labor to implement the UI provisions of FFCRA and the CARES Act, and 
welcome the opportunity to speak to the committee about the steps we 
have taken and the path ahead.
             overview of the unemployment insurance system
    The Nation's unemployment system is a Federal-State partnership 
designed to provide benefits to wage-earning workers who face 
unemployment through no fault of their own. The system provides direct 
benefits to cover workers' basic financial needs, and requires that the 
recipients be able and available for work, and seeking work, during the 
period of unemployment. Ordinarily the benefits are funded almost 
entirely by State taxes on employers, and are tied to workers' previous 
wages and attachment to the labor force.

    Each party to this Federal-State partnership has distinct and 
complementary responsibilities. States are responsible for ensuring 
that their unemployment compensation laws conform to the requirements 
of Federal law; State laws vary widely within those Federal parameters. 
It is the States that administer the program, on a State-by-State 
basis, and States are responsible for maintaining the solvency of their 
UI trust funds. The Federal Government is responsible for verifying 
that State laws and operations conform to Federal law, for calculating 
and providing funding for State program administration, and for 
maintaining the Federal UI trust fund.

    One of the greatest challenges in the UI system is the information 
technology infrastructure used by States to administer their programs. 
Fifty-one different systems are used by the States; the average age of 
these systems is 28 years. Many States' systems are more than 40 years 
old. These cumbersome, outdated systems inhibit the collaboration and 
data-sharing associated with sophisticated program management. Although 
some States have made the investment needed to maintain their systems, 
few have been able to implement much-needed overhauls, and even fewer 
have installed new and more nimble systems.

    As members of this committee are aware, the rigidity of these 
systems was a principal reason that in the CARES Act, the $600 ``plus-
up'' was set at a flat rate, without regard to a worker's prior income. 
The computer systems' age and rigidity are also a principal reason many 
States were delayed in beginning to deliver all the CARES Act benefits.
          the labor department's assistance with unemployment 
                     insurance during the pandemic
    In late February of this year--less than 4 months ago--few of us 
were focused on the unemployment insurance system. The unemployment 
rate was tied with a 50-year low, and more than 450,000 jobs had been 
created in the first 2 months of the year. More than 7 million jobs had 
been created since President Trump took office. But in February, the 
Labor Department's Employment Training Administration (ETA) was already 
in discussions with the States of Washington and Maine on measures 
those States could take to address challenges presented by COVID-19. In 
the ensuing weeks, ETA (and other components within the Department) 
were intensely engaged on a range of tasks to help American workers 
obtain unemployment benefits:

        On March 12th, the Department issued Unemployment Insurance 
Program Letter (UIPL) No. 10-20, outlining flexibilities the States had 
to respond to COVID-19 impacts. This document--which was issued before 
the paid leave provisions in FFCRA were enacted--outlined ways that UI 
benefits could legitimately be paid to workers kept out of work by 
their illness or the illness of a family member. For example, the 
Department clarified how States could interpret the ``able to work'' 
requirement in a manner that allowed workers affected by COVID-19 to 
remain eligible for benefits. Five days after issuing this innovative 
guidance document, the Department held an explanatory webinar for State 
agencies--800 State workforce leaders participated.

        On March 22nd, UIPL No. 13-20 provided guidance on the 
additional flexibilities granted in FFCRA. Among other things, States 
were provided the option to ``non-charge'' employers for unemployment 
related to COVID-19, since the pandemic had not been caused by 
individual employers. To date, all 53 States and Territories have taken 
advantage of at least one of the flexibilities in this document.

    FFCRA implementation. With the passage of FFCRA on March 18th, the 
Department received new resources to support States' unemployment 
response. The same day the law was enacted, the Department relaxed some 
reporting requirements. Four days later, the Department published a 
UIPL guidance document telling States how to access FFCRA's emergency 
administrative funding. As soon as States certified that they had met 
the conditions established by Congress in FFCRA, the Department quickly 
provided the States' respective allotments from the $1 billion in UI 
administrative funding provided by the Act.

    Satisfying the statutory conditions in FFCRA was not always an easy 
process for States--for some, it required special legislation--but by 
April 23rd, all States had received their first emergency grant 
allotment, and by May 15th, all States had received both allotments. 
These FFCRA funds have been instrumental in enabling States to add 
staff quickly and to address technology problems exacerbated by the 
immense surge in COVID-19-related claims.

    CARES Act implementation. President Trump signed the CARES Act on 
Friday, March 27th. By the next day, the Department had obtained signed 
agreements to participate in the Act's programs from all States and 
Territories with UI programs. Because the effective date of certain 
CARES benefits hinges on the date of the State's agreement, this quick 
coordination with the States helped ensure maximum coverage for 
eligible workers.

    In the weeks following, ETA continued to work as swiftly as 
possible to position States to make UI payments to the millions of 
workers displaced by COVID-19:

        On April 4th, the Department issued the first guidance 
document on implementation of the $600 ``plus-up'' payment.
        The first States began issuing the $600 benefit payments on 
April 5th and 6th.
        By April 7th, the Department and the U.S. Treasury had 
established all the proper funding channels for States to draw down 
funds to provide CARES benefits.
        As of April 28th, all States were paying the CARES Act $600 
increase in unemployment benefits. And as of June 5th, all but one 
State is paying benefits under the Pandemic Unemployment Assistance 
(PUA) programs for independent contractors and the self-employed. The 
program for those who have exhausted other benefits--Pandemic Emergency 
Unemployment Compensation (PEUC)--has been implemented by 38 States.

    Labor Department staff have worked tirelessly since mid-March to 
assist States in understanding the CARES Act programs and in making 
benefit payments to eligible recipients. In nine weeks between mid-
March and mid-May, the Department issued 19 separate UIPL guidance 
documents directly related to COVID-19. By comparison, in 2019 the 
Department issued a grand total of 19 UIPLs the entire year--and of 
course, the 2020 UIPLs to date concerned novel and often complex 
issues.

    The Office of Unemployment Insurance has hosted fourteen webinars 
to provide direct implementation support to State unemployment 
insurance directors. Often, hundreds of State officials participated. 
On these calls, Department staff provided guidance on needed 
adjustments to State laws, best practices for implementing COVID 
flexibilities, and measures to protect program integrity. We will 
continue to host webinars as new guidance is published.

    In addition to the webinars, Assistant Secretary for Employment and 
Training John Pallasch has convened State workforce agency leadership 
and UI directors multiple times to discuss program integrity, 
innovations in identifying and stopping fraud, and to respond to 
questions raised by State officials. I have joined the Assistant 
Secretary's calls with State UI directors twice, in addition to 
arranging calls with more than 20 Governors since mid-March to discuss 
challenges and questions they were confronting, and to let them know of 
the resources the Department was providing. Last week I sent a letter 
to all Governors reminding them of our shared, Federal-State 
responsibility for program integrity. And last month, the Department 
Inspector General and I sent a joint message to all Labor Department 
personnel underscoring the importance of ethical and responsible 
conduct, particularly in connection with the large new CARES programs.

    Altogether, Labor Department staff and I have addressed State, 
territory, local and tribal workforce leaders, the National Governors 
Association, the National Association of Counties, chambers of 
commerce, employers, trade associations, mayors, city and municipal 
employees, State legislators, and county commissioners among others. 
Department staff have also spent countless hours collaborating and 
problem-solving with the Department's Office of the Inspector General, 
U.S. Treasury, Small Business Administration, the Office of Management 
and Budget, and other Federal agencies. And of course, my staff and I 
have spoken periodically with members of this committee and your staff 
regarding CARES and FFCRA implementation.

    Payments by the States. We have also done what we can to assist 
States with their dated computer technology, enlisting the Department's 
Chief Information Officer and the U.S. Digital Service to provide IT 
support to individual States. (The USDS is a team of technologists in 
the Executive Office of the President that provides targeted support 
across the Federal Government.) To date, more than ten States have 
followed up with the Department and USDS on this offer of assistance. 
Projects have included updating public-facing website design, resolving 
technical database configuration problems, and identifying ways to use 
automation to handle massive claims volume.

    The Department also swiftly addressed an IT challenge that arose on 
the Federal side, when the gigantic surge in claims caused difficulties 
with the Interstate Connection (ICON) network, a national data system 
used by States to process claims. The Department funded and executed 
the necessary system upgrades over the weekend of April 4th and 5th, 
just days after the system difficulties were identified. Since the 
upgrades, ICON has handled the increased traffic with no system 
performance problems.

    For all the efforts of staff at the Department and in State UI 
offices across the country, we are acutely aware that the States' 
difficulty in timely processing claims and providing CARES Act benefits 
has caused frustration and hardship for countless Americans 
unexpectedly forced to rely on the UI system. No system could have been 
fully prepared for unemployment filings that for 2 weeks in a row, were 
nearly 10 times higher than the previous all-time high. State 
unemployment offices were lightly staffed, as befitted a period that 
had been characterized by record low unemployment, yet suddenly had to 
respond to simultaneous challenges: unprecedented volume and 
implementation of entirely new programs. The information available to 
the Department does indicate that by the end of May, States had turned 
the corner in addressing their backlog of claims. We will continue to 
do everything within our capacity to assist this. The experience of the 
last few weeks has also confirmed beyond doubt the need to modernize 
the information technology systems States use to pay unemployment 
benefits.
                       ensuring program integrity
    Guarding against fraud is essential to the unemployment insurance 
system. UI fraud takes many forms. Employers sometimes establish 
fictitious accounts to enable fraudulent claims against the accounts, 
or take actions to avoid tax liability. Claimants sometimes falsely 
certify their availability or ability to work under State law, refuse 
offers of suitable employment while continuing to certify eligibility, 
or collect full benefits without accurately reporting wages or other 
income. And we are seeing networks (including domestic and foreign 
transnational organizations) engage in systematic fraud using false and 
stolen information and unwitting and witting third parties.

    Fraud in the UI system has been of concern to the Department and to 
Congress for many years. Both the Improper Payments Elimination and 
Recovery Act (IPERA) of 2010 and its successor, the Payment Integrity 
Information Act of 2019, require that covered agencies and programs 
maintain an annual improper payment rate of 10 percent or less. 
Lowering the improper payment rate has required ongoing commitment and 
partnership between the Department and the States, with particular 
attention to eleven States that have had especially high rates of 
improper payments. For the first time in 9 years, the national improper 
payment rate was under 10 percent for the four quarters ending December 
31, 2019.

    The circumstances since March of this year, however, have presented 
a substantially heightened risk of fraud and improper payments. The 
Labor Department, States, employers, and claimants will all have 
important roles in ensuring that billions of American taxpayer dollars 
are not now lost through fraud, waste, or mismanagement.

    State implementation. As the CARES Act has been implemented, the 
Department has become aware of practices in some States that are 
virtually certain to result in substantial improper payments. One State 
had omitted any requirement that PUA recipients attest how they meet 
the COVID-19 eligibility requirements, and had set a flat rate for PUA 
weekly payments without regard to previous earnings.

    Several States asked to waive, and one did briefly waive, the 
requirement that claimants provide weekly or bi-weekly certification of 
their eligibility for unemployment; this makes it highly likely that as 
some claimants returned to work, they would continue receiving State UI 
benefits and the $600 Federal ``plus-up'' without reporting their 
reemployment and weekly earnings.

    As these changes, proposed or implemented, became known to the 
Department, we promptly contacted the States and engaged them in 
vigorous discussions to ensure adherence to the laws' requirements. 
Where appropriate, we have required corrective action plans, including 
retroactive correction, and have provided ongoing technical assistance 
to State UI staff. The OIG's advisory report--``CARES Act: Initial 
Areas of Concern Regarding Implementation of Unemployment Insurance 
Provisions''--has also been useful in highlighting to the States some 
of these programmatic concerns.

    Third party fraud. A number of States are facing challenges from 
sophisticated domestic and international fraud rings that attack 
States' online systems to illegally claim benefits using stolen or 
synthetic identities and using technology, including ``bots,'' to 
rapidly file hundreds of claims. The Department is working with the 
States, the Department's Inspector General's Office, and the States 
through the UI Integrity Center of Excellence to repel these attacks. 
We have provided the OIG access to critical State UI data, including 
fraud alerts from States through the Integrity Center's Integrity Data 
Hub, and are working to identify and share best practices with the 
States. New functionality has been added to ICON to enable States to do 
the same cross-matching for the CARES Act UI programs that is done for 
regular UI programs. The Department has also launched a UI fraud page 
on its website to encourage the public to report fraud.

    Work search requirements. Some observers, and some members of this 
committee, have expressed concern that the generous $600 CARES Act 
benefit may deter recipients' return to work as businesses reopen. 
Recent analyses, including by the University of Chicago and by this 
administration, found that more than two-thirds of workers will receive 
unemployment benefits greater than their prior weekly wages, and that 
approximately 20 percent of unemployed workers will receive benefits 
double their pre-layoff wages. This is consistent with data in the 
Congressional Budget Office report sent to Chairman Grassley last week.

    Federal and State unemployment laws contain numerous requirements, 
including some described above, squarely calculated to ensure that 
claimants choose work over unemployment benefits. It is a cornerstone 
of the system that workers who refuse offers of suitable employment 
without good cause are ineligible to receive unemployment 
compensation--and an offer to return to a job that a worker left weeks 
ago would typically be an offer of suitable employment. Throughout its 
administration of the CARES Act programs, the Department has 
underscored these requirements in its discussions and communications 
with the States, including in a letter I sent the Governors last week.

    Of course, the very reason for these firm legal requirements is 
that, while most workers prefer work, there will always be some who 
will not energetically seek employment when unemployment benefits are 
available. The greater the unemployment benefit, the greater the 
incentive for that handful of workers to remain out of the workforce. 
For these reasons, and as our economy re-opens, it will be critical for 
States to use all tools at their disposal to help workers make the 
transition from unemployment back into the workplace. This includes 
making clear to employers how to submit documentation if they believe a 
UI claimant has refused an offer of suitable work, and how to verify 
each week that PUA recipients continue to be unemployed due to at least 
one statutory COVID-19 criterion.

    The CARES Act unemployment benefit was an extraordinary benefit for 
the extraordinary situation that American workers began to confront in 
March. Through shut-down and stay-at-home orders, governments across 
the country were temporarily closing businesses and barring millions of 
workers from gainful employment. The $600 CARES plus-up was intended to 
make these workers whole, as near as was possible given the very 
substantial limitations of the State UI systems described above. 
(During the ``Great Recession,'' a Federal plus-up was provided of $25 
per week.) The CARES benefits were intended to be temporary, and will 
expire at the end of next month, by which point we expect the economy 
to be deep into the process of reopening, with shut-down orders ended 
and--Friday's jobs report confirms--millions of Americans freed to 
return to work. Unemployment benefits will still be needed past that 
date, of course. But the circumstances that originally called for the 
$600 plus-up will have changed; policy will need to change as well.
               supporting workers in their return to work
    The subject of this hearing is unemployment insurance, but of 
course, unemployment insurance is never the most preferred outcome. Our 
first goal for workers is work--good jobs. And the first prerequisite 
for that is a thriving business base.

    Our economy was achieving both those goals at a spectacular pace 
before the coronavirus. Unemployment was at a 50-year low, jobs were 
being created at a far higher rate than projected, and wages were 
rising, particularly for lower-wage workers. As businesses thrived and 
the stock market soared in 2019 and earlier this year, the benefits to 
workers grew deeper and broader, with ever-lower unemployment and 
increased opportunities for populations that historically have 
difficulty in the job market, including Americans with disabilities and 
those without a high school degree.

    Our recent strong economy means that now, unlike any other economic 
downturn in the country's history, we have the good fortune of not 
having to reconsider or jettison the economic policies that preceded 
the downturn. The policies were working--phenomenally. The problem was 
a virus, not economic policy.

    Accordingly, as we consider now how to help workers, we should 
pursue the measures the Trump administration already was using 
successfully to lift Americans out of unemployment. Chief among these 
are tax relief and eliminating unnecessary regulatory burdens. These 
were the cornerstones of an economic program that, while disputed at 
the time it was adopted, led to the undeniably exceptional job market 
we enjoyed until March. Similar measures to spur investment and job 
growth should be part of any stimulus plan going forward. That is why, 
last month, the President signed his Executive Order on Regulatory 
Relief to Support Economic Recovery.

    As we speak of returning workers to work, job training and State 
workforce development systems are also naturally part of the 
discussion. Here again, lessons learned from our recent booming economy 
should guide us.

    One such lesson is the effectiveness of involving business in 
providing worker training. The men and women running businesses know 
better than educators or the government what skills will be most needed 
in the workforce; the more that businesses help guide the training we 
provide workers, the more likely that training is to lead to valuable, 
long-term employment. That is the reason for the success of the 
apprenticeship training model, which enjoys exceptional bipartisan 
support. Apprenticeships allow employers' anticipated needs to steer 
the investments made in worker training, with the result that workers 
acquire skills for which there is immediate demand.

    For similar reasons, it makes sense to give businesses a role in 
determining the shape that apprenticeship programs take. The 
Department's Registered Apprenticeship Program has been effective at 
supporting apprenticeships in certain industries, such as construction. 
But workers in other sectors--like advanced manufacturing and 
cybersecurity--can also benefit from alternative apprenticeship models 
that provide high-quality work-based training. That is the purpose of 
the rule the Labor Department adopted in March for ``Industry 
Recognized Apprenticeship Programs,'' which gives businesses and 
business groups, educators, labor unions, and others the ability to 
recognize apprenticeship programs that do not necessarily conform to 
all the criteria of the Department's registered program, but which 
effectively equip workers with the skills in demand at the growing edge 
of our economy. These programs can be an attractive option for 
unemployed workers reentering the workforce; they warrant congressional 
support alongside DOL's Registered Apprenticeship Program.

    Another lesson of recent years that should guide investment in 
worker training is the convergence of the roles played by our workforce 
and educational systems in preparing Americans for productive careers. 
In helping unemployed Americans return to work, the different 
components of the public workforce system should act in coordination 
and partnership--as One Workforce. The entire lifecycle of an American 
worker's needs--from career search to unemployment insurance to 
training in new skills--should be supported by an integrated service 
delivery system. The need now is great for States to think about how to 
consolidate, integrate, and mobilize the disparate pieces of their 
workforce investments into a coherent workforce continuum. Any new 
Federal funding should recognize the value of this approach.
                               conclusion
    One of the hallmarks of our Nation's experience with the 
coronavirus has been rapid change. Initially, that meant rapid 
deterioration--in a single month we went from record-low unemployment 
to record-high unemployment filings. But now, as the May jobs reports 
illustrates, the rapidity of that change can be change for good. The 
Department of Labor remains focused on helping deliver CARES benefits 
to eligible workers. At the same time, we will work intensely with 
States to help workers make the transition from unemployment back to 
the workforce and toward the vibrant economy we enjoyed just weeks ago.

                                 ______
                                 
        Questions Submitted for the Record to Hon. Eugene Scalia
                Questions Submitted by Hon. Pat Roberts
    Question. Are there better ways to help people get back into the 
workforce other than extending the additional $600 provision that was 
included in the CARES Act?

    Answer. Congress passed the Coronavirus Aid, Relief, and Economic 
Security (CARES) Act as the U.S. economy was shutting down. The $600 
weekly payment was an important, extraordinary measure to support 
workers who in many instances were being prohibited from earning a 
living as a result of necessary public health measures put in place by 
States and locales. A study by the University of Chicago indicates that 
more than two-thirds of workers receiving benefits under the CARES Act 
have seen their wages replaced at rates above 100 percent, with some 
low-wage workers experiencing replacement rates above 200 percent 
(https://bfi.uchicago.edu/working-paper/2020-62/). The Congressional 
Budget Office, in response to a query by Chairman Grassley, has 
reported that if the $600 plus-up were continued past July, five-sixths 
of the covered workers would receive higher payments through 
unemployment than by working, resulting in a more elevated unemployment 
rate than would occur otherwise. Given these circumstances, Congress's 
decision to sunset the $600 plus-up at the end of the month was 
appropriate. Unemployment benefits will continue to be important after 
July, but as the economy re-opens and jobs return, it will be 
appropriate to take a different approach than taken in March as the 
economy was closing. The Department is available to work with Congress 
to fashion the approach that best support workers and economic growth.

    Question. Do you believe that extending the $600 provision would 
incentivize people to remain unemployed due to their UI checks being 
higher than a previous paycheck?

    Answer. Most Americans would prefer to have a job than to be 
dependent on unemployment benefits. As the Department has repeatedly 
emphasized in guidance, moreover, failure to accept suitable employment 
when offered, including when an employer has called a worker to return, 
typically should result in the worker being determined ineligible for 
future benefits. That said, studies of unemployment insurance benefits 
indicate that some number of workers do elect to remain on 
unemployment, even when suitable work does become available. This 
disincentive to work must be kept in mind when structuring an 
unemployment program, and individuals should not receive more in 
unemployment benefits than they were paid while working. The Department 
is available to work with Congress on potential strategies.

    Question. Which job sector has been the hardest hit, to date, since 
the start of this pandemic?

    Answer. Total nonfarm employment declined by a net 14,661,000 
employees between February and June 2020. Among the major industry 
sectors, the leisure and hospitality sector has lost 4,827,000 jobs 
over that same period. Within this sector, food services and drinking 
places lost a net 3,131,000 jobs, arts, entertainment, and recreation 
lost a net of 909,000 jobs, and accommodation lost a net of 786,000 
jobs. Professional and business services lost a net of 1,830,000 jobs. 
Within this major sector, administrative and waste management services 
lost a net of 1,299,000 jobs. Education and health-care services lost a 
net of 1,814,000 jobs, with a net loss of 904,000 jobs in health care, 
many as a result of postponement of elective surgery and non-COVID-19-
related dental and medical appointments. Within government, State and 
local governments lost a net of 1,487,000. Retail trade lost a net of 
1,273,000 jobs. Manufacturing lost a net of 757,000 jobs, of which 
489,000 were lost in durable goods manufacturing. Other services lost a 
net of 752,000 jobs.

                                 ______
                                 
                 Questions Submitted by Hon. John Thune
    Question. South Dakota has taken proactive steps to inform the 
public about circumstances in which an individual will lose his or her 
unemployment benefits for refusing an offer to return to work. Are 
there specific steps the Department of Labor may take over the coming 
weeks and months to help States educate the public about what 
circumstances make an individual ineligible UI benefits, as well as 
informing the public about other Federal programs that are available to 
assist individuals still facing financial hardship?

    Answer. The Department has issued extensive guidance on 
Unemployment Insurance (UI) programs under the CARES Act, as well as 
news releases, fact sheets, and ``frequently asked questions'' 
documents that can be found at https://www.dol.gov/coronavirus/
unemployment-insurance. The Department's guidance and technical 
assistance have also encouraged States, in turn, to employ a variety of 
forms of communication to further public understanding eligibility 
requirements and the processes for filing UI claims, which to a large 
degree are determined by State law and practice. The Department will 
continue remain in communication with States on these issues over the 
coming weeks.

    Question. My office has heard that self-employed individuals that 
have mixed earnings (self-employed income and are on an employer's 
payroll) could be disqualified from the Pandemic Unemployment 
Assistance program. Is this interpretation correct even if an 
individual primarily relies on the selfemployment income?

    Answer. An individual should not automatically be denied Pandemic 
Unemployment Assistance (PUA) under the CARES Act simply because she 
has W-2 income. If an individual has sufficient covered employment 
(i.e., W-2 income) to qualify for regular unemployment compensation and 
meets the other eligibility requirements, then she is eligible for 
regular unemployment benefits and not eligible to receive PUA. The 
monetary requirements for regular unemployment compensation depend on 
State law.

    If the individual is ineligible for regular unemployment benefits 
and is unemployed, partially unemployed, or unable or unavailable to 
work due to a listed COVID-19-related reason under the CARES Act, then 
she may be eligible for PUA. PUA eligibility includes both covered 
employment and noncovered employment (e.g., self-employment).

                                 ______
                                 
                Question Submitted by Hon. Richard Burr
    Question. Some military veterans and reservists, who are the head 
of their households, lost their jobs due to COVID. Some States restrict 
veterans from applying for and collecting unemployment while also using 
the Post-9/11 GI Bill, considering the GI Bill pays out a housing 
allowance and a small stipend. For families that rely solely on the 
income and benefits of the veteran/reservist, losing a civilian job 
still significantly impacts their financial well-being. Will DOL 
consider releasing guidance to State unemployment offices encouraging 
them waive this restriction until the national emergency is lifted?

    Answer. The Department has not learned of any States disqualifying 
ex-service members or reservists from receiving UI benefits because of 
receipt of Post-9/11 GI Bill education benefits. In receiving follow-up 
information from Senator Burr's office, the Department understands the 
question to involve reservists and National Guardsmen who have lost 
their civilian employment.

    The Department does not have authority to waive the statutory 
provisions of the National Defense Authorization Act of 2016 (NDAA). 
However, it published Unemployment Insurance Program Letter 1416 
(https://wdr.doleta.gov/directives/corr_doc.cfm?DOCN=9737) to discuss 
the provisions of the NDAA. This guidance noted that the Department is 
coordinating with the Department of Veterans Affairs (VA) regarding 
procedures to facilitate the necessary information exchange between the 
VA and the States to address Post-9/11 GI Bill education benefits that 
may affect Unemployment Compensation for Ex-Service Members (UCX) 
claimants. The Department of Labor plans to issue future guidance 
regarding State responsibilities to address Post-9/11 GI Bill education 
benefits for affected UCX and UI claimants. States have been advised 
that until the Department publishes additional guidance on this matter, 
they are to process UCX and UI benefits in accordance with normal 
procedures. The Department continues to work with the Department of 
Defense and the VA to develop guidance on this matter.

    The Department has reached out to North Carolina to ensure the 
State is handling such claims appropriately.

                                 ______
                                 
             Questions Submitted by Hon. Patrick J. Toomey
    Question. Each State unemployment system requires that, in order to 
be eligible for benefits, claimants must be ``able, available, and 
actively searching for work''--and are ineligible for benefits if they 
refuse an offer of suitable employment, including returning to their 
previous job.

    Can States decline to investigate or pursue reported cases of UI 
fraud?

    Answer. No. The Department issued guidance under Unemployment 
Insurance Program Letter (UIPL) 23-20 (https://wdr.doleta.gov/
directives/corr_doc.cfm?DO
CN=4621), which reiterated that the same tools used to investigate and 
pursue fraud under the regular unemployment compensation program also 
apply to the CARES Act programs. The Department is authorized to take 
additional action with States, including requiring corrective action 
plans or, in egregious cases, severing CARES Act agreements in response 
to unaddressed program integrity problems.

    Question. To what extent are States able to waive or provide their 
own modified guidance regarding the requirements that claimants must be 
able, available, and actively searching for work?

    Answer. Section 303 of the Social Security Act requires that an 
individual collecting unemployment benefits be able, available, and 
actively searching for work.

    Prior to enactment of the Families First Coronavirus Response Act 
(FFCRA) and the CARES Act, the Department issued guidance under UIPL 
10-20 (https://wdr.doleta.gov/directives/corr_doc.cfm?DOCN=8893) 
regarding the significant flexibilities permissible under existing 
Federal law for the requirement that an individual be able and 
available to work in the context of the COVID-19 pandemic. 
Accommodations are allowable for individuals who have not withdrawn 
from the labor market or who are on temporary lay-off from an employer. 
The Department is reviewing the guidance in UIPL 10-20 in light of 
changing conditions to determine whether States should begin more 
rigorously enforcing the work search requirements.

    FFCRA provides States the ability to modify or suspend the 
requirement to actively seek work in response to the spread of COVID-
19. In fact, a modification or suspension of the work search 
requirements for individuals ``directly impacted by COVID-19 due to an 
illness in the workplace or direction from a public health official to 
isolate or quarantine'' is a required condition for States to receive 
Allotment II of the emergency administrative grants made available 
under the FFCRA. Additionally, the Pandemic Emergency Unemployment 
Compensation (PEUC) program under the CARES Act requires that States 
provide flexibility for individuals collecting PEUC ``in cases of 
individuals unable to search for work because of COVID-19, including 
because of illness, quarantine, or movement restriction.'' The FFCRA 
statute does not provide a specific ending date for this flexibility 
but rather ties it to COVID-19 impacts. The Department believes that 
these flexibilities should be phased out as States' economies reopen 
and the effects of COVID-19 recede.

    Question. To what extent do States have discretion to define 
``suitable employment''? For example, if an employee is offered their 
exact previous job at the same wage but at temporarily reduced hours, 
can a State determine that the job no longer constitutes ``suitable 
employment''?

    Answer. The Federal Unemployment Tax Act establishes baseline 
criteria for a State to use in determining the suitability of work, 
including that work is unsuitable ``if the wages, hours, or other 
conditions of the work offered are substantially less favorable to the 
individual than those prevailing for similar work in the locality.'' 
Against this backdrop, States have significant flexibility in 
determining the suitability of employment. In the question posed, it is 
not clear by how much hours are reduced, and precisely how long the 
``temporary'' reduction lasts. If the reduction and duration are both 
minor, then it would not appear the ``substantially less favorable'' 
requirement is met.

                                 ______
                                 
                Questions Submitted by Hon. Steve Daines
    Question. Here in the Senate, I called early on for unemployment to 
be as close as possible to full wage replacement. Thousands of 
Montanans lives were upended through no fault of their own and ensuring 
they were able to make ends meet until the risk had passed was critical 
for our economy. As with any emergency program of such magnitude, there 
is potential for waste, fraud, and abuse.

    To that end, how is the Department working with States to ensure 
the integrity of our unemployment system?

    Answer. The Department is vigorously working with States, the 
Department's Office of Inspector General (OIG), and law enforcement to 
combat the increase in fraud resulting, in part, from the added 
benefits provided under the CARES Act and the significant increase in 
volume of claims. As professional criminals have started to target 
State UI systems, the Department has required States to implement for 
CARES Act programs the same mandatory program integrity tools used for 
the regular UI program. In addition, the Department published UI 
Program Letter 23-20 (https://wdr.doleta.gov/directives/
corr_doc.cfm?DOCN=4621) with more specific guidance on requirements for 
ensuring that payments can only be made to eligible individuals.

    The Department also has taken the following actions to help combat 
fraud related to the CARES Act programs:

        I sent a letter in early June to all governors stressing the 
importance of program integrity requirements; the letter also 
identified some best practices to prevent fraud.

        The Department's Employment and Training Administration (ETA), 
which oversees UI programs, has been working closely with the OIG's 
Office of Investigations, Labor Racketeering and Fraud to ensure 
States' cooperation with program integrity efforts, as well as to 
communicate fraud schemes in real time, work to secure State data, and 
provide to States effective fraud prevention and detection strategies.

        The Department has refocused the resources of the UI Integrity 
Center to provide tools and resources for States to combat fraud in the 
context of COVID-19 and the CARES Act.

        ETA and OIG staff have weekly calls, hosted by the Integrity 
Center, with State officials to share and communicate fraud prevention 
strategies.

        The Center's Integrity Data Hub is a multi-State data analysis 
tool that allows participating UI agencies to cross-match UI claims 
against a database associated with potentially fraudulent claims or 
overpayments. The Hub currently includes:

            A suspicious actor repository to enable States 
to submit known fraud data elements that will enable them to cross-
match those elements to detect multi-State fraud;

            Suspicious Internet Protocol (IP) addresses;

            Multi-State claims data;

            A fraud alert system; and

            Beginning in July 2020, an identity 
verification tool for use at the front end of a claim for all States.

    Question. While changes to unemployment insurance were a critical 
piece of the CARES Act, other programs such as the Paycheck Protection 
Program were instrumental in ensuring that our small businesses 
survive, so that once we get through the pandemic, workers have a job 
to return to.

    We all want to get people back to work but I hear from small 
businesses that rehiring can be a challenge after they get the PPP 
loan. What are the barriers that you most frequently hear about and 
what policy changes would you suggest if Congress writes additional 
legislation?

    Answer. The Department has heard reports that the amount provided 
by the Federal Pandemic Unemployment Compensation benefit has deterred 
some recipients from returning to work. States should continue to 
encourage employers to report individuals who refuse to return to 
suitable work in order to receive unemployment benefits.

    As the economy reopens and many more jobs become available, it will 
be even more important to have policies that promote work. The 
Department is available to work with Congress on potential strategies.

    Question. The suddenness of this crisis led to many States 
unemployment infrastructure to be overwhelmed, including Montana's, and 
we provided $1 billion dollars in administrative funding in the 
Families First Coronavirus Response Act. Nevertheless, those in need of 
unemployment insurance were met by jammed phone lines and crashing 
websites.

    Do you believe more needs to be done in regards to making sure 
unemployment agencies are adequately staffed and technologically up to 
date, and would you recommend additional funding or legislative 
changes?

    Answer. The administrative funding model for the regular UI program 
creates a particular challenge for States because the additional 
funding needed to cover increases in workload is disbursed after the 
increase in work: States receive additional funding on a quarterly 
basis if their workload exceeds what was projected for base-level 
funding. Due to the record-low unemployment prior to the COVID-19 
pandemic, State staffing and funding levels were also quite low, which 
slowed the modernization of information technology systems and other 
infrastructure, such as call center operations.

    The Department agrees that current funding for the UI program 
should be reconsidered. We are ready to work with Congress on aspects 
of potential reforms.

    Question. I would like to also discuss the process of getting the 
CARES Act provisions up and running in States. While Congress acted 
swiftly to pass this sweeping legislation, there were noticeable delays 
in States getting these critical enhanced benefits to recipients.

    Can you speak about what may have caused some of these delays and 
what lessons have been learned so that should we have another crisis, 
those in need aren't waiting several weeks to get the benefits they 
need?

    Answer. The Department is aware of the hardship faced by many 
Americans because of delayed payments. Unfortunately, States varied 
significantly in their capacity to ramp up the new programs made 
available under the CARES Act, with delays in some States arising from 
several different factors, including the complication arising from 
implementing new programs, antiquated information technology systems, 
and historic volumes of initial claims. The Department is ready to work 
with Congress on potential solutions.

    Question. While expanding unemployment was necessary, I have 
concerns that about long-term unemployment leading to skill-erosion and 
make it more difficult for some workers to reenter the workforce.

    Is this something the Labor Department is following, and how can we 
work with you to ensure workers are in the best possible position to 
reenter the workforce?

    Answer. As cities and States re-open, the Department's top priority 
is to get Americans safely back to work. In June 2020, the unemployment 
rate declined by 2.2 percentage points, to 11.1 percent, and the number 
of unemployed persons fell by 3.2 million, to 17.8 million. However, 
the Department recognizes that the prospect of long-term unemployment 
remains a significant concern for many Americans. In May 2020, there 
were 1.4 million individuals who reported long-term unemployed (LTU)--
those jobless for 27 weeks or more.

    Key tools used by the Department to serve the chronically 
unemployed include the Wagner-Peyser Employment Service and the formula 
grants made available under the Workforce Innovation and Opportunity 
Act (WIOA). At this point in Fiscal Year 2020, the Department has 
provided approximately $4.3 billion to States through the WIOA and 
Wagner-Peyser Employment Service. LTU individuals are eligible to 
receive reemployment services through the Wagner-Peyser Employment 
Service and to receive reemployment and training services through the 
WIOA Adult formula program. Job search services are provided through 
online job banks and other virtual tools and through a network of 
approximately 2,370 American Job Centers, which offer in-person 
services for all components of the workforce cycle: recruiting, 
training, retraining, and transitioning workers.

    As the economy continues to reopen, the Department is ready to work 
with Congress, in consultation with the States, on the best strategies 
to enable and incentivize Americans to return to the workforce with the 
skills necessary to succeed.

                                 ______
                                 
                 Question Submitted by Hon. Todd Young
                               ui systems
    Question. You spoke at length in your testimony about how ``one of 
the greatest challenges in the UI system is the information technology 
infrastructure used by States to administer their programs''--which was 
primarily why the $600 ``plus-up'' in the CARES Act was set at a flat 
rate. But, these system challenges aren't new--these same system issues 
occurred back during the Great Recession.

    What system changes do you think would help States be better 
prepared for the long term in case we ever face a situation similar to 
COVID-19 again?

    Answer. The Department recognizes the need to fund and modernize 
State UI information technology (IT) systems.

    The COVID-19 pandemic has highlighted the unreliablity of State UI 
IT systems--something the Department worked to educate Congress about 
during the drafting of the CARES Act. The UI program is structured as a 
Federal-State partnership based on Federal law but administered by 
States under State law. This structure makes the program unique among 
the country's benefit programs in that States have significant 
flexibility to establish eligibility provisions, benefit duration and 
levels, and taxing structures to pay for benefits.

    While State flexibility is important, this structure and the 
variance in State laws and processes make it more difficult to develop 
efficient administrative processes and to implement technologies that 
will work across the 53 different States and territories operating UI 
programs.

    The Department believes there is opportunity for modernization 
across States and would welcome the opportunity to work with Congress 
and States to that end.

                                 ______
                                 
                 Questions Submitted by Hon. Ron Wyden
                             worker safety
    Question. At the hearing, we discussed how to protect workers who 
turn down a job offer because of risks to their health or safety from 
losing their Unemployment Insurance or Pandemic Unemployment Assistance 
benefit. I also sent you a letter on this issue, along with 21 of my 
colleagues, on May 19th, and I have yet to receive a response. Based on 
our conversation at the hearing and your failure to respond to the 
letter, I remain concerned that the Department of Labor is not taking 
its responsibility to protect workers seriously, and that people across 
the country will continue to be forced to choose between their health 
and their income.

    Please provide a response to our letter in writing, including 
responses to the questions in the letter, a summary of any related 
guidance the Department has issued, and the Department's plan for 
issuing additional guidance on this topic that puts worker health and 
safety first.

    Answer. The Department responded to your letter on July 24, 2020.

    As the economy reopens, one of the Department's top priorities is 
ensuring that workers are returning to safe workplaces. Under the PUA 
program, an individual is eligible for benefits if he is otherwise able 
to work and available for work within the meaning of applicable State 
law, unless he is unemployed, partially unemployed, or unable or 
unavailable to work because of one of the COVID-19-related reasons 
outlined in Section 2102(a)(3)(A)(ii)(I) of the CARES Act.

    An individual is considered available for work under State law if 
he is available for work that is suitable for him. Many State laws 
provide that work is unsuitable if it exposes an individual to safety 
risks. If an individual receiving PUA is offered work that unreasonably 
exposes him to COVID-19, the State providing those benefits could 
conclude that the work is not suitable, if permitted under the State's 
suitable work provisions. The individual would still be considered 
available to work and potentially eligible for PUA, provided the other 
eligibility requirements are met. Likewise, if an individual were to 
turn down work that would be considered suitable under State law but 
turned the work down for one of the COVID-19-related reasons in Section 
2102(a)(3)(A)(ii)(I) of the CARES Act, the individual would still be 
eligible for PUA.
          pua eligibility for workers with immunocompromised 
                     individuals in their household
    Question. In my May 19th letter, I also asked you to clarify that 
someone may claim PUA if they are advised by a health-care provider to 
stay home because a member of their household is immunocompromised or 
at heightened risk from COVID-19.

    Will the Department issue guidance clarifying that such individuals 
are eligible for PUA? If you disagree that such individuals are 
generally eligible for PUA under current law, please inform Congress of 
any necessary technical changes to the law that would ensure they are 
eligible.

    Answer. On April 27, 2020, the Department published guidance on how 
an individual could make a claim for PUA if she was advised by a 
health-care provider to stay home because a member of her household is 
immunocompromised or at heightened risk from COVID-19. Specifically, 
this clarification was provided in Question 41 in Attachment I to 
Unemployment Insurance Program Letter 16-20, Change 1, (https://
wdr.doleta.gov/directives/corr_doc.cfm?DOCN=5899).

    Section 2102(a)(3)(A)(ii)(I)(ff) of the CARES Act provides that an 
individual ``who is unable to reach the place of employment because the 
individual has been advised by a health-care provider to self-
quarantine due to concerns related to COVID-19'' may be eligible for 
PUA, provided she meets the other eligibility requirements. This 
assessment of eligibility does not require a specific underlying reason 
for the health-care provider's advice to self-quarantine due to 
concerns related to COVID-19.
                pua eligibility for child care providers
    Question. I have heard from self-employed child care providers in 
41 States who have been rejected for PUA even after losing most of 
their business. This has been a particular problem for providers who 
have faced a significant drop in income but are not working fewer 
hours. For example, if a child care provider cared for 10 children 
before the pandemic but now only cares for one, the provider will have 
experienced a significant drop in work and income, but still may work 
the same number of hours. In some States, claimants have been told they 
do not qualify for PUA simply because they have not experienced a 
reduction in hours. Lost income should be sufficient to qualify the 
individual for PUA, but there appears to be significant confusion in 
many States about how to process these types of claims.

    Other child care providers have been told that they were ineligible 
for PUA because they reported that they are not looking for work. A 
child care provider who is still watching a few children is not 
necessarily able to look for a new job. In this context, as long as the 
provider is willing to accept more children into care (while still 
meeting relevant social distancing and public health requirements), 
they should be considered to meet work search requirements.

    Will you provide clarifying guidance to States on how to treat 
situations like those described above? If you disagree that child care 
providers in situations like these are generally eligible for PUA under 
current law, please inform Congress of any necessary technical changes 
to the law that would ensure they are eligible.

    Answer. One of the qualifying conditions for an individual to 
receive PUA is that he is unemployed, partially unemployed, or unable 
or unavailable to work for a COVID-19 related reason listed in the 
CARES Act.

    The PUA program under the CARES Act is largely modeled after the 
Disaster Unemployment Assistance (DUA) program and relies on the DUA 
regulatory framework where the CARES Act is silent. DUA regulations 
provide that a self-employed individual performing less than the 
customary full-time services is considered partially unemployed.

    Child care providers in the situation you describe may be 
considered to be partially unemployed under the DUA regulations. 
Further, under the eligibility criteria the Department added pursuant 
to the authority in CARES Act Section 2102(a)(3)(A)(ii)(I)(kk), self-
employed workers who have sustained a significant diminution of their 
customary full-time services because of COVID-19 may be eligible for 
PUA where they are forced to suspend the provision of services, though 
their benefit amount may be reduced because of income. The Department 
has aimed to make clear that this also applies to those who do not 
suspend the provision of services, and additional clarifying guidance 
will be issued to States in the near future.

    With respect to your question regarding work search efforts, the 
Social Security Act requires that an individual collecting unemployment 
benefits actively search for work. However, the State has considerable 
discretion to determine the types of suitable work that individuals 
must seek. Additionally, FFCRA provides States with the ability to 
modify or suspend the requirement to actively seek work in response to 
the spread of COVID-19.
    pua eligibility for self-employed individuals who work from home
    Question. There has been some confusion about whether self-employed 
individuals who work from home (e.g., freelance writers) qualify for 
PUA. It appears that some States are saying that an individual cannot 
qualify for PUA if they are able to telework, but based on the law and 
the guidance the Department has already issued, a self-employed 
individual who would usually work from home but is no longer getting 
paid for any work would be eligible for PUA. You indicated that you 
agreed with this perspective in your response to a similar question 
from Senator Warner during the hearing.

    Will you provide additional guidance to States to ensure that they 
are administering PUA correctly for self-employed individuals who 
usually work from home? If you disagree that such individuals are 
generally eligible for PUA under current law, please inform Congress of 
any necessary technical changes to the law that would ensure they are 
eligible.

    Answer. Section 2102(a)(3)(B) of the CARES Act provides that an 
individual who has the ability to telework with pay is not covered 
under PUA. However, in the scenario presented, if the individual has 
experienced a significant diminution of freelancing work because of the 
COVID-19 pandemic, regardless of her ability to telework, and provided 
the individual meets the other eligibility requirements, she could be 
eligible for PUA under the criteria the Department issued under Section 
2102(a)(3)(A)(ii)(I)(kk) of the CARES Act and in the Department's 
subsequent guidance.
              workers with wage and self-employment income
    Question. There have been a lot of questions and confusion about 
workers that have both wage and self-employment income. I have heard 
stories of workers being denied PUA if they continue to have any W-2 
income at all, even if the majority of their income is generally self-
employment income from a job they have lost. For example, a musician 
may continue to earn a minimal amount through a part-time W-2 job, but 
because they are no longer performing, they have lost the vast majority 
of their self-employment income. While eligibility will depend on an 
individual's specific circumstances and State laws, I have heard a 
number of concerning reports that people are being automatically denied 
PUA if they have any W-2 income--even if they don't qualify for regular 
unemployment compensation--despite the fact that the vast majority of 
their income has been lost.

    Can you provide additional guidance to States for how claims should 
be processed for workers with both wage and self-employment income, to 
ensure that these workers receive PUA when they are eligible for it?

    Answer. An individual should not automatically be denied PUA, as 
authorized under the CARES Act, simply because he has W-2 income. If an 
individual has sufficient covered employment (i.e., W-2 income) to 
qualify for regular unemployment compensation and meets the other 
eligibility requirements, then he is eligible for regular unemployment 
benefits and not eligible to receive PUA. The monetary requirements for 
regular unemployment compensation depend on State law.

    If the individual is ineligible for regular unemployment benefits 
and is unemployed, partially unemployed, or unable or unavailable to 
work due to a listed COVID-19-related reason under the CARES Act, he 
may be eligible for PUA. PUA eligibility includes both covered 
employment and non-covered employment (e.g., self-employment).
                            state technology
    Question. We know that almost every State workforce agency has 
sorely outdated technology, and all State systems need upgrades. We 
also know that it will be hard for States to make all of the necessary 
upgrades while they are buried in millions of unemployment claims. Have 
any States made successful IT transformations during this pandemic that 
allow them to process significantly more claims?

    Looking ahead, rather than having each State develop their own 
technology, is it worth considering whether it would be more efficient 
to have the Department of Labor develop a modern benefits 
administration system that all of the States could interface with to 
administer benefits? If so, what features should such a system have, 
and what can Congress do to initiate or speed up this process?

    Answer. The Department recognizes the need to modernize State UI IT 
systems.

    The COVID-19 pandemic has highlighted the unreliablity of State UI 
IT systems--something the Department worked to educate Congress about 
during the drafting of the CARES Act. The UI program is structured as a 
Federal-State partnership based on Federal law but administered by 
States under State law. This structure makes the program unique among 
the country's benefit programs in that States have significant 
flexibility to establish eligibility provisions, benefit duration and 
levels, and taxing structures to pay for benefits.

    While State flexibility is important, this structure and the 
variance in State laws and processes make it more difficult to develop 
efficient administrative processes and to implement technologies that 
will work across the 53 different States and territories operating UI 
programs.

    Despite these challenges, the Department believes it is feasible to 
implement modernization across States and would welcome the opportunity 
to work with Congress and States to that end.
                                ui data
    Question. The Department of Labor and the States have struggled to 
accurately track data on the number of regular UI and PUA claims 
processed and paid. Right now, it seems that no one can report with 
certainty how many people have received a check and how many are still 
waiting for the benefits they are owed. How can data collection and 
reporting be improved? What resources would the Department and the 
States need from Congress to make these improvements?

    Answer. The recent increase in unemployment claims processed by the 
State unemployment insurance agencies is unparalleled. Prior to this 
increase, claims had been at their lowest levels in 50 years. With the 
pandemic, States faced massive claims volumes and the responsibility to 
implement significant new Federal programs. During this ramp up, States 
prioritized paying claims over reporting. Adding to the workload, the 
PUA program is structured to require a determination of ineligibility 
for regular UI.

    Even though the Department provided guidance to States clarifying 
that it was unnecessary to process a regular UI claim to determine 
eligibility for PUA--and strongly discouraged States from doing so--
many nevertheless mandated this extra step. The Department advised 
States that PUA applications should not be counted as initial claims. 
Because of the staggering workload and the overlap of the two programs, 
States struggled to process and report in a timely and accurate manner.

    The Department does not currently collect data related to the 
number of pending claims to be processed, although data on claims 
filed, claims paid, and the timeliness of payment is collected. The 
Department will consider the need for additional data.

    Funding for unemployment insurance administration is closely tied 
to unemployment claims levels. The recent increase in claims has 
resulted in an increase of administrative funding to State agencies 
that should allow for increased staffing, technology capacity, and 
improved data collection and reporting. The Department believes that 
any system-wide technology enhancement should ensure more accurate, 
timely, and simple reporting. The Department is ready to work with 
Congress on potential strategies.
                mismanagement and lack of oversight of 
                florida's unemployment insurance program
    Question. The Department of Labor's Office of Inspector General 
recently put out an advisory report with regard to the implementation 
of unemployment insurance provisions in the CARES Act. One area it 
identified of particular concern was State preparedness, particularly 
staffing and system capabilities.

    It seems that no State has failed worse in this regard than the 
State of Florida. The State of Florida's Auditor General warned over 
four reports between 2015 and 2019 that the State's unemployment system 
had widespread systemic flaws that were not being addressed and would 
likely fail in the event of increased claims. That is exactly what has 
happened. As claims ramped up and the system was plagued with crashes 
and glitches, Florida was the only State in the country that saw its 
unemployment trust fund grow in March and April.

    Do you believe the State of Florida's unemployment program was 
adequately prepared for this economic crisis? Will you request that the 
Office of Inspector General open a review of the failures and lack of 
preparedness of Florida's unemployment program?

    Answer. Florida, and many other States, have faced challenges in 
the administration of their unemployment systems due to an 
unprecedented volume of claims and the State's information technology 
support system. The Department has offered Florida, as well as 
weaknesses in other States, technical assistance to address these 
challenges; Florida has accepted this assistance and has committed to 
remedy its IT problems. The Department has been and will remain focused 
on helping Florida and any other State or territory facing 
administration challenges improve its ability to administer UI programs 
according to Federal law.

    The Department will cooperate with the Office of Inspector General 
should it decide to open an investigation.
                      100-percent wage replacement
    Question. When we negotiated the CARES Act, we agreed, based on 
input from the Department of Labor and from State workforce agencies, 
that State workforce agencies would be unable to implement a policy 
that provided a benefit equal to 100-percent wage replacement on an 
individual basis. My recent conversations with State workforce agencies 
have indicated that States are still unable to implement such a policy 
without significant delays and complications. What is the Department of 
Labor's current position on this issue? Are States able to calculate 
100-percent wage replacement on an individual basis without 
unreasonable delays? If you believe such a policy is administratively 
feasible, please provide detail as to how you came to this conclusion 
and which States you talked to in evaluating the issue.

    Answer. The Department has been in ongoing conversations with 
States regarding various proposed changes to CARES Act UI programs, and 
surveyed all the States on their capacity to implement a wage 
replacement structure. Although the time the States reported they would 
need to do so varied widely. We believe that all States have the 
ability to implement such a program within a few months at most.

                                 ______
                                 
               Questions Submitted by Hon. Maria Cantwell
    Question. Washington State has four Department of Labor Job Corps 
Centers that employ approximately 130 people and serve hundreds of 
students a year. These Centers not only provide critical job training 
and careers to students, they also prepare students to meet the needs 
of local communities and Washington State. For example, in 2018 
Washington State Job Corps Centers provided 119,539 hours of needed 
fire support.

    It is important the Job Centers continue to train students and be a 
resource, however, we must ensure employees and students are able to 
return to the Job Centers safely during the COVID-19 pandemic.

    Has the Employment and Training Administration's Office of Job 
Corps in the U.S. Department of Labor issued COVID-19 guidance for the 
reopening of Job Corps Centers?

    Can the Department of Labor provide this guidance?

    Answer. The safety and health of Job Corps students is the top 
priority of the Office of Job Corps (OJC). On March 17, 2020, the 
Department announced a temporary pause in Job Corps Center operations 
in order to protect students from coronavirus, and a mandatory spring 
break for all Job Corps centers was initiated. On April 24th, Job Corps 
issued Program Information Notice 19-17 to contractors regarding a 
transition to virtual operations and moving students from the COVID-19 
``paid leave status'' used for spring break to a ``present for duty 
status,'' with students participating virtually in various aspects of 
the program. All centers implemented distance learning programs, which 
were in place by May 11, 2020.

    The Department is now developing additional guidance to facilitate 
centers, further reopening. OJC will provide a copy of the updated 
guidance to the Senate Finance Committee when it is released to the Job 
Corps Center operators.

    Question. How has the Department of Labor worked with local 
communities and States to adhere to State and county reopening plans?

    Answer. To keep Job Corps Centers and students safe as they resume 
physical operations, the Department's guidance will reflect 
consideration of guidance from the CDC and Occupational Safety and 
Health Administration, as well as other experts and authorities. Center 
operators will be required to work within State and local guidelines as 
they plan for center reopenings; all reopening plans will be reviewed 
by the OJC national office.

    Question. How has the Employment and Training Administration 
communicated this guidance to Job Corps Center administrators and 
students?

    Answer. OJC has been working with Job Corps Center operators since 
students left campus to identify and implement the steps needed to 
bring students back to the centers. OJC has been in constant contact 
with center operators in order to develop guidance to safely return, 
house, educate, and support students at the centers. In addition, 
center operators are authorized to procure products for the safety of 
the students and to make physical changes at centers to support 
resumption of physical operations.

                                 ______
                                 
              Questions Submitted by Hon. Robert Menendez
    Question. Recent jobs reports indicate that State and local 
governments have shed more jobs in one month than in the entirety of 
the Great Recession. Projections by Moody's show that every State in 
the Nation has already, or will soon have historic budget shortfalls. 
If Congress does not act soon to help State and local governments, they 
are going to have to cut essential services businesses rely on, layoff 
or furlough public safety and emergency health personnel, or raise 
taxes. This will make it harder for businesses to reopen, drag the 
recession even deeper and make it more difficult to dig our way out of 
this hole.

    Prominent economists, like Glenn Hubbard, have called on Congress 
to provide $1 trillion in additional aid to States and cities. Mark 
Zandi predicted there would be 3 million State and local job losses in 
the next year alone, if Congress fails to act. Glenn Hubbard said ``I 
can't imagine a successful (relief) package without that. . . . This is 
about as close to a no-brainer that you could do as possible.''

    Do you agree with these economists that assistance to State and 
local governments is essential in the next economic package?

    Answer. The Department worked swiftly to implement the provisions 
of FFCRA, which provided $1 billion in administrative funding to State 
UI agencies. This assistance was critical to enabling them to address 
the unprecedented number of UI claims that resulted from the COVID-19 
pandemic. The CARES Act provided $345 million in funding for Dislocated 
Worker Grants. To date, the Department has obligated initial funding 
increments for 57 grants totaling more than $248 million, which is in 
excess of two-thirds of the funding provided under the CARES Act. Funds 
will be used for disaster-relief cleanup and humanitarian assistance 
for the communities identified by the applicants as significantly 
affected by COVID-19, and for employment and training activities.

    As the country continues to re-open and Americans return to their 
jobs, the Department is available to work with Congress on potential 
strategies to address the challenges faced by State and local 
governments.

    Question. As you know, a majority of States are in need of 
modernizing their systems. These system modernizations are multi-year 
complex processes that require a permanent funding stream.

    Is the Department of Labor considering plans for a uniform Federal 
solution for Unemployment Insurance modernization?

    Answer. The Department recognizes the need to modernize State UI IT 
systems.

    The COVID-19 pandemic has highlighted the unreliablity of State UI 
IT systems--something the Department worked to educate Congress about 
during the drafting of the CARES Act. The UI program is structured as a 
Federal-State partnership based on Federal law but administered by 
States under State law. This structure makes the program unique among 
the country's benefit programs in that States have significant 
flexibility to establish eligibility provisions, benefit duration and 
levels, and taxing structures to pay for benefits.

    The Department has been in ongoing conversations with States 
regarding various proposed changes to CARES Act UI programs, and 
surveyed all the States on their capacity to implement a wage 
replacement structure. Although the time the States reported they would 
need to do so varied widely. We believe that all States have the 
ability to implement such a program within a few months at most.

    Question. The CARES Act enhanced and expanded unemployment to help 
workers make ends meet during these uncertain times. Specifically, 
Pandemic Unemployment Assistance (PUA) has been a critical lifeline for 
independent contractors, gig workers, and the self-employed. However, 
some home-based self-employed child care workers have faced challenges 
accessing PUA.

    Is the Department of Labor considering any technical changes to PUA 
to ensure that self-employed family child care home-based providers can 
access either full unemployment benefits or partial unemployment 
compensation?

    Answer. One of the qualifying conditions for an individual to 
receive PUA is that she be unemployed, partially unemployed, or unable 
or unavailable to work for a COVID-19 related reason listed in the 
CARES Act.

    The PUA program under the CARES Act is largely modeled after the 
DUA program and relies on the DUA regulatory framework where the CARES 
Act is silent. DUA regulations provide that a self-employed individual 
performing less than the customary full-time services is considered 
partially unemployed.

    Child care providers in the situation you describe may be 
considered to be partially unemployed under the DUA regulations. 
Further, under the eligibility criteria the Department added pursuant 
to the authority in CARES Act Section 2102(a)(3)(A)(ii)(I)(kk), self-
employed workers who have sustained a significant diminution of their 
customary full-time services because of COVID-19 may be eligible for 
PUA where they are forced to suspend the provision of services, though 
their benefit amount may be reduced because of income. The Department 
has aimed to make clear that this also applies to those who do not 
suspend the provision of services, and additional clarifying guidance 
will be issued to States in the near future.

                                 ______
                                 
             Questions Submitted by Hon. Benjamin L. Cardin
    Question. Can you elaborate on the nature of the problems faced by 
the Interstate Connection Network (ICON) earlier in 2020?

    Answer. The Interstate Connection Network (ICON) is a secure, 
national telecommunications network through which States exchange UI 
claims-related data and other data. It operates as an information 
gateway, providing more than 30 applications that enable the exchange 
of information among States and Federal agencies to determine 
eligibility for unemployment benefits; the applications include 
crossmatches with the Social Security Administration to verify 
claimants' Social Security numbers.

    Similar to State systems strained by high volumes of UI claims, 
ICON experienced performance and capacity issues in late March 2020. 
The Department worked quickly with the National Association of State 
Workforce Agencies (NASWA) and funded an upgrade for ICON to a more 
powerful mainframe that immediately took care of most of the 
difficulties States were experiencing--these were resolved in early 
April 2020.

    Some States, however, had problems with their own systems being 
able to submit data to ICON for processing and receiving data back into 
their own systems. NASWA and the vendor worked with the individual 
States facing these problems to identify solutions and make 
accommodations where feasible.

    Question. When were these problems present, and when were they 
resolved?

    Answer. Since April 5th, ICON has had no further performance 
problems. When the Department has learned of difficulties, it has 
worked with NASWA and the vendor to provide information technology 
support to gain insight on the source of the problem and resolve it.

    Question. Are there any notable administrative requirements for 
States that Congress can relax or streamline at least for the duration 
of this crisis?

    Answer. The Department continues to work with States as they 
provide benefits and monitor and correct fraudulent activity. The 
Department will use these experiences to consider possible legislative 
actions and will share any proposals as they are developed by the 
administration. The Department will work with Congress to explore 
opportunities to make the unemployment insurance program more 
efficient, streamlined, and responsive to administrators and 
participants in the program.

    Question. Are there any changes to the current model of 
collaboration between the Federal and State governments that you think 
could improve the provision benefits?

    Answer. The variation across State UI programs can make it 
challenging to implement nationwide programs and enhancements, such as 
a modernization of State UI information technology systems. The 
Department will work with Congress and the States to explore strategies 
to address these challenges.

                                 ______
                                 
               Questions Submitted by Hon. Sherrod Brown
    Question. According to the Department of Labor website, OSHA has 
received nearly 5,000 complaints from workers for worker safety concern 
related to COVID-19. At the hearing, you mentioned that OSHA is 
pursuing a number of investigations related to COVID-19 complaints.

    How many on-site, in-person inspections has OSHA completed in 
response to workers' COVID-19 complaints as of June 15th? How many have 
resulted in any sort of citation of the employer for failing to protect 
workers? Please provide a list of all on-site, in-person inspections 
conducted as a result of a worker complaint and the outcome of those 
inspections.

    Answer. The Occupational Safety and Health Administration's (OSHA) 
data system does not currently distinguish between on-site and remote 
inspections, and therefore the requested list cannot be generated. OSHA 
conducted a total of 772 COVID-related inspections from February 2, 
2020 through July 30th. OSHA investigates every Federal complaint and 
referral and has responded to 8,464 complaints and referrals as of July 
30th. As of July 30th, four COVID-19-related citations have been 
issued. One citation was issued on May 18th, and three were issued on 
July 13th. The majority of inspections are still open at this time. 
OSHA is working expeditiously to complete them.

    Question. I wrote you a letter dated April 9, 2020 urging DOL to 
issue guidance instructing States on how to allow employers to submit 
employee information through the WARN system or its equivalent to speed 
up the unemployment insurance application process. In your recent 
response, you stated that ``the majority of States have standard UI 
program processes in place for employers to provide employees' 
separation information to the State in a single communication.''

    Please provide a list of the States who do not currently have a 
process in place for employers to provide employees' separation 
information in a single communication.

    Answer. This question refers to two different processes. One is the 
Worker Adjustment and Retraining Notification (WARN) Act process. The 
other is the systems some State UI agencies, like Georgia's, have to 
allow employers to submit lists of employees in a single file for 
unemployment compensation determination.

    Under the WARN Act, employers are required to notify State and 
local governments when making a qualifying layoff or worksite closing 
in order to trigger rapid response services. The Department does not 
collect information on State practices to enable employers to provide 
separation information on multiple individuals at the same time, but is 
aware anecdotally that most States implement this practice to expedite 
claims processing. Therefore, the Department is unable to provide the 
list requested.

    Question. In its June 4, 2020 response to Chairman Grassley, the 
Congressional Budget Office found that the temporary increase of $600 
per week in unemployment benefits has increased unemployment 
recipients' spending on food, housing, and other goods and services 
such that it is closer to what they spent when they were employed. That 
is why the CBO found that ``an extension of the additional benefits 
would boost the overall demand for goods and services, which would tend 
to increase output and employment.''

    Do you agree with CBO that the additional $600 in weekly 
unemployment benefits has had a stimulative effect on the economy?

    Answer. Congress passed the CARES Act as the U.S. economy was 
shutting down. The $600 weekly payment was an important, extraordinary 
measure to support workers who in many instances were being prohibited 
from earning a living as a result of necessary public health measures 
put in place by States and locales. A study by the University of 
Chicago indicates that more than two-thirds of workers receiving 
benefits under the CARES Act have seen their wages replaced at rates 
above 100 percent, with some low-wage workers experiencing replacement 
rates above 200 percent (https://bfi.uchicago.edu/working-paper/2020-
62/). The Congressional Budget Office, in response to a query by 
Chairman Grassley, has reported that if the $600 plus-up were continued 
past July, five-sixths of the covered workers would receive higher 
payments through unemployment than by working, resulting in a more 
elevated unemployment rate than would occur otherwise. Given these 
circumstances, Congress's decision to sunset the $600 plus-up at the 
end of the month was appropriate. Unemployment benefits will continue 
to be important after July, but as the economy re-opens and jobs 
return, it will be appropriate to take a different approach than taken 
in March as the economy was closing. The Department is available to 
work with Congress to fashion the approach that best support workers 
and economic growth.

                                 ______
                                 
             Questions Submitted by Hon. Michael F. Bennet
    Question. This crisis has had different effects on different 
communities. When it comes to the economic costs, black and Hispanic 
workers are far more likely to report having lost a job or income than 
white workers. Even though unemployment decreased overall in May, 
unemployment for black workers went up and unemployment rates for black 
and Hispanic workers remained very high.

    We need more specific data to understand how we got here, and to 
create a more equitable system for black and Hispanic workers, who are 
experiencing severe economic conditions during this crisis.

    Recently, your agency began include beneficiaries of Federal 
unemployment benefits in its weekly claims reports. However, they 
continue to be omitted from the Department's monthly report, which 
includes important information on characteristics of recipients, such 
as race and gender. This seems like important data to have.

    Will you commit to providing States with guidance for reporting 
characteristics of workers receiving benefits through Federal programs 
and reporting this data each month for the duration of these programs?

    Answer. Demographic data related to unemployment insurance programs 
can be valuable in analyzing the effect COVID-19 job and income loss 
has had on African-American and Hispanic workers. The Department has 
not historically required State reporting on claimant demographics for 
temporary programs that require swift implementation, given the urgent 
need to provide benefits to eligible individuals. The Department will 
consider the feasibility of requiring reporting on claimant 
demographics for the CARES Act programs.

    Question. With more timely data on the full set of claimants, 
policymakers and researchers could get a better picture of the 
unemployment situation across different communities, especially our 
black and Hispanic workers.

    Will you commit to providing States with guidance for reporting 
initial claims and continuing claims data by race in weekly 
unemployment data releases?

    Answer. As noted, the Department has not historically required 
State reporting on claimant demographics for temporary programs that 
require swift implementation, given the urgent need to provide benefits 
to eligible individuals. The Department will consider the feasibility 
of requiring reporting on claimant demographics for the CARES Act 
programs.

    Question. I'd like to ask about the guidance issued by the 
Department of Labor on health and safety standards and people returning 
to work, particularly a regulation that States that ``a position shall 
not be deemed to be suitable for an individual if the circumstances 
present any unusual risk to the health, safety, or morals of the 
individual.''

    Your agency has issued conflicting and unclear guidance here. My 
home State of Colorado has clarified that workers receiving 
unemployment benefits who live with older and immunocompromised people 
should not be required to return to work under the ``suitable work'' 
rules, but that's not been adopted across the country.

    I read about a woman named Tania Goolsbee, a maid whose husband has 
COPD and chronic emphysema. She's worried about going back to work when 
the risk of COVID-19 is still high. As she said, ``If I were to bring 
[coronavirus] home to my husband, it would kill him.''\1\
---------------------------------------------------------------------------
    \1\ https://whyy.org/articles/coronavirus-unemployment-benefits-
are-high-putting-workers-and-employers-at-odds/.

    Wouldn't you agree that, because she can't control the 
---------------------------------------------------------------------------
circumstances of her workplace, she is facing an unusual risk?

    Answer. The Department's guidance on this issue is not conflicting. 
A State has significant flexibility in determining the suitability of 
employment and defining terms such as ``unusual risk.'' The Federal 
Unemployment Tax Act provides baseline Federal criteria for a State to 
use in determining the suitability of work, including that work is 
unsuitable ``if the wages, hours, or other conditions of the work 
offered are substantially less favorable to the individual than those 
prevailing for similar work in the locality.'' The Department's 
regulations allow States discretion to define availability, as long as 
the definition excludes full withdrawal from the labor market. On March 
12, 2020, the Department published Unemployment Insurance Program 
Letter 10-20 (https://wdr.doleta.gov/directives/attach/UIPL/UIPL_10-
20_Acc.pdf), which provided States guidance in the flexibilities 
available to them in interpreting suitable work in the COVID-19 
context. In assessing whether someone has good cause to not return to 
work or refuse suitable work, it is not sufficient for the individual 
to have a generalized fear of the virus; States must determine if there 
is a factual basis for the individual to believe that it is not safe to 
return to work or accept suitable work.

    Question. Will you commit to publishing new guidance and FAQs to 
provide clarity on the standards for when workers remain eligible for 
State or Federal unemployment benefits if they leave work or refuse to 
work due to legitimate COVID-19 health and safety concerns?

    Answer. One of the Department's top priorities is to ensure that 
workers are returning to safe workplaces. The Department has already 
provided guidance on this issue.

    The Department's guidance in UI Program Letter 16-20, Change 1, 
Question 50, addresses the issue under the PUA program. An individual 
is eligible for benefits if he is otherwise able to work and available 
for work within the meaning of applicable State law, but is unemployed, 
partially unemployed, or unable or unavailable to work because of one 
of the COVID-19-related reasons outlined in Section 
2102(a)(3)(A)(ii)(I) of the CARES Act. An individual who does not go to 
work due to general concerns about exposure to COVID-19, and who does 
not meet any of the other COVID-19 related criteria for PUA, is not 
eligible for PUA because a general concern about exposure to COVID-19 
is not one of the reasons listed in section 2102(a)(3)(A)(ii)(I) of the 
CARES Act.

    With regard to the regular UI program, an individual is considered 
available for work under State law if he is available for work that is 
suitable for him. Many State laws provide that work is unsuitable if it 
exposes an individual to safety risks. If an individual receiving 
benefits is offered work that unreasonably exposes him to COVID-19, the 
State providing those benefits could conclude that the work is not 
suitable, if permitted under the State's suitable work provisions. We 
note that it would not be appropriate for a State to determine that 
work is unsuitable simply because of a worker's generalized fear of 
COVID-19. The determination would need to be based on facts about that 
particular workplace indicating that there is a reasonable ground to 
believe that the individual is at risk of contracting the virus at that 
workplace.

    Question. Only 214,016 workers out of the 29.5 million claiming 
unemployment benefits are benefiting from workshare programs. Roughly 
half of States still have not adopted workshare programs. These 
programs allow employers to keep workers on payroll at a reduced 
schedule. They allow workers to keep their benefits, like health 
insurance, and most of their wages. And, the Federal Government will 
pay up to 100 percent of their unemployment benefits. The CARES Act 
provided funding for grants to States to establish or improve their 
workshare programs.

    What is your agency doing to increase take-up of these programs 
among States who have not yet adopted them?

    Answer. The Short-Time Compensation (STC) program--also known as 
``worksharing'' or ``shared work''--is a lay-off aversion program in 
which an employer, under a State-approved plan, reduces the hours for a 
group of workers in lieu of layoffs, and these workers in turn receive 
a reduced unemployment benefit payment. Although the STC program can be 
operationally challenging for States to implement, the Department 
considers the STC program to be valuable for employers, workers, and 
the economy--it saves jobs, keeps workers employed, and helps employers 
maintain their skilled workers.

    The Department is working to expand the use of the STC program, 
within the scope of current law, in ways that support the re-opening of 
State and local economies. Businesses that temporarily closed may use 
the STC program to bring back most or all of their employees in a 
reduced capacity when they reopen if social distancing measures, a 
decline in business, or other factors prevent operation at full 
staffing levels.

    The Department has provided guidance to States on the provisions of 
the CARES Act related to the 100 percent Federal reimbursement of STC 
benefits through December 2020 and the available grants for 
implementation and expansion of State STC programs and employer 
outreach. The Department is also providing technical assistance to all 
States considering creation of a new STC program and is rolling out a 
multi-pronged strategy to promote the adoption of STC programs in 
States without them and the expansion of programs in States where they 
already exist.

    Question. What are you doing to distribute these funds quickly so 
that States can establish and improve these important programs that 
help workers and employers?

    Answer. The Department has provided guidance to States on the STC 
provisions in the CARES Act related to 100-percent reimbursement of 
benefits through December 2020 in addition to available grants for 
implementation and expansion of State STC programs and employer 
outreach. The Department is also providing technical assistance to any 
State considering creating a new STC program. In addition, the 
Department is rolling out a multi-pronged strategy to promote State 
adoption of STC, to expand STC programs in States that already have 
programs, and to encourage States to apply for the available grants as 
soon as feasible.

                                 ______
                                 
            Questions Submitted by Hon. Robert P. Casey, Jr.
    Question. Can you provide a detailed list of all of the specific 
steps the Department of Labor has taken thus far to promote and assist 
the creation and usage of short-time compensation programs, also known 
as workshare programs?

    Answer. The STC program--also known as ``work-sharing'' or ``shared 
work''--is a lay-off aversion program in which an employer, under a 
State-approved plan, reduces the hours for a group of workers in lieu 
of layoffs, and these workers in turn receive a reduced unemployment 
benefit payment. The Department considers the STC program to be 
valuable for employers, workers, and the economy--it saves jobs, keeps 
workers employed, and helps employers maintain their skilled workers.

    The Department is working to expand the use of the STC program, 
within the scope of current law, in ways that support the reopening of 
State and local economies. Businesses that temporarily closed may use 
the STC program to bring back most or all of their employees in a 
reduced capacity when they reopen if social distancing measures, a 
decline in business, or other factors prevent operation at full 
staffing levels.

    The Department has provided guidance to States on the provisions of 
the CARES Act related to the 100 percent Federal reimbursement of STC 
benefits through December 2020 and the available grants for 
implementation and expansion of State STC programs and employer 
outreach. The Department is also actively providing technical 
assistance to all States considering creation of a new STC program and 
is also in the process of rolling out a multi-pronged strategy to 
promote the adoption of STC programs in States without them and the 
expansion of programs in States where they already exist.

    Question. What additional specific steps does the Department of 
Labor intend to take to promote and assist the creation and usage of 
workshare programs and what does the agency view as the most 
significant ongoing challenges preventing greater utilization of such 
programs?

    Answer. The Department has provided guidance to States on the STC 
provisions in the CARES Act related to 100 percent reimbursement of 
benefits through December 2020 in addition to available grants for 
implementation and expansion of State STC programs and employer 
outreach. The Department is also providing technical assistance to any 
State considering creation of a new STC program. In addition, the 
Department is rolling out a multi-pronged strategy to promote State 
adoption of STC, to expand STC programs in States that already have 
programs, and to encourage States to apply for the available grants as 
soon as feasible.

    Question. Workers with disabilities often have the slowest return 
to work after an economic downturn. The employment-to-population ratio 
for people with disabilities after the Great Recession never returned 
to pre-recession levels. The May 2020 employment-to-population ratio 
for persons with disabilities ages 16 to 64 was 27.7 percent, down from 
30.7 percent a year prior. What will the Department of Labor do to 
ensure those workers with disabilities who have lost their jobs during 
this pandemic are included in efforts to help workers return to work so 
that people with disabilities do not experience the same slow return to 
employment they experienced after the Great Recession?

    Answer. The Department seeks to respond to the needs of workers 
with disabilities and ensure that they can safely return to work.

    Persons with disabilities experienced a slower economic recovery 
after the Great Recession than persons without disabilities. 
Importantly, persons with disabilities achieved significant employment 
gains from 2014 until March 2020 (pre-COVID-19). According to the 
Current Population Survey (CPS), between 2009 and 2019, the Employment-
Population Ratio (proportion of the population employed) of working age 
persons with disabilities reached a low of 26 percent in 2014, yet 
increased steadily to 30.9 percent in 2019. The Unemployment Rate of 
working-age persons with disabilities peaked in June 2011 at 18.6 
percent and then fell gradually to 6.4 percent in May 2019, the lowest 
level on record since these data became available in 2008.

    In recent years, the Department's Office of Disability Employment 
Policy (ODEP) has implemented a number of initiatives designed to 
improve the employment outcomes of individuals with disabilities. In 
partnership with the Department's Bureau of Labor Statistics and Chief 
Evaluation Office, ODEP has taken steps to collect additional data on 
the employment of individuals with disabilities, such as adding a 
Disability Supplement survey to the Current Population Survey. These 
efforts will allow for a better understanding of the employment 
challenges experienced by individuals with disabilities.

    ODEP and the Department's Employment and Training Administration 
have worked with the States for several years as they have established 
policies and practices to better serve individuals with disabilities, 
including through the Disability Employment Initiative in which the 
Department awarded grants totaling approximately $139 million to 55 
projects in 30 States over 8 years.

    As a result of the COVID-19 pandemic, the Department bolstered the 
resources provided to workers with disabilities, and the Department 
strengthened the resources provided to employers to help them retain 
workers with disabilities. During the COVID-19 pandemic, the Department 
also increased the technical assistance provided on reasonable 
accommodations, including those related to communicable diseases and 
self-disclosure. ODEP is also working with States to help them improve 
employment outcomes for individuals with disabilities as businesses 
reopen. Additionally, the Occupational Safety and Health Administration 
issued guidance to assist employers reopening non-essential businesses 
and their employees returning to work (https://www.osha.gov/
Publications/OSHA4045.pdf).

    Question. As noted in the May 19th letter addressed to you and 
signed by 22 Senators, the CARES Act states that Disaster Unemployment 
Assistance (DUA) regulations apply to Pandemic Unemployment Assistance 
(PUA). Section 625.13(b)(2) of the regulations for DUA states that ``a 
position shall not be deemed to be suitable for an individual if the 
circumstances present any unusual risk to the health, safety, or morals 
of the individual. . . .'' Is it the position of the Department of 
Labor that employers failing to take appropriate precautions to protect 
employees from COVID-19 presents such a risk to the health and safety 
of workers? If so, why has the agency not provided guidance clarifying 
what safety guidance must be implemented by employers before their 
offers of employment to PUA recipients are deemed suitable?

    Answer. One of the Department's top priorities is to ensure that 
workers are returning to safe workplaces. OHSA has issued return to 
work guidance to provide clarity to employers regarding the steps they 
can take to keep their workplaces safe from COVID-19 (https://
www.osha.gov/Publications/OSHA4045.pdf).

    PUA eligibility, as it broadly relates to the ``available for 
work'' criterion and, more specifically, to suitability, remains a 
matter of State law. The DUA regulations generally apply to the PUA 
program. However, the DUA regulations do not apply when they conflict 
with the CARES Act. Under the PUA program, an individual is eligible 
for benefits if he is otherwise able to work and available for work 
within the meaning of applicable State law, unless he is unemployed, 
partially unemployed, or unable or unavailable to work because of one 
of the COVID-19-related reasons outlined in section 
2102(a)(3)(A)(ii)(I) of the CARES Act.

    An individual is considered available for work under State law if 
he is available for work that is suitable for him. Many State laws 
provide that work is unsuitable if it exposes an individual to safety 
risks. If an individual receiving PUA is offered work that unreasonably 
exposes him to COVID-19, the State providing those benefits could 
conclude that the work is not suitable, if permitted under the State's 
suitable work provisions. The individual would still be considered 
available to work and potentially eligible for PUA, provided the other 
eligibility requirements are met. Likewise, if an individual were to 
turn down work that would be considered suitable under State law but 
turned the work down for one of the COVID-19-related reasons in section 
2102(a)(3)(A)(ii)(I) of the CARES Act, the individual would still be 
eligible for PUA.

    Question. Please provide detailed data on the following:

    The number of COVID-19 safety and health complaints OSHA has 
received each week since January 1, 2020, including weekly national 
totals and weekly State totals.

    Answer. The table below provides the number of COVID-19 safety and 
health complaints OSHA has received per week since January 1, 2020 
(Federal OSHA only).

------------------------------------------------------------------------
                                                   Number of Complaints
------------------------------------------------------------------------
January                  All                                           1
------------------------------------------------------------------------
February                 2/2 to 2/8                                    1
------------------------------------------------------------------------
                         2/9 to 2/15                                   4
------------------------------------------------------------------------
                         2/16 to 2/22                                  3
------------------------------------------------------------------------
                         2/23 to 2/29                                  4
------------------------------------------------------------------------
March                    3/1 to 3/7                                   32
------------------------------------------------------------------------
                         3/8 to 3/14                                  86
------------------------------------------------------------------------
                         3/15 to 3/21                                500
------------------------------------------------------------------------
                         3/22 to 3/28                                503
------------------------------------------------------------------------
April                    3/29 to 4/4                                 488
------------------------------------------------------------------------
                         4/5 to 4/11                                 458
------------------------------------------------------------------------
                         4/12 to 4/18                                433
------------------------------------------------------------------------
                         4/19 to 4/25                                477
------------------------------------------------------------------------
May                      4/26 to 5/2                                 438
------------------------------------------------------------------------
                         5/3 to 5/9                                  400
------------------------------------------------------------------------
                         5/10 to 5/16                                382
------------------------------------------------------------------------
                         5/17 to 5/23                                343
------------------------------------------------------------------------
                         5/24 to 5/30                                288
------------------------------------------------------------------------
June                     5/31 to 6/6                                 279
------------------------------------------------------------------------
                         6/7 to 6/13                                 289
------------------------------------------------------------------------
                         6/14 to 6/20                                305
------------------------------------------------------------------------
                         6/21 to 6/27                                283
------------------------------------------------------------------------
July                     6/28 to 7/4                                 279
------------------------------------------------------------------------
                         7/5 to 7/11                                 361
------------------------------------------------------------------------
                         7/12 to 7/18                                356
------------------------------------------------------------------------
                         7/19 to 7/25                                299
------------------------------------------------------------------------
                         7/26 to 7/30                                185
------------------------------------------------------------------------
    Total                                                          7,477
------------------------------------------------------------------------


    Question. The number of COVID-19 whistleblower complaints OSHA has 
received each week since January 1, 2020, including weekly national 
totals and weekly State totals.

    Answer. The table below provides the number of COVID-19 
whistleblower complaints OSHA has received per week from January 1, 
2020 * through the week starting July 30th. It includes weekly 
nationwide totals and weekly State plan referral totals.
---------------------------------------------------------------------------
    * OSHA data collection began as of February 1, 2020, and the first 
whistleblower complaint was received the week of February 17, 2020.


----------------------------------------------------------------------------------------------------------------
                                     Total COVID-19 WB        State Plan COVID-19 WB    Federal OSHA COVID-19 WB
         Week  Starting            Complaints, Nationwide      Complaint Referrals             Complaints
----------------------------------------------------------------------------------------------------------------
2/3/2020                                                 0                          0                          0
----------------------------------------------------------------------------------------------------------------
2/10/2020                                                0                          0                          0
----------------------------------------------------------------------------------------------------------------
2/17/2020                                                1                          0                          1
----------------------------------------------------------------------------------------------------------------
2/24/2020                                                1                          0                          1
----------------------------------------------------------------------------------------------------------------
3/2/2020                                                 0                          0                          0
----------------------------------------------------------------------------------------------------------------
3/9/2020                                                 5                          4                          1
----------------------------------------------------------------------------------------------------------------
3/16/2020                                               20                         13                          7
----------------------------------------------------------------------------------------------------------------
3/23/2020                                               89                         32                         57
----------------------------------------------------------------------------------------------------------------
3/30/2020                                              140                         32                        108
----------------------------------------------------------------------------------------------------------------
4/6/2020                                               175                         30                        145
----------------------------------------------------------------------------------------------------------------
4/13/2020                                              176                         41                        135
----------------------------------------------------------------------------------------------------------------
4/20/2020                                              166                         42                        124
----------------------------------------------------------------------------------------------------------------
4/27/2020                                              139                         31                        108
----------------------------------------------------------------------------------------------------------------
5/4/2020                                               162                         34                        128
----------------------------------------------------------------------------------------------------------------
5/11/2020                                              127                         27                        100
----------------------------------------------------------------------------------------------------------------
5/18/2020                                              143                         18                        125
----------------------------------------------------------------------------------------------------------------
5/25/2020                                               94                         24                         70
----------------------------------------------------------------------------------------------------------------
6/1/2020                                               141                         22                        119
----------------------------------------------------------------------------------------------------------------
6/8/2020                                               117                         25                         92
----------------------------------------------------------------------------------------------------------------
6/15/2020                                               94                         38                         56
----------------------------------------------------------------------------------------------------------------
6/22/2020                                               89                         25                         64
----------------------------------------------------------------------------------------------------------------
6/29/2020                                               92                         12                         80
----------------------------------------------------------------------------------------------------------------
7/6/2020                                               121                         26                         95
----------------------------------------------------------------------------------------------------------------
7/13/2020                                              110                         36                         74
----------------------------------------------------------------------------------------------------------------
7/20/2020                                               67                          5                         62
----------------------------------------------------------------------------------------------------------------
7/27/2020                                               17                          1                         16
----------------------------------------------------------------------------------------------------------------
    Totals                                           2,286                        518                      1,764
----------------------------------------------------------------------------------------------------------------


    Question. The total number of COVID-19-related inspections OSHA has 
completed each week since January 1, 2020, including weekly national 
totals and weekly State totals.

    Answer. The table below provides the total number of COVID-19-
related inspections OSHA has opened each week since January 1, 2020 
(Federal OSHA).


------------------------------------------------------------------------
                                                  Number of Inspections
------------------------------------------------------------------------
February                 2/2 to 2/8                                    0
------------------------------------------------------------------------
                         2/9 to 2/15                                   0
------------------------------------------------------------------------
                         2/16 to 2/22                                  1
------------------------------------------------------------------------
                         2/23 to 2/29                                  0
------------------------------------------------------------------------
March                    3/1 to 3/7                                    1
------------------------------------------------------------------------
                         3/8 to 3/14                                   2
------------------------------------------------------------------------
                         3/15 to 3/21                                  0
------------------------------------------------------------------------
                         3/22 to 3/28                                  1
------------------------------------------------------------------------
April                    3/29 to 4/4                                  11
------------------------------------------------------------------------
                         4/5 to 4/11                                  19
------------------------------------------------------------------------
                         4/12 to 4/18                                 43
------------------------------------------------------------------------
                         4/19 to 4/25                                 54
------------------------------------------------------------------------
May                      4/26 to 5/2                                  79
------------------------------------------------------------------------
                         5/3 to 5/9                                   68
------------------------------------------------------------------------
                         5/10 to 5/16                                 70
------------------------------------------------------------------------
                         5/17 to 5/23                                 67
------------------------------------------------------------------------
                         5/24 to 5/30                                 42
------------------------------------------------------------------------
June                     5/31 to 6/6                                  57
------------------------------------------------------------------------
                         6/7 to 6/13                                  51
------------------------------------------------------------------------
                         6/14 to 6/20                                 42
------------------------------------------------------------------------
                         6/21 to 6/27                                 37
------------------------------------------------------------------------
July                     6/28 to 7/4                                  23
------------------------------------------------------------------------
                         7/5 to 7/11                                  32
------------------------------------------------------------------------
                         7/12 to 7/18                                 30
------------------------------------------------------------------------
                         7/19 to 7/25                                 27
------------------------------------------------------------------------
                         7/26 to 7/30                                 15
------------------------------------------------------------------------
    Total                                                            772
------------------------------------------------------------------------


    Question. The average amount of time between when OSHA received a 
COVID-19-related complaint and when an inspection occurred, when one 
did occur, since January 1, 2020.

    Answer. The average time between OSHA receiving a COVID-19-related 
complaint and conducting an inspection is 3.3 days.

    Question. The number of COVID-19-related complaints closed by OSHA 
each week since January 1, 2020, including weekly national totals and 
weekly State totals, as well as information on how many complaints were 
closed with and without an inspection having occurred.

    Answer. As of July 30, OSHA has received a total of 7,477 
complaints, both formal and nonformal, since January 1, 2020. Of those, 
5,931 are now closed. Weekly data can be found on OSHA's website at: 
https://www.osha.gov/foia/archived-covid-19-data.

    Question. The number of citations OSHA has issued in response to 
COVID-19-related complaints each week since January 1, 2020.

    Answer. As of July 30th, four COVID-19-related citations have been 
issued. One citation was issued on May 18th, and three citations were 
issued on July 13th.

    Question. The number of total inspections OSHA has conducted per 
month since January 1, 2019.

    Answer. The table below provides the number of total inspections 
OSHA has conducted per month since January 1, 2019.


------------------------------------------------------------------------
                      2019                        Number of Inspections
------------------------------------------------------------------------
January                                                            2,880
------------------------------------------------------------------------
February                                                           3,043
------------------------------------------------------------------------
March                                                              3,336
------------------------------------------------------------------------
April                                                              3,537
------------------------------------------------------------------------
May                                                                3,158
------------------------------------------------------------------------
June                                                               3,175
------------------------------------------------------------------------
July                                                               3,428
------------------------------------------------------------------------
August                                                             3,444
------------------------------------------------------------------------
September                                                          2,783
------------------------------------------------------------------------
October                                                            3,378
------------------------------------------------------------------------
November                                                           2,663
------------------------------------------------------------------------
December                                                           2,237
------------------------------------------------------------------------
    Total                                                         37,062
------------------------------------------------------------------------



------------------------------------------------------------------------
                      2020                        Number of Inspections
------------------------------------------------------------------------
January                                                            2,660
------------------------------------------------------------------------
February                                                           2,440
------------------------------------------------------------------------
March                                                              1,780
------------------------------------------------------------------------
April                                                                538
------------------------------------------------------------------------
May                                                                  888
------------------------------------------------------------------------
June                                                               1,642
------------------------------------------------------------------------
July 1-30                                                          1,214
------------------------------------------------------------------------
    Total                                                         11,162
------------------------------------------------------------------------


                                 ______
                                 
               Questions Submitted by Hon. Mark R. Warner
    Question. Secretary Scalia, as we discussed at the June 9th 
hearing, for a number of years, I have been calling on Congress to set 
up a national impact evaluation fund for States, cities, and non-
profits to experiment with portable benefits innovation for independent 
workers to make sure that every worker in America has access to a 
safety net.

    This is important for our economy as a whole--economists have found 
that access to portable benefits like health care increases business 
creation. We need that kind of innovation for worker benefits because 
this patchwork system of benefits we have doesn't go away after this 
crisis.

    I hope you can agree that in a 21st-century economy we shouldn't 
need an act of Congress to shore up our safety net for American workers 
in the next economic downturn?

    Answer. Access to affordable health insurance and retirement 
savings programs--which are often tied to employment--is important for 
American workers and their families, and is a priority for the 
administration and the Department. Working with the Department of 
Health and Human Services and the Department of the Treasury, the 
Department of Labor has taken three regulatory actions to provide 
greater choice and affordability in health coverage for American 
workers.

    The Health Reimbursement Arrangements (HRAs) rule will allow 
workers to shop for plans in the individual market and select coverage 
that best meets their needs. Individual coverage HRAs are designed to 
give working Americans and their families greater control over their 
health care by providing an additional way for employers to finance 
health insurance. Under the rule, employers will be able to use 
individual coverage HRAs to provide their workers with tax-preferred 
funds to pay for the cost of health insurance coverage that workers 
purchase in the individual market, subject to certain conditions. This 
option gives workers greater choice in coverage, increases the 
portability of their coverage, and generally improves their economic 
well-being.

    Association Health Plans (AHPs) will allow small businesses, 
including self-
employed workers, to band together by geography or industry to purchase 
high-
quality, affordable health insurance. By negotiating together, these 
small businesses gain the negotiating leverage normally enjoyed by much 
larger companies. The aim of the Department's 2018 AHP rule was to 
expand access to affordable, high-quality health-care options, 
particularly for employees of small employers. Unfortunately, a group 
of State attorneys general brought suit, and a Federal court vacated 
portions of the AHP rule. This was a setback for the 400,000 otherwise 
uninsured individuals nationwide who would have gained coverage under 
the rule. The Department has appealed the decision and is awaiting a 
ruling.

    The Short-Term, Limited-Duration Insurance (STLDI) rule is designed 
to fill gaps in coverage that may occur when an individual is 
transitioning from one plan or coverage to another plan or coverage, 
such as when in between jobs. For Americans who are priced out of ACA-
compliant insurance, access to STLDI can serve as a safeguard during a 
period of transition.

    Finally, Congress recently passed the Setting Every Community Up 
for Retirement Enhancement Act. This important legislation, which 
builds on the Association Retirement Plans (ARPs) rule issued by the 
Department in July 2019, allows employers to join multiple employer 
plans (MEPs). These plans enable employers to join retirement plans 
that are administered by a ``pooled plan provider,'' even where the 
employers do not have a common interest other than adopting the plan. 
By banding together, employers can share the administrative burden of 
providing a retirement plan.

    The Department is always willing to discuss with Congress other 
ways to provide flexible, affordable health insurance and retirement 
options for workers.

    Question. In the second panel at the June 9th hearing, we heard 
advocates say that being a member of a union is a significant predictor 
of getting UI benefits faster in this crisis, I'm sure because these 
workers have an advocate and because they have an institution working 
to get helpful information directly to them. In Sweden, Belgium, and 
Denmark, unions actually help deliver government-supported unemployment 
insurance directly to workers through their Ghent system.

    How can the Department of Labor empower unions and worker advocate 
non-
profits to help get benefits like UI to workers in an American context?

    Answer. The UI system was designed as a Federal-State partnership, 
and States have significant discretion in administering the program. 
Unions and other organizations may provide assistance to individuals 
who seek to submit unemployment claims. There is a real need for 
modernization of UI systems across States, and the Department is 
available to work with Congress and States on the modernization of 
States' UI systems.

    Question. What are some solutions we can put in place so that 
employers cannot free-ride on these programs?

    Answer. Whether a free-rider problem exists, and how to address it, 
depends on the details of the partnership arrangement. Consideration 
also should be given to the effects on non-members of the union or 
organization, particularly if employers contribute to or otherwise 
provide support for the program.

    Question. The Markup did a series of investigations on State UI 
systems and found that online benefits systems have buckled under the 
weight of unprecedented applicants. In my April 3rd letter to the 
Department, I noted that the ``Department of Labor should be taking the 
lead on innovative technological solutions that relieve the burden on 
States to recreate the wheel on their own.'' In particular, I mentioned 
that ``vendors with cloud-based solutions for PUA processing could 
streamline the process for State unemployment agencies.'' We have seen 
cloud-based upgrades work well in Rhode Island, Connecticut, Maine, and 
Mississippi, the latter of which updated to the cloud after Hurricane 
Katrina hit.

    In the context of a global pandemic and the worst economic crisis 
we've seen since the Great Depression, why did the agency not look into 
contracting with vendors for cloudbased solutions to streamline the 
process for States?

    Answer. Cloud-based solutions can potentially address a number of 
the problems with UI technology that arose during the COVID-19 
pandemic. For instance, cloud-based solutions could enable State UI 
applications to more effectively handle a high volume of claims. Under 
the longstanding Federal-State partnership toward UI, States maintain 
their own UI technology systems--which vary widely--and States are 
responsible for decisions about vendors and specific technology 
solutions. The Department has worked tirelessly, however, to help 
States develop technology solutions to deliver benefits effectively to 
eligible individuals. The Department's Chief Information Officer and 
the U.S. Digital Service provided consultation to 15 States since the 
beginning of the pandemic, which included consultation on cloudbased 
solutions. In addition, the Department-funded UI Information Technology 
Support Center provided technical assistance and shared best practices 
with 43 State unemployment insurance agencies. The help provided by the 
UI Information Technology Support Center included technology options to 
address enhanced claims volume and assistance in effectively 
implementing the new CARES Act programs. These technical assistance 
resources remain available to the States.

    Question. Can you provide an estimate to this committee on how much 
it would cost for every State to modernize its Unemployment Insurance 
IT infrastructure?

    Answer. On average, modernized State UI IT systems that handle both 
Unemployment Insurance tax and benefit administration have cost tens of 
millions of dollars and, in some cases, more than $100 million.

    Question. As you likely know, a vast majority of Americans receive 
health-care insurance from their employer. Some estimates show as many 
as 80 percent of non-Medicare eligible individuals are enrolled in 
employer based coverage.

    I am concerned that in the wake of massive job loss and in the 
midst of a global pandemic this administration has not done enough to 
ensure Americans with employer sponsored benefits have access to the 
health-care services they need.

    I have already called on Leadership here in Congress to include 
strong health-care provisions in any future legislation Congress passes 
to address COVID-19, specifically: increased support for Medicaid, 
financial support for those enrolled in COBRA coverage, reopening the 
ACA marketplace so that additional individuals can enroll, and also 
adjusting premium assistance to those currently on the ACA exchange to 
ensure more can enroll in quality coverage.

    How has your Department worked to ensure that millions of Americans 
who have lost their jobs and are at risk of losing their employer 
sponsored health-care coverage can still get the medical treatment they 
need? Is this something you have worked with HHS or the administration 
on?

    Answer. In response to the COVID-19 pandemic, the Department--in 
conjunction with the Internal Revenue Service--provided extensions to 
allow participants and beneficiaries of employee benefit plans 
additional time to make important health coverage and other matters 
affecting their benefits. The Department's guidance extended the time 
to elect COBRA continuation coverage and the date for making COBRA 
premium payments.

    Additionally, on May 1, 2020, the Department issued Frequently 
Asked Questions (FAQs) about COBRA and revised COBRA model notices. 
These model notices are intended to be used by plan administrators to 
notify plan participants and beneficiaries of their rights under COBRA 
and to notify qualified beneficiaries of their rights to elect COBRA. 
The revised COBRA model notices include new information to help 
Medicare-eligible Americans make key decisions regarding their health-
care coverage by addressing COBRA's interaction with Medicare and 
explaining that there may be advantages to enrolling in Medicare 
before, or instead of, electing COBRA. The FAQs highlight that if an 
individual is eligible for both COBRA and Medicare, electing COBRA 
coverage may affect enrollment in Medicare as well as certain out-of-
pocket costs.

    Question. What should we tell the millions of Americans who have 
lost their employer sponsored health-care coverage and may need access 
to care during the midst of this global pandemic? Shouldn't the 
administration and Leaders in Congress be working with us to strengthen 
the ACA marketplace and Medicaid, which could serve as a critical 
pathway to medical treatment for the millions of Americans losing their 
jobs? Or should we just leave them out to dry?

    Answer. There are a number of options available to individuals who 
have lost their employer-sponsored health-care coverage. For example, 
COBRA continuation coverage allows for the continuation of group health 
benefits provided by an individual's group health plan. The law 
generally applies to all group health plans maintained by private-
sector employers with 20 or more employees. Under COBRA, eligible 
employees are generally able entitled to enroll in COBRA coverage for 
18 months. Qualified beneficiaries entitled to 18 months of COBRA 
continuation coverage who experience a second qualifying event or who 
become disabled during an 18-month COBRA coverage period may be 
eligible to extend their COBRA continuation coverage for an additional 
18 months for a total of 36 months. Employers and plans are required to 
provide notice to employees and family members explaining their COBRA 
rights.

    As noted in the Department's FAQs on COBRA Continuation Health 
Coverage for Workers, eligible individuals should consider all options 
available to them. For example, an employee losing eligibility for 
group health coverage may be able to enroll in other group health 
coverage, such as a spouse's plan, without waiting until the next open 
season for enrollment.

    The loss of job-based health coverage is also a Qualifying Event 
that triggers a Special Enrollment Period in the Affordable Care Act 
(ACA) Health Insurance Marketplace. In general, individuals who have 
lost their employer coverage have up to 60 days to purchase a 
marketplace plan after the loss of health coverage. Alternatively, an 
individual may report to the marketplace a future loss of coverage up 
to 60 days in advance to avoid a gap in health coverage.

    Individuals losing employer-based coverage may also come to the 
marketplace to learn if they could qualify for Medicaid or the 
Children's Health Insurance Program (CHIP). Individuals who live in 
States that use HealthCare.gov will receive confirmation that they 
qualify from their State Medicaid or CHIP agency.

    The high costs of plans in the ACA marketplace may limit the 
attractiveness of individual market coverage options to people who do 
not qualify for premium tax credits or cost sharing reductions. As an 
alternative, individuals may be able to purchase other coverage, such 
as a short-term, limited duration insurance policy from a health 
insurance issuer in their State.

    As specified in the revised COBRA model notices issued by the 
Department of Labor on May 1, 2020, Medicare eligible individuals 
should consider whether there is an advantage to enrolling in Medicare 
before, or instead of, electing COBRA.

    Finally, individuals who have general questions about any of these 
health coverage options can contact one of the Department's benefits 
advisors at https://www.dol.gov/agencies/ebsa/about-ebsa/ask-a-
question/ask-ebsa or 1-866-444-3272.

    Question. Your Department has led administration efforts to expand 
the use of health-care plans that can discriminate against individuals 
with pre-existing conditions and often do not provide comprehensive 
coverage for individuals that purchase them.

    Notably, during the midst of this global pandemic my office has 
heard directly from Virginia residents and heard too many unfortunate 
stories about individuals who have been denied care or left with 
exorbitant health-care bills, because they have enrolled in skimpy 
plans pushed by your Department and this administration.

    One of the more egregious stories I have heard is a young man that 
received care for COVID and left the hospital with a bill of more than 
$3,000, because the skimpy plan he was enrolled in--made more 
accessible by your department--refused to cover full cost of his care.

    Could you explain why it makes sense for your department to push 
these plans that don't offer comprehensive coverage and often leave 
Americans with thousands of dollars in medical bills when they actually 
go to seek care?

    Answer. The Department has worked to provide Americans with more 
affordable options for health-care coverage. STLDI plans, which have 
existed for decades and during the previous administration, offer 
flexible and affordable coverage for American individuals and families. 
This coverage is more affordable, in part, because it generally does 
not cover all of the requirements imposed by the ACA, which raise 
prices for consumers. For Americans who cannot afford plans that 
include all ACA mandated benefits, access to STLDI plans can serve as a 
valuable alternative. For consumers with low expected health care 
costs, who are ineligible for premium tax credits and Cost Sharing 
Reductions in the ACA marketplace, and who choose STLDI plans, the 
Congressional Budget Office (CBO) expects that premiums may be as much 
as 60-percent lower than the lowest cost plans covering all mandated 
benefits.

    The purchase of STLDI plans can lead to improved health outcomes 
and give individuals greater financial protection from catastrophic 
health care expenses. Individuals purchasing STLDI plans may also gain 
broader access to health care providers than they would have through 
individual market plans, which may have narrower provider networks.

    Additionally, STLDI plans can serve as an affordable and flexible 
coverage alternative for people who expect a short coverage gap due to 
job loss. While people who lose their job may be able to remain on 
their employer plan for up to 18 months under COBRA, this typically 
requires paying the entire premium for coverages up to 102 percent of 
the cost to the plan affordable option.

    Question. My office has received dozens of complaints about these 
plans and seen too many patient stories from around the country.

    Has your department tracked these stories or heard similar 
concerns? Have you taken any steps to look into them and what should we 
tell these patients that need care?

    Answer. Because coverage may vary depending on the STLDI plan and 
any applicable State requirements, consumers should assess their 
options before selecting a plan, as with any plan selection. The August 
2018 final rule includes an important consumer protection provision, 
which seeks to ensure that consumers are aware of the potential limits 
of STLDI plans. The provision requires issuers to include an enhanced 
disclosure in the contract and in any application enrollment materials 
to inform consumers that these plans are not subject to the same 
insurance market regulations as other individual health insurance 
plans.

    The Department has not received any complaints from participants 
relating to short-term, limited duration plans. Whereas these plans 
generally operate within State regulatory environments, the Department 
lacks authority to carry out investigations in the event a complaint is 
received. When the Department receives complaints that are beyond our 
jurisdiction, those cases are referred to the appropriate regulator.

    Question. As you know, the CARES Act expanded the safety net for 
unemployed and partially unemployed individuals by creating the 
Pandemic Unemployment Assistance (PUA) program for individuals, 
particularly the self-employed, who are typically excluded from State 
unemployment programs.

    In Virginia, anecdotal reports throughout the State found that 
self-employed family child care home providers (licensed by the State) 
who care for unrelated children in their home were declined for PUA 
(and therefore, also could not access PEUC). In a survey on June 13 
conducted in Virginia, 14 family child care home providers who are 
currently closed reported filing for unemployment, half were rejected 
for PUA. Among another 31 family child care home providers who applied 
for partial unemployment, 20 (64.5 percent) have been rejected for 
partial payments. Many others reported that they have applied for 
unemployment, but have yet to hear anything related to their 
application.

    The construct of a self-employed family child care home-based 
business involves caring for children whose parents pay weekly or 
monthly fees. These providers depend on these revenues to pay their 
operating expenses. If a provider previously cared for eight children 
and now cares for two children, they have incurred a significant 
reduction in income related to their self-employment. Because the two 
children she cares for may still require her to work 40 hours per week, 
she has not had a reduction in hours, but has incurred a significant 
decline in income. It is unclear from the survey responses about a 
singular reason for rejection of unemployment claims. For example:

        Some family child care providers were told they earn too much 
income (above $158 per week).
        Others report that they were told they did not work sufficient 
hours in 2019.
        Some were told they worked too many hours currently.
        One reported that the receipt of Social Security benefits was 
the reason her application was rejected.
        Many were given no reason for the rejection of their 
application.

    The intent of the CARES Act PUA and related PEUC unemployment 
provisions was to offer a safety net for the self-employed, including 
family child care home providers.

    Can you clarify what technical changes may be needed to the PUA and 
PEUC program to ensure that self-employed family child care home-based 
providers can access either full unemployment benefits (if closed) or 
partial unemployment compensation (if they have had a significant 
reduction in income)?

    Answer. One of the qualifying conditions for an individual to 
receive PUA is that he is unemployed, partially unemployed, or unable 
or unavailable to work for a COVID-19 related reason listed in the 
CARES Act.

    The PUA program under the CARES Act is largely modeled after the 
DUA program and relies on the DUA regulatory framework where the CARES 
Act is silent. DUA regulations provide that a self-employed individual 
performing less than the customary full-time services is considered 
partially unemployed.

    Child care providers in the situation you describe may be 
considered to be partially unemployed under the DUA regulations. 
Further, under the eligibility criteria the Department added pursuant 
to the authority in CARES Act section 2102(a)(3)(A)(ii)(I)(kk), self-
employed workers who have sustained a significant diminution of their 
customary full-time services because of COVID-19 may be eligible for 
PUA where they are forced to suspend the provision of services, though 
their benefit amount may be reduced because of income. The Department's 
current guidance affirms that individuals who did not suspend the 
provision of services, but did sustain a significant diminution of 
their customary full time services due to COVID19, may be eligible for 
PUA. Additional guidance specific to childcare providers is expected 
shortly.

    Question. Can guidance be given to State labor agencies, or are 
technical corrections necessary to ensure that self-employed home-based 
child care providers can access unemployment compensation as intended?

    Answer. The Department plans to issue clarifying guidance to States 
on this matter shortly.

                                 ______
                                 
             Questions Submitted by Hon. Sheldon Whitehouse
    Question. Rhode Island has worked very hard to implement the 
Federal unemployment measures included in the CARES Act, which have 
provided many of our constituents with a lifeline during this crisis. 
While DOL has provided States with some assistance to help set up new 
systems and effectively administer benefits, more help to States is 
needed for training, technology, and other costs associated with the 
new Federal policies and high demand for benefits. Additionally, the 
COVID-19 pandemic has also cast a light on much needed technology 
upgrades for State unemployment systems.

    What is DOL doing to help ensure States like Rhode Island continue 
to receive assistance that ensures benefits continue to be delivered in 
a timely manner?

    Answer. The Department will continue to vigorously support States 
as they work to effectively distribute benefits provided under the 
CARES Act. The Department has provided technical assistance to States 
through guidance, Questions and Answers, webinars, and one-on-one 
interactions. The Department has also connected States with other 
resources, such as the Department-funded UI Integrity Center and UI 
Information Technology Support Center. Additionally, the Department's 
Chief Information Officer has offered direct IT assistance to States 
and facilitated connections with other IT resources, including the U.S. 
Digital Service.

    The Department collaborated with the U.S. Digital Service and the 
UI Information Technology Support Center, which is operated by the 
NASWA in a partnership with, and funding from, the Department, to host 
a call with the States on July 7, 2020, that focused specifically on 
innovative State practices that improve workload management in order to 
enable timely benefit payments.

    Further, I have communicated directly with Governor Raimondo on 
several occasions concerning UI, and my staff have also worked with the 
Governor's staff to assist the State.

    Question. What are DOL's long-term plans to upgrade State 
unemployment systems?

    Answer. The Department recognizes the need to modernize State UI IT 
systems. The COVID-19 pandemic has highlighted the unreliablity of 
State UI IT systems--something the Department worked to educate 
Congress about during the drafting of the CARES Act. The UI program is 
structured as a Federal-State partnership based on Federal law but 
administered by States under State law. This structure makes the 
program unique among the country's benefit programs in that States have 
significant flexibility to establish eligibility provisions, benefit 
duration and levels, and taxing structures to pay for benefits.

    While State flexibility is important, this structure and the 
variance in State laws and processes make it more difficult to develop 
efficient administrative processes and to implement technologies that 
will work across the 53 different States and territories operating UI 
programs.

    The Department believes there is opportunity for modernization 
across States and would welcome the opportunity to work with Congress 
and States to that end.

    Question. Will you commit to providing additional assistance to 
State unemployment systems for immediate and long-term needs?

    Answer. The Department is available to work with Congress and 
States on strategies to ensure States have the tools, resources, and 
funding necessary to administer their UI programs.

    Question. Has DOL identified and shared successful implementation 
and administration practices among States?

    Answer. The Department provides funding for, and partners with, the 
UI Information Technology Support Center operated by NASWA. The Center 
provides information, technical assistance, products, and tools to 
States to support the modernization of their systems and development of 
technology solutions generally; it also shares best practices. In 
addition, the Department hosts a UI Community of Practice, a 
collaborative group designed to share best practices and resources to 
help States improve UI operations.

    The Department also funds and partners with the NASWA UI Integrity 
Center, which provides a wide range of resources to help States improve 
program integrity and prevent and detect improper and fraudulent 
payments. Through the UI Integrity Center, States have shared best 
practices for processing the unprecedented number of claims received 
during the pandemic. These best practices have included the 
implementation of front-end portals for claimants and staff; the 
enhancement of infrastructure to increase online UI system capacity; 
backend systems to auto-file and process claims for benefits based on 
eligibility conditions; the implementation of a mobile-friendly site 
for initial applications, for employer submission for large layoffs, 
and for hosting a chat box for Frequently Asked Questions; the upgrade 
of existing systems, such as processors and content delivery systems; 
and the transition of existing systems to a cloud environment in order 
to enhance system capacity and improve claims processing.

    Question. Rhode Island is one of several States which has been 
targeted by malicious actors for a massive unemployment fraud scheme.

    What could DOL and States have done proactively to prevent the 
widespread fraud we have seen from organized crime rings?

    Answer. The Department had been vigorously addressing fraud in the 
UI system prior to the COVID-19 pandemic. The incentive to fraudulently 
obtain benefits under CARES Act programs was significantly increased by 
two factors. First, the relative value of benefits received was greatly 
increased by the Federal Pandemic Unemployment Compensation benefits--
the $600 weekly plus-up. Second, the statute relies on self-attestation 
by PUA claimants regarding their unemployment status and the COVID-19 
eligibility criteria, increasing the risk of fraud.

    The Department funds and partners with the UI Integrity Center 
operated by the National Association of State Workforce Agencies. The 
Center provides technical assistance and tools to States to support UI 
program integrity and the prevention, detection, and recovery of UI 
improper and fraudulent payments. Among the tools and resources 
available to States are a robust suite of training modules for State 
staff on conducting fraud investigations and a UI Integrity Data Hub 
(IDH). These tools have been valuable for States during the COVID-19 
pandemic.

    The IDH is a multi-State data tool that allows participating UI 
agencies to cross-match UI claims against a database associated with 
potentially fraudulent claims or overpayments. The resources available 
through the IDH include: a suspicious actor repository to enable States 
to submit known fraud data elements that will enable the States to 
cross-match those elements to detect multi-State fraud; suspicious IP 
addresses; multi-State claims data; a fraud alert system that allows 
States to immediately share information through the secure IDH 
environment on newly identified fraud schemes/activities in their 
States (this capability allows States to receive and review information 
on these fraud schemes and to receive updates to improve awareness 
across the community); and in July 2020, it will include an identity 
verification solution for use by all States to determine identity when 
a claim is first filed.

    The Integrity Center also hosts weekly calls to allow States to 
share their experiences with fraud activities and fraud prevention 
strategies.

    Question. What is DOL doing to recover improper payments that were 
made as a result of the fraudulent schemes recently uncovered? Are 
States being provided with help to recover funds?

    Answer. The Department issued guidance to States regarding UI 
program integrity requirements, including processes that assist in the 
recovery of overpayments. Additionally, States are working with the 
Department's Office of Inspector General, as well as local, State, and 
Federal law enforcement, as part of their recovery efforts.

    The recovery practices States use for UI payments also apply to the 
CARES Act's UI programs. These practices include offsetting future 
benefits and intercepting Federal tax returns. States are also strongly 
encouraged, where allowed by law, to intercept State tax returns, 
garnish wages, and pursue civil actions and property liens.

    In addition, the Department funds and partners with the UI 
Integrity Center, operated by NASWA. The Center provides technical 
assistance and tools to States to support UI program integrity and 
prevention, detection, and recovery of UI improper and fraudulent 
payments, as described above.

    Question. Would improving Federal and State Government 
cybersecurity infrastructure have helped identify these bad actors 
ahead of time?

    Answer. Improving Federal-State UI cybersecurity infrastructure is 
critical. Hackers and other sophisticated cyber actors can exploit 
information technology vulnerabilities to steal information and money, 
and to threaten, disrupt, and destroy the delivery of essential 
services. Stolen information from Federal and State systems, such as 
personally identifiable information, is often used by fraudsters in 
claiming UI and similar benefits. However, an improved cybersecurity 
infrastructure is not sufficient to guard against criminals' 
penetration of the UI system. Nor will it prevent a fraudulent claim 
from being filed or identify bad actors ahead of time. Identity 
verification and other sophisticated data analytics and cross-matching 
tools integrated into the benefits claim process, coupled with prompt 
investigation of suspicious cross-match hits, would help identify fraud 
early in the claims cycle and prevent the payment of fraudulent claims.

    In its Fiscal Year 2021 budget request--as well as in prior budget 
requests--the Department has proposed a package of UI program 
integrity-related legislation to increase the tools and resources 
available to the Department and States to address improper payments and 
fraud, including a provision that would require States to use the IDH.

    Question. To what degree did outdated State unemployment systems 
play in the fraudsters' ability to scam the programs?

    Answer. States are heavily dependent on IT to carry out their UI 
operations. States with obsolete systems can struggle to make 
modifications, integrate modern tools, and improve data analytics 
capacity that would combat fraud. These challenges have increased the 
risk of improper payments and fraud and underscore the need for 
modernization of State UI IT infrastructure.

    Question. The CARES Act provided temporary expansions to 
unemployment benefits including a $600 weekly boost, 13 additional 
weeks of benefits, and the inclusion of workers who wouldn't normally 
be eligible for benefits, such as independent contractors. These 
benefits have helped many families pay their bills and keep a roof over 
their heads during this difficult time.

    Do you agree that the expanded unemployment benefits have served an 
important role in helping families and the economy?

    Answer. Congress passed the CARES Act as the U.S. economy was 
shutting down. The $600 weekly payment was an important, extraordinary 
measure to support workers who in many instances were being prohibited 
from earning a living as a result of necessary public health measures 
put in place by States and locales. A study by the University of 
Chicago indicates that more than two-thirds of workers receiving 
benefits under the CARES Act have seen their wages replaced at rates 
above 100 percent, with some low-wage workers experiencing replacement 
rates above 200 percent (https://bfi.uchicago.edu/workingpaper/2020-62/
). The Congressional Budget Office, in response to a query by Chairman 
Grassley, has reported that if the $600 plus up were continued past 
July, five-sixths of the covered workers would receive higher payments 
through unemployment than by working, resulting in a more elevated 
unemployment rate than would occur otherwise. Given these 
circumstances, Congress's decision to sunset the $600 plus-up at the 
end of the month was appropriate. Unemployment benefits will continue 
to be important after July, but as the economy reopens and jobs return, 
it will be appropriate to take a different approach than taken in March 
as the economy was closing. The Department is available to work with 
Congress to fashion the approach that best support workers and economic 
growth.

    Question. What are the administration's unemployment projections 
for the months and years ahead? How did you arrive at those 
projections?

    Answer. The Department does not project data on unemployment or the 
unemployment rate.

    Question. What is DOL doing to prepare for a potential second wave 
of COVID-19 that could once again force business closures and spikes in 
the unemployment rate?

    Answer. As States reopen their economies and workers return to 
their jobs, continual consideration should be given to policies that 
support workers on the job as well as those who have not yet been able 
to return to work. The Department is available to work with Congress on 
potential strategies to this end.

    Workplace safety is a top priority for the Department. Since the 
beginning of the pandemic, OSHA has issued extensive guidance to enable 
workplaces to operate safely under the current circumstances. As of 
August 4th, OSHA has published 19 
industry-specific guidance documents, general return to work guidance, 
and 12 industry specific alerts. OSHA has published two safety posters 
that have been translated into at least 14 languages. OSHA also has 
created and posted nine short, user-friendly videos highlighting safety 
tips. The video on respirator usage received more than 58,000 views.

                                 ______
                                 
           Questions Submitted by Hon. Catherine Cortez Masto
                      financial burdens and fraud
    Question. Nevada currently has the country's highest unemployment 
rate, at nearly one-third of its workforce, and has a high percentage 
of gig workers and independent contractors. Many people who are not 
covered by UI in Nevada and other States have voiced grievances about 
long wait times, lack of transparency, and perpetual changes to the 
date of payment when filing claims with PUA. Costs to implement PUA and 
other new programs under the CARES Act have been particularly 
challenging for Nevada. Our State has had to stand up an entirely 
separate infrastructure to manage the work, including both staff and 
technology.

    Given these new costs for Nevada and other States--on top of 
significant costs associated with processing record numbers of 
unemployment claims--is the Federal Government doing enough to ensure 
that all State costs are being covered and to ensure that States are 
not saddled with additional financial burdens? What more can the 
Department do?

    Answer. The Department worked swiftly to distribute the $1 billion 
in funds made available under FFCRA to support States administration of 
regular UI programs. This funding helped States manage the 
extraordinary workload caused by the pandemic by enabling them to ramp 
up staffing and call centers, and to improve technology systems.

    The UI programs created by the CARES Act are fully federally 
funded. Congress appropriated ``such sums as necessary'' to support the 
implementation and administration of the CARES Act programs and all 
States are able to submit related implementation costs as Supplemental 
Budget Requests (SBRs) to the Department for review and approval. This 
SBR funding can include technology costs and other start-up support for 
PUA implementation. States will also receive ongoing administrative 
funding based on workload.

    Question. Is the U.S. Department of Labor providing the guidance 
necessary to combat fraud occurring in the PUA program across multiple 
States and is increasing costs for States?

    Answer. The Department has issued three fraud or program integrity-
related Unemployment Insurance Program Letters (UIPLs) to States:

        UIPL 16-20, Coronavirus Aid, Relief, and Economic Security 
(CARES) Act of 2020--Pandemic Unemployment Assistance (PUA) Program 
Operating, Financial, and Reporting Instructions.
        UIPL 16-20, Change 1, Coronavirus Aid, Relief, and Economic 
Security (CARES) Act of 2020--Pandemic Unemployment Assistance (PUA) 
Program Reporting Instructions and Questions and Answers.
        UIPL 23-20, Program Integrity for the Unemployment Insurance 
(UI) Program and the UI Programs Authorized by the Coronavirus Aid, 
Relief, and Economic Security (CARES) Act of 2020--Federal Pandemic 
Unemployment Compensation (FPUC), Pandemic Unemployment Assistance 
(PUA), and Pandemic Emergency Unemployment Compensation (PEUC) 
Programs.

    In addition, most of the 19 COVID-related UIPLs issued between 
March 12th and June 15, 2020 include UI program integrity guidance.

    The Department is vigorously working with States, the Department's 
OIG, and law enforcement to combat the increase in fraud resulting, in 
part, from the added benefits provided under the CARES Act and the 
significant increase in volume of claims. As professional criminals and 
fraudsters have targeted State UI systems, the Department has required 
States to implement for the CARES Act programs the same mandatory 
program integrity tools used for the regular UI program.
                         misclassified workers
    Question. As you know, the misclassification of independent 
contractors does not end at ``gig workers'' alone. There are countless 
workers in Nevada--entertainers, stage crew, promoters, and more--who 
all make a place like Las Vegas the capital of entertainment for 
visitors from around the world. They have all of the schedules, duties, 
and obligations of a W-2 wage employee, but none of the critical 
protections necessary in the current economic climate. I have heard 
from countless Nevadans who hear that the tourism and entertainment 
economy will take the longest to recover and who worry about what they 
can do to provide for their families when the emergency aid goes away 
and the crisis still endures for them.

    Do you agree that particular hardest hit industries or sectors of 
our economy like, those in Nevada, justify extending PUA? What would 
you recommend to Congress do to account for hardest hit industries and 
States?

    Answer. Some industries and sectors have been hit harder than 
others by the economic downturn. As the economy reopens, the 
Department's existing programs administered by the Employment and 
Training Administration will provide high-quality job training, 
employment, labor market information, and income maintenance services 
through State and local workforce development systems to all workers, 
including those in particularly hard-hit industries. The Department 
appreciates that certain industries and locales have been more 
seriously affected then others and is available to work with Congress 
on potential strategies.

    Question. Would you seek to change the criteria for those who are 
deemed eligible for PUA change if the program is extended?

    Answer. As the United States reopens and workers return to their 
jobs, policies that encourage workers to return to their jobs will be 
important, as will be continued support for those who have not yet been 
able to return to work. The Department is available to work with 
Congress on potential strategies to support workers.

    Question. What will you do to address the long-term issues raised 
by misclassification of workers and ensure that those misclassified 
employees who remain out of work will still be able to provide for 
their families?

    Answer. Employers must comply with all applicable laws and 
regulations regarding the classification of employees and other 
workers. The Department continues to provides compliance guidance to 
help ensure that workers are accurately classified, and brings 
enforcement actions where misclassification has resulted in a failure 
to pay federally mandated wages. At the same time, the Department 
recognizes that there are a variety of circumstances where workers are 
appropriately recognized as independent contractors. The Department 
recently updated its joint employer rule, and is currently examining 
the proper definition of independent contractor under the FLSA.

    The Department's Wage and Hour Division (WHD) builds and maintains 
relationships with State and Federal agencies to foster communication 
and better serve the Nation's workers and businesses. WHD has 
memorandums of understanding (MOUs) with States concerning the various 
laws enforced by the Division, including laws concerning 
misclassification. WHD's relationships with State and Federal agencies 
allow for data sharing, referrals, coordinated enforcement, joint 
outreach, and compliance assistance while maximizing the Department's 
effectiveness in helping businesses and workers.

    With respect to the UI program specifically, State UI agencies are 
responsible for determining if workers are classified correctly for 
purposes of eligibility for unemployment benefits. The tests used to 
determine if a worker is an employee or independent contractor vary 
according to State law.
                     classification of pua workers
    Question. Many gig workers are misclassified as independent 
contractors under State and Federal laws. Many of these workers are 
receiving PUA benefits, and some are receiving UI benefits as employees 
under their State laws. Senator Brown and I, along with several of our 
Senate colleagues, wrote you a letter June 8, 2020 asking you to 
clarify that States are able to provide traditional UI or PUA benefits 
depending on their State classification of these workers, rather than 
presumptively rushing to judgement and providing PUA alone.

    Is it the case that many ``gig workers'' should qualify for regular 
State UI where their States allow?

    Should States be applying their own laws to determine whether those 
workers are eligible for State UI?

    Answer. Whether ``gig workers'' are covered by a State's UI program 
depends on State law and the particular circumstances of the worker. 
State UI agencies are responsible for determining if workers are 
properly classified for purposes of eligibility for unemployment 
benefits. The tests used to determine if a worker is an employee or 
independent contractor vary according to State law. The particular 
circumstances of ``gig workers'' can also vary greatly from worker to 
worker. The Department will continue to work with the States to ensure 
that workers are accurately classified under each respective body of 
law.

    In addition, the Department exercised its authority under the CARES 
Act to add a category of PUA eligibility for ``gig workers'' and other 
self-employed individuals. UI Program Letter 16-20--Coronavirus Aid, 
Relief, and Economic Security (CARES) Act of 2020--Pandemic 
Unemployment Assistance (PUA) Program Operating, Financial, and 
Reporting Instructions (https://wdr.doleta.gov/directives/corr_doc.cfm?
DOCN=4628). If a ``gig worker'' is ineligible for regular UI benefits, 
PUA may be available so long as the individual meets the program 
requirements. PUA is available to individuals not eligible for regular 
UI benefits and who self-certify as being able and available for work, 
but unable to work because of the COVID-19 pandemic. Accordingly, a 
``gig worker'' who is not eligible for regular UI benefits may be able 
to receive PUA benefits if she meets this eligibility requirement.

    Question. Will the Department put out guidance making it clear 
that, even if workers are receiving PUA benefits, it has no bearing on 
any misclassification claim?

    Answer. PUA benefits are available to individuals who are 
ineligible for regular UI benefits and are unemployed, have reduced 
employment, or are unable or unavailable to work due to the specific 
COVID19 reasons identified in the CARES Act and the Department's 
guidance. The classification of a worker as an independent contractor 
is only relevant to the extent that independent contractors are 
traditionally not eligible for UI benefits. However, classification of 
a worker by a State UI agency is a matter of State law and the 
particular circumstances of that worker.

    Question. What should States do to get benefits into the hands of 
workers quickly, when a complete investigation is frustrated by app 
companies' failures to produce wage records?

    Answer. Under the PUA program, if a claimant is unable to 
immediately produce documentation of his prior income, he is eligible 
to receive the minimum payment until documentation is produced that 
establishes a weekly PUA benefit amount exceeding the minimum. States 
have broad flexibility as to the types of documentation that can 
support of the claimant's weekly benefit amount. The failure of an app 
company or other contractor to respond within the allotted timeframe 
should not interfere with the eligibility determination.
                          reducing wait times
    Question. I have joined my colleagues in calling for more robust 
and targeted funding for the Department of Labor's programs and ask the 
Department do all it can to expedite providing meaningful tools and 
support to States to serve Americans in need. The number one issue I 
hear from my neighbors struggling back home is the length of time to 
sign up, receive payments, or reach anyone on the phone to seek relief.

    Will you commit to preparing a plan to request and dedicate 
targeted funds for IT, training, and the staff support necessary to 
help meet the challenges of providing critical aid to those out of work 
when they need it most?

    Answer. The Department moved expeditiously following the passage of 
FFCRA to distribute the $1 billion in administrative funding made 
available to the States. These funds helped States ramp up their 
staffing and improve information technology systems to better handle 
the extraordinary increase in workload caused by the pandemic. In 
addition, the Department made funding quickly available to States 
through Supplemental Budget Requests to enable States to fund the 
technology needed to implement the CARES Act's UI programs.

    The Department recognizes the need to modernize State UI IT 
systems.

    The COVID-19 pandemic has highlighted the unreliablity of State UI 
IT systems--something the Department worked to educate Congress about 
during the drafting of the CARES Act. The UI program is structured as a 
Federal-State partnership based on Federal law but administered by 
States under State law. This structure makes the program unique among 
the country's benefit programs in that States have significant 
flexibility to establish eligibility provisions, benefit duration and 
levels, and taxing structures to pay for benefits.

    While State flexibility is important, this structure and the 
variance in State laws and processes make it more difficult to develop 
efficient administrative processes and to implement technologies that 
will work across the 53 different States and territories operating UI 
programs.

    The Department believes there is opportunity for modernization 
across States and would welcome the opportunity to work with Congress 
and States to that end.

    Question. Has a historic lack of support and funding for DOL 
worsened State agencies ability to adequately respond to this crisis? 
How can the Department bridge this gap?

    Answer. The administrative funding model for the regular UI program 
creates a particular challenge for States because the disbursement of 
the additional funding needed to cover increases in workload arrives 
after the actual increase in work. States report workload and receive 
additional funding on a quarterly basis if their workload exceeds what 
was projected for base-level funding. Thus, low workloads result in low 
administrative funding, and due to the low unemployment rate prior to 
the COVID-19 pandemic, State staffing and funding levels were reduced, 
which negatively affected the modernization of information technology 
systems and other infrastructure, such as call center operations. The 
Department is available to work with Congress to identify potential 
reforms.
                      supplementing state budgets
    Question. Many States, including Nevada, have had major holes blown 
in their State budgets in the process of reacting to the COVID-19 
crisis. Nevada in particular, a State that heavily relies on gaming for 
tax revenue, saw a 99.6-percent decrease in gaming revenue in the month 
of April. Tax revenue helps pay the salaries of first responders, 
public servants, and health-care workers. There is currently debate if 
Federal funds should be used to supplement State budgets.

    What will be the effect on unemployment nationally, if the Federal 
Government does not allow supplementation of State budgets with Federal 
funds?

    Answer. The Department does not project data on unemployment or the 
unemployment rate.
                            combating fraud
    Question. The Department of Employment, Training, and 
Rehabilitation, which is tasked with administering unemployment in my 
State, has reported unprecedented amounts of fraudulent claims tying up 
and delaying the process of getting vital relief to those who 
legitimately need relief now.

    What best practices have you seen implemented by States to better 
authenticate applicants and what solutions do you recommend to help 
verify the income of non-traditional W-2 wage earners income 
eligibility? How is the Department providing technical assistance to 
States?

    Answer. The vast majority of States use the Social Security 
Administration Cross-match provided through the Department-funded ICON 
to conduct identity verification. Many States also cross-match with 
their departments of motor vehicles or State vital statistics records 
for identity verification. Prior to the COVID-19 pandemic, the 
Department funded the implementation of Identity Verification services 
through the UI Integrity Center's Integrity Data Hub. The testing of 
Identification Verification Services (IDV) services is underway, and 
the NASWA is soliciting States to serve as early adopters for use of 
this dataset.

    To provide technical assistance to States, the Department funds and 
partners with the NASWA-operated UI Integrity Center, which offers 
States guidance and tools to support UI program integrity and 
prevention, detection, and recovery of improper or fraudulent UI 
payments.

    Question. Would addressing the instances of misclassification of 
certain contractors and workers across the country would better track 
and get those eligible invested into the system, thus better protecting 
the Federal Government and States against fraud and abuse?

    Answer. State UI agencies are responsible for determining if 
workers are misclassified for purposes of determining eligibility for 
unemployment benefits. State UI laws vary in the tests they use to 
determine if a worker is an employee or independent contractor, but 
their tests align with the common law test used by the Internal Revenue 
Service. The Department will continue to work with States to address 
this issue.
                 impact on domestic violence survivors
    Question. How is the Department working or could it work with 
States and other stakeholders to ensure survivors of domestic violence, 
sexual assault and trafficking, and stalking to be aware of their 
potential eligibility unemployment benefits?

    Answer. Many State laws already have provisions that provide 
unemployment benefits for individuals who become unemployed as a result 
of domestic violence, sexual assault and trafficking, and stalking. On 
April 27, 2020, the Department issued guidance on Unemployment 
Insurance programs created by the CARES Act. UI Program Letter 14-20, 
Coronavirus Aid, Relief, and Economic Security (CARES) Act of 2020--
Summary of Key UI Provisions and Guidance Regarding Temporary Emergency 
State Staffing Flexibility (https://wdr.doleta.gov/directives/corr_
doc.cfm?DOCN=3390). The guidance provides that if an individual is 
ineligible for regular unemployment compensation and is prevented from 
teleworking due to domestic violence, sexual violence, or stalking, the 
individual may be eligible for PUA. This determination, however, will 
depend on whether the individual is unemployed because of one of the 
COVID-19-related reasons provided in the CARES Act and the Department's 
guidance. The Department continues to work with States to ensure 
awareness of these provisions.

                                 ______
                                 
                 Prepared Statement of Beth Townsend, 
                  Director, Iowa Workforce Development
    Thank you, Chairman Grassley, for the opportunity to share with you 
a ``boots on the ground'' view of the impact of the COVID-19 pandemic 
on a State workforce agency, charged with implementing the unemployment 
programs created in the CARES Act as well as processing traditional 
unemployment claims caused by widespread layoffs due to the COVID-19 
pandemic. I want to preface my remarks by stating that I am woefully 
inadequate to sufficiently describe the Herculean efforts of every 
member of Team IWD to accomplish everything they have over the last 
three months. They have been on the front line of Iowa's response to 
the pandemic assisting hundreds of thousands of their fellow citizens 
and have unfailingly demonstrated a truly inspiring level of 
dedication, professionalism, empathy and kindness for the people of 
Iowa who lost their jobs due to the pandemic. I am so very proud of 
their efforts and have witnessed firsthand the difference they are 
making in the lives of Iowans as they help them navigate the pandemic 
and the impact it has had on our lives.

    To begin, it should be noted that Iowa has one of the more generous 
unemployment benefit programs in the country. We provide 26 weeks of 
benefits per year and our range of payments are from $87 to $591 per 
week, depending on wages and the number of dependents. The maximum 
rates by dependents are as follows: 0 dependents--up to $481; 1 
dependent--up to $500; 2 dependents--up to $518; 3 dependents--up to 
$545; and 4 dependents--up to $591.

    Some Iowans could qualify for a maximum of 52 weeks of unemployment 
from the beginning of the pandemic based on the CARES Act provisions 
and the fact Iowa has triggered extended benefits for the first time 
since 1983.

    To present the impact of the pandemic in its proper context, I want 
to first share some numbers from the week before the pandemic really 
hit Iowa. For the week ending March 14th we received 2,229 initial UI 
claims and 27,816 continuing weekly UI claims, which is consistent with 
our sustained low unemployment. We received an average of 800 calls per 
day, for a total of 4,155 received that week. We handled all but 13 
calls for a call abandonment rate of 0.31 percent with an average wait 
time of 9 seconds. In the two weeks before the pandemic, we paid 
approximately $12 million each week in unemployment benefits and paid a 
total of $129 million in benefits year to date.

    In response to community spread in the State, Governor Reynolds 
issued an executive order on March 17th that closed many of Iowa's 
businesses and overnight, tens of thousands of Iowans were laid off or 
unemployed. Immediately, the citizens of Iowa had questions and turned 
to IWD for information and support.

    We immediately saw a significant increase in call volume, going 
from 800 calls a day to over 13,000 calls a day the week of March 20th, 
or over 16 times our normal level. Our daily claims numbers increased 
six fold from just over 2,000 to over 12,000 on March 17th.

    On March 30th, the first business day after the CARES Act was 
signed into law, our call volume increased to 28,000 calls (35 times 
more). We also had our highest daily volume of claims received at over 
16,000 (compared to an average of 400-500 per day pre-pandemic).

    Iowa had the benefit of watching other states see marked increases 
in their claims numbers and customer assistance requests, so we had 
some lead time to prepare for the tidal wave we could see coming. I 
believe several things contributed significantly to the effectiveness 
of our response early on.

    First, the management of our Trust Fund since the 2008 recession 
has provided Iowa with greater policymaking flexibility throughout the 
crisis. We used data and modeling from our Labor Market Information 
division to make strategic decisions including: not charging 
contributing or reimbursable employers with current unemployment tax 
charges; delaying many employees from filing claims in the first 2 
weeks by requiring they use paid leave before filing unemployment 
claims, which was terminated after the passage of the CARES Act; and 
waiving work search requirements for claimants.

    Second, we recognized there would be a need for strong, on-going 
and regularly updated communication with our stakeholders including 
claimants, employers, legislators, the Governor's team and other 
workforce partners. We wanted a dynamic web page that we could use to 
provide constant updates. The importance of this became even more 
apparent when we saw the dramatic increase in traffic on our website 
and with social media.

    We created a specific COVID-19 tab on our website which is 
regularly updated. We utilized website banners, customer service line 
messages, news releases, social media and conducted webinars for 
claimants and employers in English and Spanish to keep customers 
informed. We made ourselves available for radio, TV, and newsprint 
interviews. Recognizing that most people filing now have never filed 
unemployment claims, we created step-by-step videos for how to file UI 
claims, including how to use a new portal to upload documents. We set 
up an email box to reach individuals who could not get through on the 
phone lines and our team attempts to clean out this email box each day. 
We continue to update FAQs for common questions received from various 
stakeholders as well as posting updated OSHA guidelines. In short, we 
used every available method to communicate with Iowans, and we continue 
to do so.

    Importantly, we have also worked hard to provide access to our 
services for non-English speaking claimants. This included posting 
important documents in nine different languages, which included the 
CARES Act information and FAQs. Our customer call center has access to 
a translation service to provide real time assistance to individuals 
when they call in. We have also worked closely with refugee agencies 
and faith based groups to provide assistance to non-English speaking 
claimants.

    Beginning in mid-March, we redeployed almost our entire staff to 
work on unemployment claims and customer service. We conducted fast 
tracked training for over 200 agency employees to assist in handling 
customer service calls and emails and provided access to subject matter 
experts who could provide assistance on more complex issues. We hired 
and trained over 90 temporary employees to handle customer service 
calls. We recruited volunteers from other State agencies to be trained 
to work in our call center. To date, we have trained 53 employees from 
6 agencies who worked full- and part-time in customer service, doing 
data entry, or helping with appeals. Our ability to quickly redirect 
and train our employees to support an ``all hands'' effort to process 
and pay UI claims was critical and cannot be overemphasized.

    Additional critical decisions and efforts included the following. 
One of our IT staff created a portal that allowed us to track, in real 
time, the number of UI claims received. We instituted mandatory 
overtime, including weekends, for claims processing and answering 
customer service emails. Pursuant to Governor Reynold's executive 
order, we expanded the number of team members that are eligible for 
overtime compensation to include exempt employees who are getting paid 
straight time over 40 hours a week. The table below shows the amount of 
overtime worked by over 400 IWD staff members.


[GRAPHIC NOT AVAILABLE IN TIFF FORMAT]


    Given the nature of the pandemic, an early consideration was the 
health and safety of our workforce. In early March we identified 
workers to telework and acquired additional equipment to be able to 
support a move to teleworking by a majority of our staff. We surveyed 
staff to determine who could work from home, who had necessary internet 
at home and who needed additional equipment. The survey also included 
who could/would work from home, including whether school or daycare 
closures impacted that answer. Our IT team distributed and tested 
equipment from home to insure it would work as needed.

    It is also important to note that, like many States, IWD uses a 
legacy system developed in 1972 to process all UI claims. Fortunately, 
we were able to make technological upgrades that expanded the hours of 
the mainframe system each day to allow staff the ability to work on 
claims for an additional 2 hours per day. These upgrades also increased 
the server capacity to process claims, increased the availability of 
our website and supported overnight and weekend batch processing to 
issue payments faster to Iowans. Even before this pandemic, Iowa 
recognized the need to modernize its UI system, and we are in the 
process of doing so. This modernization is critical for the future and 
will be absolutely essential if we ever again face a situation similar 
to COVID-19. Despite operating a legacy system, Iowa has been able to 
successfully implement three unemployment benefit programs created by 
the CARES Act in just 8 weeks.

    The following charts show the amount of UI benefits paid and claim 
numbers by program since March 16, 2020.


[GRAPHICS NOT AVAILABLE IN TIFF FORMAT]

    Now that the State has begun to reopen, we are asking where do we 
go from here and what does our agency look like? How do we help Iowans 
get back to work, how do we help upskill Iowans who have lost their 
jobs permanently and how do we help employers find the necessary 
workforce?

    As Iowa is reopening and employers are recalling workers, one thing 
has become abundantly clear. We need to incentivize people to return to 
work. When our generous State benefits are combined with the Federal 
Pandemic Unemployment Compensation (FPUC) benefit of $600 per week, 79 
percent of Iowans who have received unemployment since March 15th, have 
made more on unemployment than their average weekly wage. This is not 
because we have low wages in Iowa. In 2018, the median household income 
was almost $60,000. It is instead, based primarily on where we are 
seeing the largest impact of the pandemic--our lowest paying industries 
such as the hospitality and retail industries.


[GRAPHIC NOT AVAILABLE IN TIFF FORMAT]


    Not surprisingly, we have seen an increase in the number of 
employers notifying us that employees are refusing to return to work 
after being recalled. So far we have received over 3,000 such 
notifications. These reports all require a fact-finding interview to 
determine if the employee has a COVID-19 related reason for not 
returning which could include being in the high risk group, lack of 
child care or no access to transportation to get to work. While these 
individuals would most likely be determined not to be ``able and 
available for work'' and thus disqualified from regular unemployment 
benefits, they would nonetheless qualify for Pandemic Unemployment 
Assistance (PUA) claims. We are currently working on the process that 
would allow us to transition individuals to the PUA benefit program 
immediately after the fact-finding interview.

    Iowa State law also provides that employees who believe their 
workplace to be unsafe, can quit their jobs and still receive 
unemployment benefits. In the pandemic, this might occur if the 
employer is not taking the necessary steps to protect the employee from 
the spread of the virus. From everything I have seen, employers are 
taking necessary steps to protect their employee and customers, to 
prevent exposure and the spread of the disease within the workplace, as 
to not do so would be counter-productive to trying to reopen their 
business. These cases, however, have to be reviewed on a case by case 
basis and we have strongly encouraged open communication as the first 
step in helping employers and employees determine when, how and who can 
be returned to work safely.

    Throughout the pandemic we have worked closely with the Iowa 
Business Council, the Iowa Association of Business and Industry, State 
wide chamber alliances, economic developers and the Iowa Economic 
Development Authority (IEDA) to share information and gather input from 
our employers. We have distributed two surveys to Iowa's employers, 
more than 75,000, for IEDA to determine needs, challenges and areas 
where the State of Iowa can assist. Additionally, Governor Reynolds has 
been in constant contact with employers of all sizes and industries 
throughout the pandemic.

    One program we have been utilizing and promoting is the Voluntary 
Shared Work (VSW) program, otherwise known as short-time compensation. 
The program is intended to provide an alternative for businesses who 
would otherwise be forced to undergo layoffs due to slowdowns in 
business. VSW permits employers to reduce employees' weekly hours and 
partially replaces lost earnings with unemployment insurance benefits. 
In this way, employers are able to retain their employees and continue 
to function even while experiencing a decline in business and revenue. 
By avoiding layoffs, employees stay connected to their jobs and 
benefits while employers maintains their skilled workforce.

    Employers submit a VSW plan to Iowa Workforce Development, 
outlining the number of weeks they wish to engage in a VSW plan, and 
the percentage of the reduction in hours for their employees. The 
employees then receive that percentage of regular UI benefits equal to 
their work hour reduction. After VSW plan approval, the employer 
submits the applications for the employees and a weekly list of all the 
employees in the program, and Iowa will issue payment to those 
employees. Employees are also eligible for the additional $600 FPUC 
payment.

    Prior to the pandemic, Iowa had fewer than 10 participating 
employers, comprising approximately 800 employees. As of June 5, 2020, 
Iowa has 183 participating employers and 8,465 employees. Typical 
participants include employers in the healthcare, retail and 
manufacturing sectors.

    When talking with employers, across industries and around the 
State, the most consistent message we have received loud and clear is 
that extension of the FPUC benefits would have a significant and 
substantial adverse impact on our employers' abilities to find an 
available workforce. FPUC puts employers in a very difficult position 
of being asked by their employees to either delay recalling them or to 
recall them on a part time basis only so that claimants can continue to 
draw the additional benefits through the end of July. Allowing FPUC 
benefits to expire at the end of July, would provide incentive to 
individuals to return to work on a full time basis and an extension, we 
fear, would delay a robust reopening in the shortest time possible. 
Further, given the length of time and the amount of benefits we provide 
to Iowans, we know the short term impact of unemployment, especially as 
the class of individuals most affected by the pandemic, will be offset 
through programs like PUA, PEUC and extended benefits until at least 
the end of the calendar year.

    As you know firsthand, Senator Grassley, Iowans are hard workers 
and we have traditionally had one of the highest labor participation 
rates in the country. In January and February 2020, our labor 
participation rate was 71 percent. Even when our unemployment rate hit 
10.2 percent in April, the highest in recorded history, our labor 
participation rate was 69.2 percent. It is nonetheless difficult for 
our Iowa employers to compete with the amount of benefits currently 
being paid to individuals to stay home. And while there was a reason to 
have those benefits when the bill was passed because we needed to crush 
the curve, now is the time to get people back to work. Those who are 
still unable to go to work because of a medical condition, being in the 
high risk category, not having child care or transportation will 
continue to be eligible for our generous benefits through the PUA, PEUC 
and extended benefits.

    In the alternative, if FPUC benefits are extended, I urge you to 
craft legislation that is not ``one size fits all.'' I know $600 a week 
in benefits in Iowa goes much further than it does in a major 
metropolitan area or coastal states where the cost of living is 
substantially higher. I have seen recommendations that would tie the 
availability of the benefits to a State's unemployment rate so that 
once a State falls below the rate, the benefits would end. Or consider 
a significantly reduced flat rate for a short period of time that would 
cover a transition period for the few months after July. These 
alternatives would provide a continued safety net in areas where 
recovery is slower and not be a drag on the available workforce in 
states that are reopening more quickly.

    Something that has not been talked about is the consequence of the 
additional benefits to claimants if they decline to return to work. If 
it is determined they did not have a good reason to refuse to return to 
work and are not entitled to benefits after the date of the recall, 
they can accrue significant debt in the form of overpayments. Depending 
on the program they are being paid from, future unemployment benefits 
will be offset against the debt until it is repaid, meaning they may 
not qualify for benefits for what could be a substantial period of 
time. Iowa also participates in the Treasury Offset Program that 
collects State and Federal tax refunds toward overpayments. This could 
place individuals in a position where they have quit their jobs, lost 
their benefits and incurred a large debt to the State.

    I would also ask you to consider the following recommendations when 
debating programs moving forward. First, limit the calculations a State 
must perform to pay out Federal benefits. A flat rate, for all those 
eligible for a program, is absolutely essential to being able to 
implement the program quickly and efficiently. Regardless of the age of 
the UI system a State uses, these are all new programs that have to be 
developed, tested and implemented beginning with the application, 
review, approval and payment process. Thus, trying to implement a 
percentage of wages or maximum wage as a percentage of benefits 
received would require an individual review of each claim, thereby 
creating a labor intensive and lengthy process for each claim.

    A benefit like a payroll tax holiday would be easier to implement, 
would benefit everyone in the workforce, including those already or who 
remained in the workforce, and would not run through the workforce 
systems.

    If a new unemployment benefit program is created, please consider a 
prospective date of implementation. This would give the U.S. Department 
of Labor time to provide the necessary guidance to State workforce 
agencies and time to develop the program before it is deployed, as well 
as manage the expectations of people receiving the payments. Like most 
states, we started receiving calls on March 30th from claimants 
expecting payment of all three of the CARES Act benefit programs. We 
have to implement the programs one at a time, which began with FPUC, 
PUA and finally PEUC.

    While it feels like we have been living in the pandemic for years 
instead of weeks, it has only been 9 weeks since the CARES Act was 
passed. While we were able to implement and pay three brand new benefit 
programs in 8 weeks, it was still a challenging and difficult process 
to manage the expectations of individuals eligible under various 
programs. Implementation is also driven by how long it takes USDOL to 
provide necessary guidance and they need an appropriate amount of time 
to be able to provide it. While I fully understand and empathize with 
individuals in need of benefits, it was nonetheless difficult to 
imagine for us to do things any faster than we did because we could not 
work more than the 60-70 hours a week my staff has been working since 
the middle of March. Additionally, my staff bore the brunt of Iowans 
anxieties, anger and frustrations when they were not paid in the time 
they needed or desired.

    Fraud issues have also become a larger issue for State workforce 
agencies. We are seeing identity theft primarily. One of the issues 
that concerns us is the self-
attestation that PUA permitted, which increases the likelihood for 
identity theft and fraud. For instance, I received an email last week 
from an officer in one of our larger employers who had been notified of 
an unemployment claim filed in his name. Fortunately, our identity 
verification processes caught it and no benefits had been paid. For the 
self-employed there is no currently no way to verify that they have not 
returned to work while receiving benefits beyond their self-
attestation. We believe requiring eligible individuals to provide more 
proof in support of their claims would reduce the number of fraudulent 
claims. USDOL is also providing new and better guidance to address 
fraud in PUA claims as well will be helpful when implemented.

    With regard to training workers whose jobs have been lost as a 
result of the pandemic, Iowa is well positioned. Over the past 3 years 
Iowa has developed and implemented Future Ready Iowa, a workforce 
training program with many different initiatives to increase the 
educational attainment of Iowans to 70 percent by 2025. Last year the 
legislature committed over $20M in funds to support several different 
programs that would increase access to training programs at our local 
community colleges through programs like the Last Dollar Scholarship 
program that paid the difference between the student's non-repayable 
financial aid and the cost of tuition and fees in high demand 
occupations. The program has been an overwhelming success and our 
partners at the community colleges have worked hard to recruit Iowans 
into programs that will provide high paying jobs in career fields with 
projected growth. We believe we can use the infrastructure developed 
through Future Ready Iowa will assist us in moving people through 
training programs faster and aid our recovery efforts considerably.

    Additionally, we recognize that the world we are re-entering is 
different from the one we left a few short months ago and we are 
adapting the way we deliver workforce services to ensure we can fulfill 
our mission of developing a future ready workforce in Iowa. IWD is 
adding additional virtual training opportunities and utilizing virtual 
job fair technology to maintain the health and safety of staff, job 
seekers and employers while providing the opportunities needed to get 
people back to work and for employers to find the workforce they need.

    In closing, I recognize that Iowa is a smaller State that has not 
had as many challenges as other states in assisting those who have lost 
their jobs due to the pandemic. However, I also think Iowa is unique in 
that we are a State that knows the value and necessity of 
collaboration, that we are stronger together. From the beginning we 
have benefitted from the strong, steady and mature leadership Governor 
Reynolds has demonstrated on a daily basis. She has set an expectation 
that all State agencies would work together to solve problems and 
reduce barriers and that we would be transparent and available to all 
of our stakeholders as quickly as we could. We have also worked with 
all of Iowa's congressional delegations on an almost daily basis to 
address constituent concerns and to help answer questions for our 
elected representatives as they try to navigate the pandemic in the 
best way possible for all Iowans. I would like to publicly thank my 
team at Iowa Workforce Development for their hard work, 
professionalism, and dedication. Every day, they demonstrate what it is 
to have a servant's heart.

    I hope the committee will also recognize that all State workforce 
agencies have worked hard to serve their citizens and implement the 
Federal legislation passed to provide necessary pandemic assistance. We 
have been called on to create and implement huge Federal programs 
through the unemployment system that are beyond what we have ever done 
before or that the systems were designed to do. I know from speaking 
with my peers across the country that the staff of our State workforce 
agencies have worked long days, long weeks and without breaks since the 
pandemic struck. They have sacrificed time with their families in order 
to be available to do the mountain of work that we have been required 
to do. I believe, like Iowa, they will continue to work hard when we 
move into the recovery phase, getting people back to work and helping 
employers find a skilled and available workforce.

    I am humbled and proud to lead our Iowa team. Thank you again 
Senator Grassley and members of the Senate Finance Committee for the 
opportunity to share this information with you.
                              useful links
Iowa Workforce Development webpage: https://
www.iowaworkforcedevelopment.
gov/.

COVID-19 webpage: https://www.iowaworkforcedevelopment.gov/COVID-19.

Labor Market Information webpage: https://
www.iowaworkforcedevelopment.gov/labor-market-information-division.

Future Ready Iowa: https://www.futurereadyiowa.gov/.

                                 ______
                                 
          Questions Submitted for the Record to Beth Townsend
                 Question Submitted by Hon. John Thune
    Question. Unemployment offices in States across the Nation continue 
to be overwhelmed with unemployment claims, even as the number of 
unemployment claims level off. In addition, States' unemployment 
systems are dated. These two factors likely make additional changes to 
unemployment programs potentially overly burdensome on unemployment 
agencies.

    Can you speak to the general capacities of State unemployment 
systems and to what degree they may be able to accommodate further 
programmatic changes in terms of the administration of unemployment 
compensation?

    Answer. Generally speaking, I agree that many State unemployment 
systems are dated and changes to these systems take time to implement. 
However, even modernized systems have had difficulty implementing the 
CARES Act which is indicative of the complexity of the changes 
necessary in order to implement programs that are beyond traditional 
unemployment programs. Each new program created by Congress increases 
the burden on an already stressed system and risks degrading overall 
reliability and the customer experience. We have been essentially 
layering one program on top of another and each new program creates a 
new layer. Obviously the more layers we add, the more it jeopardizes 
the overall performance of our UI processing system. Each new layer 
also requires additional testing to ensure that when the new program is 
implemented, it does not degrade or interrupt programs already 
implemented. Making changes to existing programs will be far easier to 
implement versus creating yet another, different program,that will take 
1-2 months minimum to implement.

                                 ______
                                 
              Question Submitted by Hon. Patrick J. Toomey
    Question. In Pennsylvania, the State unemployment agency has 
discussed the difficulties of administering the PUA system in 
particular. In addition to the initial lack of guidance, this program 
is particularly ripe for fraud, given that claimants can self-certify 
their own eligibility and that they don't have to provide up-front 
evidence of prior income.

    Are the problems with administering PUA in particular due to 
primarily the inherent structure of the program (for example, the fact 
that it is self-certifying), or could they be largely resolved by a 
modernized IT system?

    Answer. Both of those factors have contributed to the difficulties 
of administering the PUA program.

    A modernized UI system would have enabled Iowa to administer PUA 
benefits more quickly. Even basic programmatic changes such as updating 
application questions and fields for the PUA program take longer to 
implement on a mainframe with COBOL code than on a modern system.

    In addition to technology limitations, the structure of the PUA 
program does present inherent implementation challenges. For example, 
due to the amount of self-certification that the PUA program permits, 
Iowa was required to review each application individually. It was also 
very difficult to implement a process to make retroactive payments 
effective 2 months before the CARES Act was signed into law. It is also 
worth noting that because CARES Act payments must be processed through 
the same mechanism as State UI payments, there is always a risk that 
introducing a new program with different rules for issuing payments 
will affect all payrolls. As a result, the payroll process requires 
extensive testing. Unfortunately, issuing payments through a separate 
payroll process could require even more thorough testing with a longer 
implementation timeline.

    I also agree that the initial lack of guidance created problems for 
Iowa's administration of the PUA program. U.S. Department of Labor 
(USDOL) made Iowa aware of additional PUA program requirements months 
after payments were first issued that then required changes to our 
system. This difficulty was compounded by the short deadlines imposed 
by the USDOL to implement these additional requirements under threat of 
program discontinuance placed significant strain on our business and 
technology teams, not to mention additional stress to a staff that had 
been working 70 hours a week without days off for several months.

                                 ______
                                 
                 Questions Submitted by Hon. Todd Young
                               ui systems
    Question. Secretary Scalia spoke at length in his testimony about 
how ``one of the greatest challenges in the UI system is the 
information technology infrastructure used by States to administer 
their programs''--which was primarily why the $600 ``plus-up'' in the 
CARES Act was set at a flat rate. But, these system challenges aren't 
new--these same system issues occurred back during the Great Recession. 
You also describe the complexities with Iowa's legacy system in your 
testimony.

    What system changes do you think would help States be better 
prepared for the longterm in case we ever face a situation similar to 
COVID-19 again?

    Answer. At the outset, it is necessary to think of the ``UI 
system'' as more than simply technology. Without question, upgrading 
the technology from mainframe/COBOL to a more flexible architecture is 
critical. However, equally important are aspects of the UI system that 
involve business rules and processes, financial considerations, and 
communication to customers. With this in mind, the following changes 
could help States be better prepared in the long-term if we ever face a 
similar situation in the future:

        Require a UI System Review and Plan similar to the State 
Quality Service Plan (SQSP) that is submitted to USDOL. Such a plan 
should include the staffing plan; information technology changes and 
requirements; and templates for customer notifications.

    Encourage States to change State laws and administrative codes to 
provide the Director (or equivalent) of the State UI Agency with 
greater authority and flexibility to implement changes when an 
emergency is declared by the President or Governor.
                        work search requirement
    Question. Most States, including Indiana, waived job search 
requirements in order to encourage people to stay home and prevent 
further spread of the virus. But, now as States start to reopen, 
employers are recalling their workers or hiring additional staff to get 
their businesses up and running--and are having difficulty doing so 
because of the additional UI plus-up.

    At what point will be it reasonable for workers to be expected to 
search for work as a condition of receiving unemployment?

    How will that happen?

    Answer. Iowa has not determined when the work search requirement 
will be reinstated, but I expect it will be shortly after the end of 
July. We will provide Iowans more than 2 weeks' notice prior to the 
selected date that the work search requirement is being reinstated. 
Most businesses in Iowa have reopened their doors to bring people back 
to work. Additionally, the vast majority of job searches are conducted 
online, so the risk of COVID-19 exposure while conducting a job search 
is low and our offices remain closed to the public as we continue to 
need staff working with UI claims processing.

    Iowa will continue to consider the following suitability factors 
when applying the work search requirement: comparable work to prior 
employment; comparable to work performed in similar positions in 
industry; pay and hours similar to prior employment; and worker safety.

    Iowa will continue to consider Iowans for PUA if unable to work as 
a result of COVID-19.

                  $600/ui systems--future legislation
    Question. Some recent proposals in the Senate have included 
triggers and other mechanisms to continue the $600 plus-up post-July. 
Based off what was described in many of your testimonies about the 
complexities surrounding the rigidity and age of State UI systems.

    Is it even possible for States to implement these types of 
proposals?

    If so, how long would claimants have to wait until those States get 
those systems up and running?

    Answer. This is not something that could be implemented quickly or 
easily. Iowa is resource constrained and implementing any new program 
by ``retrofitting'' it into the existing UI system will always present 
challenges. Iowa is pursuing modernization, but with a 2-year timeline, 
we cannot rely on modernization to address the existing crisis. In the 
current environment, any new program will require several weeks to 
several months to implement. On the spectrum of timeframes, Iowa could 
implement an across-the-board flat reduction in the amount of FPUC 
payments or a change to a flat percentage of existing benefits (i.e., 
50 percent of regular benefits is the new FPUC amount) very quickly; on 
the other hand, it would take many months--at best--for us and other 
State unemployment agencies to implement an entirely new return-to-work 
bonus program which is outside the scope of our experience. If such a 
plan were pursued, it would be vital to educate the public on the front 
end that these payments would not be available for several months (thus 
creating a gap between the end of the FPUC payments and when a new 
program can be implemented). The reality of this type of program would 
be that most people would go back to work full time because the FPUC 
benefits would end at the end of July and it will take several months 
before any additional benefits could be paid, resulting in individuals 
getting a lump sum retroactive payment covering the time between the 
end of June and the time they returned to work full time.

                                 ______
                                 
             Questions Submitted by Hon. Michael F. Bennet
    Question. Thank you for making very clear that Iowa would not be 
able to administer a wage replacement regime (in lieu of a flat 
additional payment) by the end of July, when the $600 per week 
additional payment is scheduled to expire.

    Please provide separate answers to each of the following questions.

    Are you aware of any States that will be prepared to--instead of 
administering a flat additional benefit like the $600--replace 100 
percent of wages for all workers who continue to be unemployed or 
remain on furlough, given the ongoing health risks, lack of child care, 
and lack of available jobs?

    Answer. Individuals who are eligible for PUA will continue 
receiving those payments until the end of December. Iowa would be 
unable to implement 100-percent wage replacement as the new FPUC 
payment quickly or easily. If such a plan were pursued, it would be 
vital to educate the public on the front end that these payments would 
not be available for several months (thus creating a gap between the 
end of the FPUC payments at the end of July and when a new program can 
be implemented). The reality of this type of program would be that most 
people would go back to work full time because the FPUC benefits would 
end at the end of July and it will take several months before any 
additional FPUC benefits could be paid, resulting in individuals 
getting a lump sum retroactive payment covering the time between the 
end of June and the time they returned to work full time. For those 
unable to return to work because of medical, childcare or 
transportation issues, they would see several months with only PUA 
benefits available.

    Question. How much money and time would it take for your State to 
build a system that could handle adjusting wage replacement rates, 
rather than adding a fixed payment like the $600 top-up?

    Answer. Our best estimate is that it would take a business and 
technology team 3-6 months to plan, develop, and test for full wage 
replacement, and would cost between $150K-$600K. This 3-6-month time 
frame begins from the point at which program requirements are received 
and no payments could be made before the end of that time frame for 
FPUC payments.

    Question. In other words, if we extended a flat benefit beyond July 
to allow for additional time for States to upgrade their systems, how 
long should we extend that flat benefit to ensure that States have 
enough time to transition to a wage replacement regime?

    Answer. As described above, a minimum of 3-6 months. Additionally, 
it is imperative that any program changes are not applied 
retroactively. In Iowa, retroactive changes to any payment requires 
manual adjustments to each claim and weekly payment to make up the 
difference. Another fact to keep in mind is that, in 3-6 months, we 
would expect the number of individuals needing or eligible for 
continued benefits would be minimal as we are hopeful that most 
companies and employers will have recalled their staff in that 3-6 
month period and that there will be sufficient safety protocols in 
place to insure all but those in the high risk category could return to 
work.

                                 ______
                                 
                 Prepared Statement of Hon. Ron Wyden, 
                       a U.S. Senator From Oregon
    There's a lot for us to talk about today, and I want to start with 
Friday's jobs report. The President celebrated like it was the greatest 
victory since the end of World War II, but let's put this in 
perspective.

    Speaking conservatively, more than 20 million Americans are still 
out of work today, and I bet you're not celebrating if you're among the 
many people who don't know how they're going to pay the rent or put 
food on the table this month. Watching the President celebrate victory 
in the middle of this jobs crisis is yet another sign that he doesn't 
understand what it's like for people born without a real estate 
portfolio.

    First, let's recall exactly how the Senate got here, starting in 
March. The pandemic hit, the economy went into lockdown, and 
unemployment shot into the stratosphere. So when CARES Act negotiations 
began, Democrats demanded an expansion to unemployment benefits that 
would bring more workers into the system and fully replace people's 
lost wages.

    Throughout the negotiations, Secretary Scalia said it couldn't be 
done because States run UI programs on Bronze-Age technology that can't 
crunch the numbers for individual workers. We said that doing nothing 
is unacceptable. When Secretary Scalia failed to offer a plan to get 
benefits out in a timely manner, Democrats proposed a flat-sum 
solution: $600 per week across the board on top of traditional 
benefits, adding up to full wage replacement for the typical worker.

    Now fast forward to today. Here's what our country's still dealing 
with. The pandemic is still killing thousands of Americans every week. 
The nearly 2 million new unemployment claims filed last week triple the 
highest number of claims made in any week during the Great Recession.

    It's a national scandal that African-Americans are not only dying 
of COVID-19 at much higher rates, they're also suffering vastly more 
economic pain than virtually anybody else. Black unemployment is 
disproportionately high. And because black people have been 
systematically excluded from opportunity and wealth in America, it's a 
lot less likely they have the financial resources to weather this 
storm. For the President to say that the recovery has arrived and 
everything is turning into sunshine will only perpetuate that economic 
injustice.

    So bottom line, this crisis will go on a lot longer if the Trump 
administration and Senate Republicans start yanking out these key 
pillars of economic support like supercharged unemployment benefits. 
Main Street businesses nationwide are hanging on by a thread. Workers 
could lose their homes and fall through the cracks if the Senate does 
not help them.

    Now I want to respond to a few arguments I've heard against 
supercharged unemployment benefits. First is the idea that Americans 
who've lost their jobs in the pandemic are going to be perfectly happy 
to sit around instead of going back to work. In my view, that is an 
insult to America's workers. It's also a misunderstanding of how the 
system functions.

    Talk to the out-of-work Oregonians I've spoken with during this 
crisis, and you'll hear from people who want to get back to their jobs. 
They believe in the dignity of work. They want to earn their pay and 
support their families and return to the lives they had before. They 
know that they're more likely to get ahead if they're working and 
moving up the economic ladder than being on unemployment.

    Second, members of this committee said it's somehow unhealthy for 
people to get unemployment benefits during this crisis. This is just 
fundamentally out of touch with the realities Americans are facing in 
this crisis. These benefits are what's saving millions of jobless 
people from hunger and homelessness in the middle of this pandemic. 
Forcing people back into contagious workplaces would also further 
spread the virus that has killed 110,000 Americans and turned nursing 
homes nationwide into scenes of tragedy.

    Third, I've heard talk among Republican Senators of cutting the 
expanded benefits potentially by half. So let's get this straight. 
Between the CARES Act and Fed lending programs, big corporations are 
getting trillions of dollars in support to weather this crisis, but 
Congress is going to start pinching pennies when the little guy needs 
help? The system is already rigged to favor the powerful and wealthy. 
The Congress certainly should not stack the deck any further.

    Our unemployment insurance system, created in the 1930s, should 
have been modernized long ago to cover the self-employed, gig workers, 
and freelancers. Long ago, benefits should have been tied to economic 
conditions on the ground.

    I believe that Congress should also examine whether a Federal 
approach for administering unemployment benefits could do a better job 
than this quilt of 50 different State systems operating today. Nobody 
predicted the volume of claims they'd be hit with in this crisis, but 
whether it's due to neglect or political sabotage, too many of these 
State systems are failing the people who are in desperate need of help.

    I'll close on one final thought. American workers are not to blame 
for the jobs crisis that this country still faces today. By now 
everybody here has seen images of cars stacked up for miles at food 
bank distribution centers around the country. Those are modern-day 
bread lines. With so many people out of work, America is on the 
precipice of an eviction tsunami, particularly in the black community.

    Supercharging unemployment benefits--fully replacing people's lost 
wages and bringing gig workers and freelancers into the system--was the 
right thing to do. I know that's not just the opinion of the Democrats 
who got it done, because the President is absurdly taking credit for 
the expansion in misleading campaign ads on the airwaves right now.

    Every Republican member of this committee voted to strip the 
expanded benefits and slow down their distribution, and at least a few 
of them turned around and sent out op-eds and press releases touting 
that same expansion. The Chutzpah Caucus at work.

    So the Senate has a choice to make. It's about fairness for the 
tens of millions out of work. It's about fairness for African Americans 
who are disproportionately suffering. It's about fairness for the blue-
collar worker who looks around and sees a whole lot more support going 
to corporations than to workers.

    The only fair choice to make is to extend supercharged unemployment 
benefits, and do it now.

                               ______                                 

                             Communications

                              ----------                              


                   American Federation of Labor and 
             Congress of Industrial Organizations (AFL-CIO)

                            815 16th St., NW

                          Washington, DC 20006

The American Federation of Labor and Congress of Industrial 
Organizations (AFL-CIO) is a federation of 56 unions that represent 
12.5 million workingmen and women. We strive to ensure that every 
person who works in this country receives decent pay, good benefits, 
safe working conditions, fair treatment, and full due process. Our 
members work in every economic sector and at all wage and skill levels. 
We represent workers in every state, the District of Columbia, Guam, 
Mariana Islands, Puerto Rico, and the U.S. Virgin Islands.

The global pandemic crisis has helped to expose the fundamental 
inequities of our society and the need to strengthen and modernize our 
85-year-old unemployment compensation system. Incorporated in the 
Social Security Act of 1935 in response to lingering effects of the 
Great Depression, our unemployment insurance system was established 
when most workers could expect to maintain full time jobs and spend 
their entire career with a single employer. It was designed as a state 
and federal program that limited eligibility to workers in certain key 
sectors of the economy. Agricultural, domestic, government, and non-
profit workers were among those excluded from coverage, as were the 
self-employed.

Today the nature of work has changed, as have the needs of today's 
workforce. Two income households are increasingly necessary, and the 
service sector of our economy has seen tremendous growth. Many more 
workers have multiple part-time jobs, and no stable wages from a single 
employer. Even before the global pandemic, there was an apparent need 
to reform our unemployment system in order to meet the challenges 
workers confront today.

The Coronavirus Aid, Relief, and Economic Security Act (CARES Act) was 
a necessary response to the unprecedented health and economic crises 
created by the corona pandemic and has helped to avert a complete 
economic collapse. However, the problems the CARES ACT addressed are 
far from over. COVID-19 deaths and hospitalizations continue to mount 
as states and localities reopen, and growing number of even 
asymptomatic people have had to self-quarantine after testing positive 
for the virus.

Key provisions of the CARES Act address the inadequacy of our 
antiquated unemployment system by providing for full federal funding of 
new programs and giving states additional administrative funds for 
programmatic operations. The Pandemic Unemployment Assistance (PUA) 
program established by the CARES ACT allows independent contractors, 
free-lancers, misclassified workers, part-time workers, the self-
employed, and those with irregular work histories to access some 
unemployment benefits for the first time. Pandemic Unemployment 
Assistance also made those who have exhausted all other unemployment 
benefits, or are unable to work due to illness, quarantine or 
caregiving needs eligible for assistance. Although PUA benefits are far 
less than standard unemployment benefits, eleven million workers, or 
thirty percent of current benefit recipients, would otherwise receive 
absolutely no income support. This program is scheduled to expire 
December 31 2020, but we urge Congress to make this expansion of 
eligibility for unemployment insurance permanent.

The CARES Act created Pandemic Unemployment Compensation (PUC) a 
federally funded $600 per week benefit that is set to expire July 31, 
2020. These payments need to be extended, as they have helped workers 
make COBRA payments to maintain their health insurance, forestall 
eviction, keep food on the table, and postpone retirement account 
withdrawals. This $600 PUC benefit makes a profound difference to the 
61% percent of working adults who obtain health insurance through their 
jobs, and lose that insurance if and when they are unemployed. These 
supplemental funds not only support workers and their families, but 
also help to stimulate local communities where any remaining funds are 
likely to be spent. We urge Congress to extend these vital payments.

The CARES ACT also established an extra 13 weeks of state UI benefits 
for Pandemic Emergency Unemployment Compensation (PEUC). The additional 
13 weeks become available only after a worker has exhausted all their 
regular state UI benefits and will be particularly important to workers 
in the eight states that provide fewer than 26 weeks of UI benefits. 
The provision of 13 PEUC weeks reflects an important recognition that 
it is virtually impossible to predict the duration of the coronavirus 
pandemic or the extent of this extraordinary economic downturn.

The continuation of PUA, PUC, and PEUC benefits will help support 
families and stabilizes an economy that has seen a sharp decline in 
many sectors. State and local governments that have had to provide more 
services to residents while deprived of their usual commercial tax base 
and have already begun to furlough workers. State and local governments 
lost 585,000 jobs in May, and over 900,000 jobs in April. The public 
sector job loss exceeds all the jobs lost in the entire US economy 
during the worst month of the Great Recession.

The overall unemployment rate in the construction sector is 12.7%. 
There are now more than one million-unemployed construction workers, 
and while employers' added 464,000 workers in May, that makes up only 
about half of the jobs lost in April. The 33,000 jobs lost from the 
highway, street, and bridge sector in April represent the biggest one 
month drop since 1990, when the Bureau of Labor Statistics began 
recording industry group data. Another 23,400 jobs lost in the oil and 
gas pipeline sector represent a 16% drop, with 50,000 fewer jobs now 
than last year. By the end of July another 2,871 layoffs are expected 
from Boeing, one company that has already shed 1,331 engineers and 
technicians through immediate ``voluntary'' layoffs.

Corporate layoffs and retail bankruptcies continue to be announced 
weekly, but for an individual worker the unemployment rate is 100 or 
zero. Congress must do all it can to restore our unemployment system in 
order to protect all workers who lose jobs through no fault of their 
own.

                                 ______
                                 
                        Center for Fiscal Equity

                        14448 Parkvale Road, #6

                       Rockville, Maryland 20853

                      [email protected]

                      Statement of Michael Bindner

Chairman Grassley and Ranking Member Wyden, thank you for the 
opportunity to address this issue. I have included attachments on long-
term economic, social service and tax reforms that will be necessary to 
get people back to work once this crisis is over.

Earlier this year, I predicted a recession due to bubbles in 
Cryptocurrency and in mortgage-backed securities holding rental housing 
assets, which I communicated to the House Budget Committee in January. 
A world-wide pandemic was the furthest thing from my mind. I reiterated 
these points to the Senate Budget Committee as I was suffering from a 
bad cold. Five days later, that cold turned out to be SARSC0V2.

In general, the current economy is more medical furlough than 
recession. Increasing and adding benefits for many turns it into paid 
sick leave funded by government, which is entirely appropriate. It is 
also dangerous. The implementation of CARES, particularly the 
Unemployment Insurance relief, is fraught with problems.

The States have not been able to absorb the money. There are simply too 
many people in need of assistance. The lump sum payments, which were 
negotiated by Secretary of the Treasury, Steve Mnuchin, made sure that 
landlords who had leveraged their properties into mortgaged backed 
securities would get paid.

This is convenient for the Secretary, as he helped set up these 
securities to extract the equity from the limited liability companies 
that he and his partners own. Aaron Glantz, who documented the 
establishment of these firms and securities should be called to testify 
before another round of stimulus checks are routed through renters to 
the Secretary and his partners.

The immediate danger, which no one is talking about (call me Cassandra) 
is that in short order, a large percentage of the unemployed are about 
to get large back payments from their state governments. This is 
occurring as some workers have recovered, but many in America's 
Heartland are about to need that paid sick leave as SARSCov2 reaches 
their states. Recent reports indicate that food prices are inflating as 
the economy continues to stagnate.

This is what is known as a perfect storm. Economic historians will 
likely call this period of time HYPERSTAGFLATION. Sadly, the genie 
cannot be put back in the bottle, although the best course for now is 
not to panic if (and when) the storm breaks.

Thank you again for the opportunity to add our comments to the debate. 
Please contact us if we can be of any assistance or contribute direct 
testimony.

Attachment--Addressing the Economic Impacts of COVID-19, House Budget 
Committee, June 3, 2020

This crisis shows some of the systemic weakness in the economy. Too 
many people are paid too little. This creates a second-tier economy of 
low wages and subpar products. More pay through a higher minimum will 
mean better products and more people working. If layoffs result from a 
higher wage, a paid training program (to meet opportunity costs of 
trainees) from ESL to Associates degrees will add to a push for higher 
wages. A higher minimum wage could also be used to recalculate benefits 
for retirees and the disabled. The increased economic activity and 
higher revenues would pay for themselves.

Low wages do not benefit shareholders, who receive a normal profit. 
Other workers benefit because their wages rise with the minimum. Only 
the CEO-Donor class are made worse off. Their wage theft is natural, 
given their low marginal tax rate in comparison to the time of 
Eisenhower and Kennedy (whose tax cuts only took effect in 1965), the 
differential between productivity and wages started about a year after 
the tax cuts took effect. The effect was multiplied in 1982.

Low family wages are also a problem exposed by the current medical 
furlough. The EITC and Child Tax Credit were enacted on a bipartisan 
basis, with Republicans in the lead. Sadly, benefits are inadequate and 
non-refundable. This could and should be fixed. Permanent tax reform 
with a Subtraction Value Added Tax levied on employers with a credit 
for a median income for each child of $1,000 a month, with pay and with 
no income cap will solve this problem permanently and needs no pay-for 
to offset it.

Attachment--Why Federal Investments Matter: Human Services, January 
2020

Our main tool in providing for human services is an employer-paid 
subtraction value-added tax. This levy would be used more to channel 
tax expenditures to employees rather than through categorical or block 
grants. The most important feature is an expanded refundable child tax 
credit, which would be distributed with pay and set to provide income 
at middle-class levels.

The S-VAT could be levied at both the state and federal levels with a 
common base and tax benefits differing between the states based on 
their cost of living (which would be paid with the state levy). The 
federal tax would be the floor of support so that no state could keep 
any part of its population poor, including migrants. It is time to end 
the race to the bottom and its associated war on the poor.

The S-VAT will also facilitate human capital expenditures, with credits 
to support tuition, wages and benefits for low-skill workers from ESL 
and remedial education to apprenticeship. These benefits can be used in 
cooperation with existing workforce investment boards, community 
colleges and economic development agencies.

Private education providers should also be included in the mix, 
including and especially the Catholic education system. Blaine 
Amendments need repeal, opposition to unions ended and a focus on non-
college bound students encouraged.

Medicaid for senior citizens and the disabled is a huge contingent 
liability for some states. In his New Federalism proposals, President 
Reagan offered to assume these costs in exchange for state funding of 
all other federal support. The first half of this proposal should be 
implemented in the form of a new Medicare Part E with no requirement 
for local funding.

The remainder of health costs would be paid through employer subsidies 
to low-wage trainees, as described above through an S-VAT, with state 
goods and services taxes (invoice VAT) covering cash, food and health 
benefits for unattached non-workers until they can be placed in the 
appropriate employment or disability program (including substance abuse 
intervention).

Increasing the general wage level, through higher minimum wages, will 
remove workers from poverty. The concept of being a member of the 
working poor should be banished from the national conversation with an 
eventual $20 minimum wage for both employment and training program 
participation, starting with $15 immediately. This wage level should 
adjust for inflation automatically. The best support for state budgets 
is to make sure that everyone is trained up to their potential.

                                 ______
                                 
                       Center for Public Justice

                             P.O. Box 48368

                       Washington, DC 20002-0368

                              202-695-2667

         https://www.cpjustice.org/public/page/content/homepage

June 9, 2020

The Honorable Charles Grassley
Chairman
U.S. Senate
Committee on Finance
135 Hart Senate Office Building
Washington, DC 20515

The Honorable Ron Wyden
Ranking Member
U.S. Senate
Committee on Finance
221 Dirksen Senate Office Building
Washington, DC 20515

RE: ``Unemployment Insurance During COVID-19: The CARES Act and the 
Role of Unemployment Insurance During the Pandemic,'' June 9, 2020

Dear Chairman Grassley, Ranking Member Wyden, and Members of the 
Committee:

The Center for Public Justice is an independent Christian policy 
research and civic education organization. We have been devoted to 
upholding family well-being since our founding over forty years ago. In 
the last three years, a prominent focus of our work has been 
researching the intersection of work and family life, and equipping 
faith-based employers on best practices for their organizational 
policies and practices accordingly. We are committed to promoting good 
work so that all families have the opportunity to flourish.

As COVID-19 forced quarantine measures earlier this year, the lives of 
American workers and families turned upside down. Across the nation, 
homes turned into schools, schools became food distribution sites, and 
work began to broadcast into living rooms via video calls. The already-
thinning boundaries between the domestic and the public sphere have 
been radically changed by the COVID-19 crisis. As the demands on family 
and work have fluctuated in response to community health and safety, 
access to unemployment insurance has been an important safety net for 
families.

Our Christian tradition sees both family and work as two God-given 
areas of blessing and responsibility. But, the current public health 
and economic crises are hurting both.

Motivated by our faith values, we believe that this Congress ought to 
promote unemployment insurance programs and pandemic recovery that 
honors both the dignity of work and the dignity of all workers. To that 
end:

      Supplemental assistance, such as Pandemic Unemployment 
Compensation, should be continued, in some form, to uphold workers, 
their families, and enable safe returns to work.

      Work share programs could be vital tools for maintaining 
employer-worker relationships, and should be promoted and streamlined 
for easy implementation across the country.

      Public dollars should continue to be invested in modernizing and 
strengthening the systems administering unemployment insurance, so that 
they are accessible for all workers.

      To support religious communities, unemployment systems should 
continue to include workers not traditionally included.

Continue Supplemental Assistance with State Unemployment Programs

The supplemental assistance provided to workers who experienced work 
loss due to the coronavirus pandemic via federal Pandemic Unemployment 
Compensation has been important in sustaining families. State 
unemployment programs are designed to replenish a portion of workers' 
pay before job loss. Rather than force families to rely on a sliver of 
their prior income, PUC helped qualifying workers make ends meet. For 
example, a husband in Michigan shared with the Center that the 
financial support helped his family pay their bills. In Maryland, a 
father of a single mother shared his relief: ``Praise God. She has a 
child. My daughter receiving UI took some of the financial pressure off 
my wife and I to support her through this time.'' Caroline in Iowa 
works in food service. Reflecting on her experience, she shared with 
the Center that the additional support through PUC was critical: ``It 
helped me support myself through a long, extended period of 
unemployment.'' She is excited to get back to work now, but is thankful 
that she ``didn't have to [do] a job during a time where I could've 
gotten sick through working.''

The supplemental assistance is scheduled to stop at the end of July. 
While some workplaces are beginning to reopen, Michael Strain, a 
resident scholar and the director of economic policy studies at the 
American Enterprise Institute warns that ``we're still going to be in a 
bad situation come August or September, even if we rapidly improve in 
June and July. . . . The economy six months from now is still going to 
be in very, very bad shape.''\1\ This acknowledgement is why Federal 
Reserve Chairman Jerome Powell recently advised Congress to extend the 
supplemental assistance ``in some form.''\2\
---------------------------------------------------------------------------
    \1\ James Pethokoukis and Michael R. Strain, ``Recovering from the 
COVID-19 Recession: My Long-Read Q&A with Michael Strain,'' AEIdeas 
(blog), American Enterprise Institute, June 10, 2020, https://
www.aei.org/economics/recovering-from-the-covid-19-recession-my-long-
read-qa-with-michael-strain/.
    \2\ Sylvan Lane, ``Power Urges Congress to Continue Boosted Jobless 
Benefits `In Some Form,' '' The Hill, June 17, 2020, https://
thehill.com/policy/finance/503232-powell-urges-congress-to-continue-
boosted-jobless-benefits-in-some-form.

There is some understandable frustration around this program: Some 
unemployed workers are receiving more in unemployment assistance than 
the compensation their colleagues are receiving while working.\3\ But, 
our current moment calls for strong supports for both those employed 
and un- or under-employed. As long as the uncertainty of the 
coronavirus is a threat to community welfare, state unemployment 
insurance will not be enough alone to help workers stay home when 
necessary, or keep them afloat when work fluctuates. Without adequate 
income to sustain families through these periods of uncertainty, 
workers may not put public health first. ``Those with direct COVID-19 
exposure through their households continue to work similar hours to 
others, and those with recent fever symptoms or elevated risk for COVID 
complications are not reducing their work hours or taking additional 
precautions,''\4\ finds Abigail Wozniak, a labor economist at the 
Federal Reserve Bank of Minneapolis.
---------------------------------------------------------------------------
    \3\ Peter Ganong, Pascal Noel, and Joseph Vavra, ``US Unemployment 
Insurance Replacement Rates During the Pandemic,'' Becker Friedman 
Institute Working Paper No. 2020-62, (May 2020), https://
bfi.uchicago.edu/wp-content/uploads/BFI_WP_202062-1.pdf.
    \4\ Abigail Wozniak, ``Disparities and Mitigation Behavior during 
COVID-19,'' Opportunity and Inclusive Growth Institution, Federal 
Reserve Bank of Minneapolis, Institute Working Paper 32, (May 2020), 
https://doi.org/10.21034/iwp.32.

Additionally, many of the nonprofit faith-based and religious employers 
the Center equips are experiencing a different timeline than the one 
assumed in the CARES Act. In the first several months of the pandemic, 
these employers were serving their communities' immediate needs: 
organizing food pantries, navigating aid systems, and connecting 
service recipients with resources and support. In April, when some 
employers were looking towards what they needed to stay afloat, our 
organizations were still addressing urgent community needs. Now that 
communities are adjusting to a new normal, many of the faith-based 
organizations in our network have expressed concern for the future: The 
Paycheck Protection Program provided critical short-term support for 
some institutions, but the trajectory of their work is now uncertain. 
Organizations are grappling with how revenue and programming may be 
impacted in the weeks and months to come. For example, charitable 
contributions are predicted to decline as much as $40 billion \5\ this 
year and next due to economic conditions. This uncertain future will 
likely result in work loss in the coming months. Without extending a 
version of PUC, these workers--who worked hard to serve their 
communities in the first months of the pandemic--will not have access 
to the relief that was available to their service recipients.
---------------------------------------------------------------------------
    \5\ Jeremy Beer, ``How Much Will Charitable Giving Decline? A New 
Survey Provides Us With a Starting Point,'' Philanthropy Daily, April 
13, 2020, https://www.philanthropydaily.com/how-much-will-charitable-
giving-decline/.

Over 150 economists recently signed on to a letter to Congress 
acknowledging that ``full economic recovery will remain dependent on 
the public health situation.''\6\ In light of this uncertain reality, 
as well as what is known about the choices workers will make to ensure 
food for their families, we cannot allow PUC to expire at the end of 
July without another form of supplement in place. Congress should 
continue a level of support that (1) state systems can quickly 
administer, and (2) will provide practical support to workers and their 
families who may experience work loss in coming months.
---------------------------------------------------------------------------
    \6\ Ben Bernanke, Heather Boushey, and Cecilia Rouse to Congress, 
June 16, 2020, https://docs.google.com/document/d/
1MuJDXICTKdvzKImGL4E6bKfMaNMnxMciBHYz3a5_XZg/
preview?pru=AAABcuHr26c*_33N3ASzrbnKgKN977ed6g.
---------------------------------------------------------------------------

Maintain Worker-Employer Relationships with Work Share

Work is inherently good and an important part of human flourishing; it 
provides opportunity for humans to cultivate talents, provide for 
family, and exercise responsibility. Work share programs (also known as 
short term compensation) \7\ could be a vital tool, especially in our 
current economy. As community economic and health conditions evolve, 
there will likely be slow restarts, and some stops and starts in the 
employment. Maintaining the worker-employer relationship within the 
changing environment is often in the best interest of both workers and 
employers. In areas that have experienced high, persistent rates of 
unemployment, staying connected to work can make a big difference to 
employers as well as workers and their family routines.
---------------------------------------------------------------------------
    \7\ U.S. Department of Labor, ``Short-Term Compensation,'' Office 
of Unemployment Insurance (fact sheet), n.d., https://oui.doleta.gov/
unemploy/docs/stc_fact_sheet.pdf.

Work share programs enable this mutually beneficial relationship. In 
the 26 states that have operational work share programs, employers have 
access to an alternative to laying off members of their trained 
workforce. Instead of layoffs, employers can temporarily reduce 
workers' hours. The employees impacted by reduced hours are allowed to 
collect part of their unemployment insurance (assuming they are 
eligible) to replace part of their lost wages. The program also 
requires employers to maintain worker health and retirement benefits as 
though worker hours were not reduced.\8\
---------------------------------------------------------------------------
    \8\ Jane Oates, ``Unemployment Insurance Program Letter No. 22-
12,'' Employment and Training Administration Advisory System, U.S. 
Department of Labor, June 18, 2012, https://wdr.doleta.gov/directives/
attach/UIPL/UIPL_22_12.pdf.

A faith-based employment placement program recently shared with the 
Center that many of the families they serve are eager to get back to 
work. Many of these families are grateful for the enhanced unemployment 
insurance to which they had access while they were laid off. As 
workplaces reopen, they are doing so slowly, with stops and starts. In 
some cases, workers are called back with fewer hours than desired. Work 
share, which the Department of Labor has clarified can be used to 
rehire previously laid off employees also,\9\ could benefit both 
employers and workers. Unfortunately, few workers or employers are 
familiar with work-sharing.
---------------------------------------------------------------------------
    \9\ John Pallasch, ``Unemployment Insurance Program Letter No. 21-
20,'' Employment and Training Administration Advisory System, U.S. 
Department of Labor, May 3, 2020, https://wdr.doleta.gov/directives/
attach/UIPL/UIPL_21-20.pdf.

In considering ways to facilitate safe returns to work, Congress should 
better promote work share programs to states and employers. As Congress 
discusses types of relief to include in the next relief bill, Congress 
should continue to incentivize states to set up work share programs as 
part of their unemployment insurance system. These incentives should 
continue to include funding and technical expertise in building and 
maintaining the program infrastructure. Finally, where possible, 
bureaucratic roadblocks should be minimized so that states can 
accelerate the implementation of these programs.

Invest in Making State Unemployment Insurance Systems Accessible

In the CARES Act, Congress committed to states funding to improve their 
unemployment insurance capacity. This was an important step in 
addressing the antiquated systems, but the work is not yet done. 
Unemployment insurance is an important safety net, with or without a 
pandemic impacting economic activity and human flourishing. Sadly, even 
as states have worked to increase their capacity to respond to this 
crisis, access to this important program remains challenging. One 
pastor shared with the Center that older workers in their congregation 
are struggling to navigate the state's unemployment insurance website. 
A faith-based nonprofit working with refugees and immigrants shared 
with the Center that workers still learning English are struggling to 
understand the application requirements.

Unemployment insurance is a system we have underinvested in and failed 
to maintain well, even in spite of the inevitability of occasional 
economic downturns. Congress should continue to enable states to 
strengthen their systems now, and think long-term about what it will 
take to upgrade and maintain them, so that unemployment insurance 
systems work well for all workers.

Support Religious Communities, Include Non-Traditional Workers

Many of those who lead and support religious communities do so in non-
traditional employment roles. Administrative assistants in church 
offices, child care workers at centers run in houses of worship, 
pastors, contractors sharing expertise are all common examples of those 
workers who are generally ineligible for assistance during seasons of 
hardship from work loss. Yet, they are among the many Americans whose 
work contributes to the vitality of our communities.

Religious organizations and congregations administer vital social 
services to their local community. They run food pantries, care for the 
elderly, and facilitate parenting classes. Religious organizations and 
congregations also contribute to the provision of counseling services, 
organizing neighborhood associations, and facilitating civic 
engagement. In addition to their important role in addressing community 
needs, Ram Cnaan, an international expert in the areas of faith-based 
social care and policy, has demonstrated that congregations also 
contribute to the local economy.\10\ Given this level of community 
impact, it is clear that the flourishing of nontraditional workers is 
wrapped up with the flourishing of all of our families and 
institutions. As Congress considers the future for unemployment 
insurance, our system should continue to include workers who are not 
traditionally included, but whose work is no less valuable.
---------------------------------------------------------------------------
    \10\ Ram A. Cnaan and Seongho An, ``Even Priceless Has to Have a 
Number: Congregational Halo Effect,'' Journal of Management, 
Spirituality and Religion 15, (November 2017): 64-81, https://doi.org/
10.1080/14766086.2017.1394214.

As Christians, our faith calls us to exercise our political authority. 
The purpose of government is to advance flourishing. Advancing 
flourishing in the midst of a pandemic may seem to be an impossible 
task, but federal and state governments are positioned to offer crucial 
support to employers, as well as to workers and their families. In 
order to eventually return to a vibrant, pluralist economy of 
workplaces, workers will need the flexibility and support to move in 
and out of the physical workplace while maintaining relationships with 
work when possible. Our desire to see our nation--and all families that 
make up our nation--flourish moves us to support these principled 
---------------------------------------------------------------------------
requests.

If you would like to discuss this further, please contact Rachel 
Anderson, Director of Families Valued--an initiative of the Center for 
Public Justice, at [email protected]. Thank you for your 
leadership and support for our nation's families and workplaces.

Sincerely,

Rachel Anderson
Director, Families Valued
Resident Fellow, Center for Public Justice

Stephanie Summers
CEO, Center for Public Justice

                                 ______
                                 
               Consortium for Citizens with Disabilities

                    820 First Street, NE, Suite 740

                          Washington, DC 20002

                            PH 202-567-3516

                            FAX 202-408-9520

                             [email protected]

                             www.c-c-d.org

Hon. Chuck Grassley                 Hon. Ron Wyden
Chairman                            Ranking Member
U.S. Senate                         U.S. Senate
Committee on Finance                Committee on Finance
219 Dirksen Senate Office Building   219 Dirksen Senate Office Building
Washington, DC 20510                Washington, DC 20510

Dear Chairman Grassley and Ranking Member Wyden:

The undersigned members of the Consortium for Citizens with 
Disabilities (CCD) write in response to your recent hearing, 
Unemployment Insurance During COVID-19: The CARES Act and the Role of 
Unemployment Insurance During the Pandemic, to raise issues of concern 
for people with disabilities related to Unemployment Insurance (UI). 
CCD is the largest coalition of national organizations working together 
to advocate for federal public policy that ensures the self-
determination, independence, empowerment, integration and inclusion of 
children and adults with disabilities in all aspects of society.

People with disabilities live in poverty at more than twice the rate of 
people without disabilities; while people with disabilities make up 
approximately 12 percent of the U.S. working-age population, they 
account for more than half of those living in long-term poverty. More 
than 65 percent of the 17.9 million working-age adults with 
disabilities participate in at least one safety net or income support 
program.\1\ People with disabilities also disproportionately hold low-
wage (in 2013, 61.2% of working-age adults with disabilities had 
incomes below 200% of the federal poverty line compared to 28.8% of 
working-age adults without disabilities) \2\ and part time jobs (32% of 
people with disabilities versus 17% for people without disabilities 
worked part time in 2019).\3\ Many people with disabilities have 
functional or service limitations that prevent substantial work and 
receive Social Security Disability Insurance (SSDI) or Supplemental 
Security Income (SSI). The SSDI and SSI programs include work 
incentives such as Ticket to Work; while some people are able to use 
these to transition to full-time employment, many others can only 
sustain more limited hours.
---------------------------------------------------------------------------
    \1\ National Council on Disability, 2017 Progress Report (2017), 
https://ncd.gov/sites/default/files/NCD_A%20Progress%20Report_508.pdf.
    \2\ Center for American Progress, A Fair Shot for Workers with 
Disabilities (2015), https://www.americanprogress.org/issues/poverty/
reports/2015/01/28/105520/a-fair-shot-for-workers-with-disabilities/.
    \3\ Department of Labor, Bureau of Labor Statistics, Persons with a 
Disability: Labor Force Characteristics Summary (2020), https://
www.bls.gov/news.release/disabl.nr0.htm.

Because so many workers with disabilities are part time workers, they 
often are not eligible for unemployment insurance. However, the newly 
passed Pandemic Unemployment Assistance (PUA) program and the increased 
benefits of Pandemic Unemployment Compensation (PUC) program extends 
unemployment insurance to more part time workers and thus will cover 
many more workers with disabilities. Given the increased costs due to 
the pandemic for people with disabilities who may have to self-isolate 
for longer due to pre-existing conditions to protect themselves, this 
improvement to the unemployment system is important and long needed. 
All people with disabilities, even those with substantial function or 
service limitations who rely on SSDI or SSI, should be able to claim 
---------------------------------------------------------------------------
the UI benefits that they earned.

In order to ensure that these UI programs work for all people with 
disabilities, we urge the Committee to include a disregard in future UI 
legislation to prevent unintended impacts on eligibility for other 
means-tested programs, including the Supplemental Nutrition Assistance 
Program (SNAP) and Supplemental Security Income (SSI). The UI 
provisions included in the CARES Act excluded the additional PUC 
funding from being considered for Medicaid eligibility, a crucial 
protection in this public health emergency, but did not protect 
families who rely on SNAP or SSI.

SNAP provides millions of people with disabilities and their families 
with crucial food assistance. Compared to people without disabilities, 
people with disabilities and their families are significantly more 
likely to experience hunger and food insecurity.\4\ With 95% of 
Americans under some form of a stay at home order and massive job 
loss,\5\ SNAP and other means tested benefits have become all the more 
crucial for people with disabilities and their families. In addition, 
children with disabilities receiving SSI may face a reduction in 
benefits due to their parents' claims of unemployment, due to deeming 
rules that do not count unemployment the same as wages. This unfairly 
punishes children with disabilities and their families for 
circumstances outside of their control. Unemployment benefits may also 
complicate Medicaid eligibility for workers with disabilities who are 
attempting to work via SSI's work incentive programs, despite Congress' 
decision to disregard PUC compensation for the purposes of Medicaid and 
CHIP.
---------------------------------------------------------------------------
    \4\ Carlson, Steven, Keith-Jennings, Brynne, and Chaudhry, Raheem 
(2017). SNAP Provides Needed Food Assistance to Millions of People with 
Disabilities. Washington, DC: Center on Budget and Policy Priorities, 
https://www.cbpp.org/research/food-assistance/snap-provides-needed-
food-assistance-to-millions-of-people-with.
    \5\ Mervosh, S., Lu, D., and Swales, V. (2020, March 24). See Which 
States and Cities Have Told Residents to Stay at Home. Retrieved from 
https://www.nytimes.com/interactive/2020/us/coronavirus-stay-at-home-
order.html.

As Congress has done before in emergencies and disasters, it makes 
sense to exempt this emergency unemployment from all means-tested 
programs. We urge you to do as the House did in their recently passed 
legislation, the HEROES Act (H.R. 6800) and include a disregard to 
ensure that low-income workers with disabilities and low-income 
families with children with disabilities, and others will not have to 
choose between their Medicaid, SSI, SNAP, and UI in this time of 
---------------------------------------------------------------------------
crisis.

We look forward to working with the Senate on this important issue. 
Please do not hesitate to contact Bethany Lilly ([email protected]) with 
any questions or to arrange a meeting.

Sincerely,

Association of People Supporting Employment First (APSE)
Autism Society of America
Autistic Self Advocacy Network
Center for Public Representation
Community Legal Services of Philadelphia
Council of State Administrators of Vocational Rehabilitation (CSAVR)
Easterseals
Epilepsy Foundation
The Jewish Federations of North America
Justice in Aging
National Alliance on Mental Illness
National Committee to Preserve Social Security and Medicare
National Disability Institute
National Disability Rights Network (NDRN)
National Down Syndrome Congress
National Organization of Social Security Claimants' Representatives 
(NOSSCR)
Paralyzed Veterans of America
RespectAbility
The Arc of the United States

                                 ______
                                 
                             Data Coalition

                      1003 K Street, NW, Suite 200

                          Washington, DC 20001

                             @DataCoalition

                         [email protected]

                     https://www.datacoalition.org/

June 24, 2020

U.S. Senate
Committee on Finance
Dirksen Senate Office Bldg.
Washington, DC 20510-6200

SUBJECT: Statement for the Record for ``Unemployment Insurance During 
COVID-19: The CARES Act and the Role of Unemployment Insurance During 
the Pandemic''--Expanding Access to Income and Earnings Data for 
Research Activities

Dear Chairman Grassley, Ranking Member Wyden, and Members of the 
Committee:

On behalf of the more than 50 members of the Data Coalition, I write to 
encourage you to expand access to income and earnings data for targeted 
research activities. With improved access to a single data source, 
researchers and policymakers will be better positioned to evaluate the 
impact of CARES Act spending on unemployment, the Paycheck Protection 
program, and other policy interventions designed to help workers and 
businesses during this pandemic. In the years to come, our country will 
need reliable evidence to understand these interventions and to hold 
the programs accountable for achieving the intended goals. We call on 
Congress to ensure the necessary data are available to support analysis 
for decision-makers and the American people on these critical policy 
choices.

In late-2017 a bipartisan commission created by Congress and the 
President offered 22 clear recommendations about how to improve the 
country's data infrastructure to support evidence-based policymaking. 
While the comprehensive strategy from the U.S. Commission on Evidence-
Based Policymaking was designed to work as an entire ecosystem, to 
date, Congress has only taken action on half of those recommendations. 
The coronavirus pandemic necessitates action on the remaining unanimous 
recommendations from the Evidence Commission to ensure elected leaders 
have critical information to understand not just the full impact of the 
virus long-term on our economy and population, but also to study and 
learn from the policies being implemented by the CARES Act to attempt 
to mitigate the pandemic's effects.

The Evidence Commission recognized a dear need for improved access to 
income and earnings data. This can immediately be accomplished. by the 
government by improving data quality for the. National Directory of New 
Hires and expanding access to include agencies using the strong privacy 
framework of the Confidential Information Protection and Statistical 
Efficiency Act of 2018 (CIPSEA). With minor adjustments to federal law, 
approved researchers could have vastly improved, yet still restricted 
and privacy-protected, access to existing data on wages and earnings. 
The Office of Child Support Enforcement at the Department of Health and 
Human Services operates the National Directory of New Hires, created in 
the 1996 welfare reforms. This system relies on state-provided data. 
Enhancements to data access for research purposes within the CIPSEA 
privacy-framework paired with improvements to data quality, including 
increasing the periodicity of reporting and doubling the duration of 
data retention will vastly improve existing research capabilities. 
Notably, proposals to expand access to this system have previously been 
offered by the Barack Obama and Donald Trump administrations in annual 
budget proposals to Congress.

By making these improvements, researchers can help evaluate data and 
build evidence in order to inform good policy decisions. We strongly 
encourage Congress to consider and advance improvements to this 
infrastructure. Thank you for your consideration. I would be pleased to 
discuss the request further with you or staff at any time.

Respectfully,

Nicholas R. Hart, Ph.D.
CEO, Data Coalition

                                 ______
                                 
                    Letter Submitted by Kelley Dukat
June 16, 2020

U.S. Senate
Committee on Finance
Dirksen Senate Office Bldg.
Washington, DC 20510-6200

RE: ``Unemployment Insurance During COVID-19: The CARES Act and the 
Role of Unemployment Insurance During the Pandemic,'' Tuesday, June 9, 
2020

Dear Honorable Members of the Senate Committee on Finance, I am writing 
you today on behalf of hybrid workers across California and the United 
States and in response to the hearings that I watched last week. While 
I understand the main issue at stake in the hearing last week was 
whether to continue the $600 per week until December or riot, I was 
completely disheartened to not hear one Senator mention the issue which 
has been plaguing me since my claim was filed.

Mixed-income (``hybrid'') workers across this country NEED your 
immediate help! Congress and the President passed the CARES Act and 
(though likely unintentionally) are causing hundreds of thousands (if 
not millions) of mixed-income American workers to not receive the full 
amount of financial assistance Congress intended for ALL Americans to 
receive at this difficult time during a pandemic and widespread 
unemployment.

I am truly a mixed income worker, who has both income from W-2 
employment (about 15 to 20% of my income) but who mostly identifies as 
a self-employed 1099 worker as an event planner and rideshare driver. I 
would definitely call myself a ``gig economy'' worker. I get to set my 
own schedule and accept work from multiple entities as I please.

My W-2 income in 2019 came from side jobs as vent staff at conventions, 
customer service temp jobs and working in guest services/customer 
service for the San Diego Padres--as a fun job. I also worked a 
seasonal job (and do work again--see later) for the Navy as a team 
member at the Naval Exchange Service Command.

As the situation was unfolding with the pandemic, I also received a job 
offer and had been fingerprinted to join the team for U.S. Census 
Bureau. I had completed my Orientation and Uniform fitting for the 
Padres and was excited to start my new role--we had training scheduled 
for the Guest Experience team as well. Lastly, I knew both of the event 
staff companies I worked for on the side as well (in the ``gig'' 
economy) would be full of work in the coming months given thatSan Diego 
is a huge convention city.

Then in mid-March, the world as I knew it, shut down. Our training for 
the Padres and the Census were shut down until further notice. All 
conventions were canceling. And with everyone sheltering in place at 
home and no convention or tourism there also weren't going to be Uber 
passengers, and it wouldn't be safe to drive anyway. This was 
unfortunate too as I had a new car to use--and need to pay for.

I had been on unemployment before after more than one layoff, so I knew 
and understood the process of filing the regular way. Congress was 
thankfully acting quickly on how to respond and I heard about the self-
employed workers being included for the first time. So I was excited 
and thankful to wait and see how that turned out. I waited to file 
until after the CARES Act passed, but we had no direction or guidance 
and attempts to reach EDD in California are completely useless and 
futile. Since I had federal income, the antiquated computer systems 
that EDD used would not allow for me to file online. I had to use a 
paper form, which meant I didn't do income by quarters, but just told. 
You list all of you ``employers.''

As I have never filed as a self-employed worker before and didn't fully 
understand the paper form or process, I put my clients or sources of 
1099 income as ``employers'' even though my employer is me. However, I 
wanted to get the application in because I needed the money and because 
I knew it would take 3 weeks for processing. We had no direction or 
guidance or info on when the system for PUA would be added on, I faxed 
the form on April 1, 2020.

For weeks, I heard nothing. When you can't file online, you don't get 
the ``confirmation'' number that you get when you do file online. You 
have no idea where it's sitting. I knew that likely most of the EDD 
reps weren't in a group office so I had no idea if anyone had even seen 
this. You can't contact EDD, I would call several hundred times per day 
to no avail. It's one of the most inept operations I have ever had the 
displeasure to work with.

Finally I was given an email address for EDD, and I sent an inquiry to 
it and I eventually received an email back where the rep apologized for 
not hearing back and since he was working from home, he couldn't say 
whether or not they received the fax, but he said he would forward the 
claim form via PDF which I sent to him to make sure it got filed 
properly.

I don't recall exactly when I heard or learned about the hybrid issue; 
I believe it came through social media before I received my small award 
level, but I feared what was coming. I wanted fore-apply for PUA on 
April 28th, but California and the department said that would not be 
allowed or futile because I had W-2 income or ``wages'' in the system.

PUA in California started at $167 per week, but now has increased up to 
$450/week for those who earned $18K+ in 1099 income, which includes me. 
If the EDD could consider my 2019 1099 income, I would receive close to 
the maximum of $450 per week just from my 1099 earnings; with both 1099 
and W-2 earnings combined I would receive the CA UI maximum of $450/
week.

Honorable Members of this Committee, this is NOT what Congress 
intended. In fact, Congressman Adam Schiff said so himself in a Town 
Hall with the SAG Aftra Union in May. I present the following YouTube 
video featuring a Town Hall with Congressman Adam Schiff where he 
states the following ``it was our intention they would have the full 
benefits of their full income.'' This is stated about the 10 minute 
mark here: https://youtu.be/_G1T76iYNC8.

In fact, Congresspeople Adam Schiff and Judy Chu (and signed by an 
additional 20 Congresspeople) sent a letter on May 8th to Speaker 
Pelosi and Leader McCarthy highlighting this very issue and urging her 
to include provisions ``to consider language to ensure that independent 
workers with mixed sources of income are able to access the same relief 
to make up for lost work that the CARES Act provides to those with more 
traditional employment arrangements.'' Sadly, these provisions were NOT 
included in Speaker Pelosi's HEROES Act a few days later. The full 
letter is attached below.

How did this problem even happen?

Because whoever drafted the PUA did so using the text and framework 
provided for by the Disaster Unemployment Assistance (DUA) from the 
1970s as you can see from this portion of the CARES Act:

(h) RELATIONSHIP BETWEEN PANDEMIC UNEMPLOYMENT ASSISTANCE AND DISASTER 
UNEMPLOYMENT ASSISTANCE.--Except as otherwise provided in this section 
or to the extent there is a conflict between this section and section 
625 of title 20, Code of Federal Regulations, such section 625 shall 
apply to this section as if:

(1) The term ``COVID-19 public health emergency'' were substituted for 
the term ``major disaster'' each place it appears in such section 625; 
and

(2) The term ``pandemic'' were substituted for the term ``disaster'' 
each place it appears in such section 625.

The problem is that when the DUA as created in the 1970s, there were no 
(or an insignificant number of) mixed-income workers . . . everyone was 
either 100% W-2 or 100% 1099/self-employed. That isn't the case in 
2020, and Congress did a huge disservice to American mixed-income 
workers by simply doing a ``Copy-Paste'' approach to drafting the 
language of the PUA. The fact that there was no oversight, no public 
comment period, no Congressperson (or staff member) that realized this 
problem before the CARES Act was signed into law is unfortunately a 
whole different story. Sadly, what's done is done.

But now, Members of this Committee, it's time to correct this error. 
And, as I mentioned before, the hundreds of thousands (if not millions) 
of mixed-income American workers NEED your help to fix this problem 
FAST. Because of this error, we are individually losing out on 
THOUSANDS OF DOLLARS Congress intended us to receive--money many of us 
NEED to survive to pay for life's bare essentials.

In addition, I urge this Committee to consider including a provision--
if only temporarily for 12-24 months that would waive excessive 
earnings so as not to penalize the American worker who might receive a 
small amount of income one week which could eliminate that worker's 
weekly UI/PUA benefit PLUS the additional $600 FPUC for that week. I 
understand these hearings last week focused mostly on this additional 
$600 per week, and I understand both sides of the concerns here--hard 
to get people back to work when they make more on unemployment and 
those who really need that lifeline. Right now I consider myself to 
need that lifeline since my work involves crowds and group events--
something which may not come back for 6 months to a year or more, 
however, I would be happy with.

In other words (and in my specific case), I took a new job with a 
previous W-2 employer and now because of that week, I need to claim/
certify it with the CA EDD and I not only lose the $93 in UI this week, 
but also the additional $600 FPUC. I don't know how, in any world, one 
can deem that scenario as fair, since I can fully prove income I had 
been earning.

Since I was offered and took a job at a different Navy Exchange store, 
I had no idea that I would be ``punished'' in this manner when I did. I 
have been forced to receive 0 because only a small portion of my income 
is being counted and therefore, I would still receive the $600 benefits 
you intended if my entire income or at least the majority of my income 
is being counted.

At the end of the day, I want to get back to work, whether as an event 
planner, a guest services representative or any other of the wonderful 
gigs I call for work. I don't want to stay unemployed, but while I am 
forced to because of the pandemic, I expect to receive the amount of 
financial help Congress intended me to receive. And this should be made 
RETROACTIVE to the date of my claim, which was also done erroneously by 
EDD. You can fix this with additional guidance/legislation.

So how to fix this problem?

Whether you a mend the CARES Act (such as what you did with the PPP) or 
include new language, provisions and guidelines in the HEROES Act, the 
two options that come to mind are:

    (1)  Allow States to let the applicant choose if they want their W-
2 income to be used for UI or their 1099 income. In my case, I would be 
given a choice to either receive $93/week from UI or the $399 to $450/
week from PUA.

    (2)  However, Option 1 above doesn't take into account the full 
income of the individual either. They still could lose out considerably 
if their income is evenly split between W-2 and 1099. Perhaps an 
individual's 1099 income can be funded by the PUA while the States can 
also provide funding for the W-2 portion of their income . . . 
obviously, only ONE $600 FPUC would be included, but at least the money 
the Federal Government earmarked for 1099 workers (PUA) would then 
still get to the 1099 worker. a. Example: Let's say my 2019 total 
income is $45,000, with $40,000 in 1099 and $5,000 in W-2. The State 
pays the normal UI for W-2 income at $100/week and then the federal 
government via PUA would pay, for example, $300/week additional for a 
total of $400/week UI (plus the weekly $600 FPUC) based on $45,000 in 
total earnings.

    (3)  Mandate that the states use their own leeway/flexibility as 
written into the law to alter or adjust their state UI code to include 
someone's full income and have the federal government then fund the 
difference. I don't have a preference as to which program my claim is 
under (UI or PUA) but I do want my entire income included in my 
benefits amount. This could be done through guidance issued to the 
states through the Department of Labor or through separate legislation 
such as was enacted to adjust the rules and provisions for the PPP 
program.

    This is your opportunity to truly help so many people in dire need,

I urge you to enact the best and most expedient course of action in 
these matters to help all of the American mixed income workers who, TO 
THIS DAY, have received little to no financial assistance since the 
pandemic hit and states went into lockdown. The amount I no longer 
receive (due to excessive earnings) was not adequate to even purchase 
groceries in the state I live in. and while the $600 per week is 
helpful, for someone like me, I now get nothing.

As far as the $600 per week in FPUC, I heard both sides of the debate 
and I understand both sides. For me, without the hybrid worker 
situation being resolved, I don't receive the $600 per week to make up 
for lost work anyway. In some ways I don't feel I have an opinion in 
the fight as I miss out either way. However, I have already lost out on 
thousands of dollars I need to survive because of the hybrid situation, 
and once you resolve that, that $600 per week will likely be a lifeline 
for me. Since I have already returned partially to some work, the $450 
return to work bonus will likely be useful to me as well--if you were 
to go along that route. I understand that it has been and will be 
difficult for employers to get someone to go back to work if they make 
more on unemployment, I also think it's a lifeline for many who are 
behind on payments and could allow them to get back on their feet and 
help the economy. So I believe that I do lean toward the argument that 
you should extend the payments, however, you could make a provision 
based on income levels and/or whether someone has returned to work.

Please solve the hybrid issue most urgently and paramountly before 
thousands of us become homeless and please don't allow those of us who 
have returned to work to be punished for this work.

Sincerely,

Kelly Dukat

CC: Office of Kamala Harris, and Office of Dianne Feinstein

Supporting Documents/Resources:

California Hybrid Income Taskforce Facebook page: https://
www.facebook.com/groups/hybridincometaskforce.

Petition on Hybrid Issue: https://www.change.org/p/unemployment-relief-
for-independent-workers-with-mixed-income-types.

Letter from Schiff, Chu: (attached).

My Interview with NBC San Diego in regard to this issue: https://www.
nbcsandiego.com/news/local/hybrid-workers-struggle-with-financial-
assistance/2316394/.

Rolling Stone Interview: https://www.rollingstone.com/music/music-
features/musicians-struggle-to-get-pandemic-assistance-993437/.

Variety Magazine: https://variety.com/2020/film/news/entertainment-
industry-groups-reform-pandemic-unemployment-assistance-program-
1234602395/

         Schiff, Chu Seek Unemployment Relief For Independent 
                    Workers With Mixed Income Types

  Workers With Both Independent and Traditional Employment Currently 
        Ineligible for Federal Pandemic Unemployment Assistance

Washington, DC--Rep. Adam Schiff (D-Burbank) and Rep. Judy Chu (D-
Pasadena) sent a letter to House Speaker Nancy Pelosi and Minority 
Leader Kevin McCarthy last week urging that future coronavirus response 
legislation ensure that independent workers with multiple types of 
income are able to access the same unemployment assistance that the 
CARES Act provides to those with more traditional employment 
arrangements.

``Due to the sporadic and unpredictable nature of work in film, 
television, theater, and music, many professionals in the entertainment 
industries earn a living through a combination of traditional (W-2) and 
independent (e.g., 1099) employment,'' the Members wrote in their 
letter. ``As a result, even if they have lost a substantial source of 
income due to coronavirus-related disruption of their independent work, 
these workers are ineligible for Pandemic Unemployment Assistance.''

While some workers may qualify for regular unemployment compensation if 
they have also lost their W-2 work, this can significantly under-
measure their true earnings. And those whose W-2 income has continued 
but only represents a small portion of their earnings-for example, a 
worker who receives residual income from a previous project-are left 
with greatly reduced income yet are ineligible for any unemployment 
assistance.

The full list of signers includes: Adam B. Schiff (D-CA), Judy Chu (D-
CA), Earl Blumenauer (D-OR), Brendan F. Boyle (D-PA), Julia Brownley 
(D-CA), Tony Cardenas (D-CA), David N. Cicilline (D-RI), Yvette D. 
Clarke (D-NY), Jim Cooper (D-TN), J. Luis Correa (D-CA), Theodore E. 
Deutch (D-FL), John Garamendi (D-CA), Jimmy Gomez (D-CA), Alan S. 
Lowenthal (D-CA), Stephen F. Lynch (D-MA). Carolyn B. Maloney (D-NY). 
Jerrold Nadler (D-NY). Grace F. Napolitano (D-CA). Chellie Pingree (D-
ME). Janice D. Schakowsky (D-IL). Brad Sherman (D-CA), and Debbie 
Wasserman Schultz (D-FL).

In March. Rep. Schiff and Members of Congress from Los Angeles and 
other entertainment hot-zones around the country sent a letter to the 
Speaker and Minority Leader requesting that emergency unemployment 
benefits be made available to freelancers, contractors, and other 
independent workers who have lost income as a result of the pandemic. 
The CARES Act included the new Pandemic Unemployment Assistance (PUA) 
program, extending benefits to independent workers who do not fully 
qualify for regular unemployment.

Read the full letter below:

May 8. 2020

The Honorable Nancy Pelosi
Speaker
U.S. House of Representatives
Washington, DC 20515

The Honorable Kevin McCarthy
Minority Leader
U.S. House of Representatives
Washington, DC 20515

Dear Speaker Pelosi and Leader McCarthy:

Thank you for your efforts to pass the CARES Act in March, legislation 
that provides a crucial foundation for our response to the coronavirus 
crisis and that is providing desperately needed relief to millions of 
Americans and small businesses.

During consideration of the CARES Act, we wrote to you to request that 
emergency unemployment benefits be made available to freelancers, 
Contractors, and other independent workers who have lost in-come as a 
result of the pandemic. We are very appreciative that the CARES Act 
included the new Pandemic Unemployment Assistance (PUA) program, 
extending benefits to independent workers who lack the resources of a 
large employer but do not fully qualify for regular unemployment.

However, while PUA has begun providing support to many previously 
ineligible workers, as currently constructed many independent workers 
with multiple sources of income are excluded from fully qualifying for 
its expanded benefits. This includes workers with mixed employment 
types and multiple sources of income who have lost income but are not 
fully covered by either regular unemployment or PUA.

In particular, due to the sporadic and unpredictable nature of work in 
film, television, theater, and music, many professionals in the 
entertainment industries earn a living through a combination of 
traditional (W-2) and independent (e.g., 1099) employment. As a result, 
even if they have lost a substantial source of income due to 
coronavirus-related disruption of their independent work, these workers 
are ineligible for PUA. Some of these workers may qualify for regular 
unemployment compensation if they have also lost their W-2 work, but 
this can significantly under-measure their true earnings. And those 
whose W-2 income has continued but only represents a small portion of 
their earnings-for example, a worker who receives residual income from 
a previous project-are left with greatly reduced income yet are 
ineligible for any unemployment assistance.

As you consider additional legislation to respond to COVID-19, we urge 
you to consider language to ensure that independent workers with mixed 
sources of income are able to access the same relief to make up for 
lost work that the CARES Act provides to those with more traditional 
employment arrangements.Thank you for your consideration and your 
leadership through these difficult times.

Sincerely,

CC: The Honorable Richard Neal
    Chairman, Committee on Ways and Means
    The Honorable Kevin Brady
    Ranking Member, Committee on Ways and Means

                                 ______
                                 
                    Letter Submitted by Terry Dumas
                                                      June 18, 2020
U.S. Senate
Committee on Finance
Dirksen Senate Office Bldg.
Washington, DC 20510-6200

RE: Unemployment for gig workers and independent contractors--HYBRID 
WORKERS

Dear Committee Members, I am writing to bring your attention to a major 
problem with the CARES Act. I live in Massachusetts and I'm contacting 
you because I know that you are considering additional measures to help 
unemployed workers due to the COVID-19 crisis. I am an independent 
contractor and run a consulting business from my home. I haven't worked 
since March 10, 2020 due to COVID-19. Unfortunately for me, I am what's 
called a ``hybrid'' worker who received both a W-2 and 1099s from 
various clients in 2019. The W-2 work was for two quarters and was only 
one-third of my annual income. Due to this W-2, I am ineligible for 
Pandemic Unemployment Assistance (PUA), which means that my true 
earnings from 2019 are significantly under-measured since my 1099 
income cannot be considered in my unemployment claim. The bottom line 
is that workers with mixed employment types and multiple sources of 
income who have lost income are not fully covered by either regular 
unemployment or PUA.

As you consider additional legislation to respond to COVID-19, I urge 
you to consider language to ensure that independent workers with mixed 
sources of income are able to access the same relief to make up for 
lost work that the CARES Act provides to those with more traditional 
employment arrangements.

This is a national issue. I researched the ``hybrid'' worker 
unemployment problem on-line and found the attached chart prepared by a 
group in California:

                         The UI vs. PUA Problem
------------------------------------------------------------------------
Type of   Historical   Historical                              Benefit
 Worker   W-2 Income  1099 Income     Total     Eligibility     Amount
------------------------------------------------------------------------
W-2          $80,000            -      $80,000           UI          450
 Only
------------------------------------------------------------------------
1099               -      $80,000      $80,000          PUA          450
 Only
------------------------------------------------------------------------
W-2/          $5,000      $75,000      $80,000           UI           52
 1099
 Hybrid
------------------------------------------------------------------------


As you can see, ``hybrid'' workers are at a significant disadvantage 
compared to traditional workers. Please support modifications to the 
program to allow individuals to show their mixed sources of revenue 
(both W-2 and 1099) for a full and fair accounting of their annual 
income.

Many gig workers and independent contractors have received minimal help 
through the Cares Act. I urge you to work with your colleagues to get 
legislation in place to make the necessary changes.

Thank you for your consideration.

Sincerely,

Terry Dumas

                                 ______
                                 
                     Greater Boston Legal Services

                           197 Friend Street

                            Boston, MA 02114

                           Tel: 617-371-1234

                           Fax: 617-371-1222

U.S. Senate
Committee on Finance
Dirksen Senate Office Bldg.
Washington, DC 20510-6200

Re: ``Unemployment Insurance During COVID-19: The CARES Act and the 
Role of Unemployment Insurance During the Pandemic''

         Statement of Luz Arevalo, Brian Flynn, Monica Halas, 
                 Hannah Tanabe, and Elizabeth Whiteway

                          Employment Law Unit

Thank you for the opportunity to submit a written statement on behalf 
of Greater Boston Legal Services (GBLS) and the clients we serve. We 
are attorneys at GBLS, who have and continue to represent hundreds of 
clients on unemployment insurance (UI) issues.

We are writing today, on behalf of our unemployed individual clients 
and client 
community-based organizations, to urge this Committee not to allow the 
federal UI benefit provisions of the CARES Act to expire, and, in light 
of the uncertain health and economic conditions of the coming months, 
to tie their reauthorization and extension to economic triggers, not 
future dates certain.

GBLS is the largest provider of legal aid services in Massachusetts. We 
have assisted clients with unemployment insurance claims for decades. 
In the last few months, we have seen an unprecedented demand for 
assistance accessing the UI system, and have helped over fifteen 
hundred of Massachusetts' most vulnerable workers with their claims in 
that time. The availability of the CARES Act's federal UI benefits has 
been-and continues to be-a vital lifeline for our clients. Expanded UI 
benefits have allowed our clients to put food on the table, care for 
sick family members, and keep current on their rent. Allowing expanded 
benefits to expire prematurely would have disastrous consequences for 
the well-being of these workers, of their families, and of the public 
at large. Just a few examples of GBLS clients who have benefited from 
the, CARES Act's UI benefits include:

      Lilly, a survivor of domestic violence and single mother of two 
young children. Lilly is originally from Cambodia, and her primary 
language is Khmer. Most recently, she worked as a personal care 
attendant, but was laid off by the family that employed her on March 7, 
2020 due to COVID-19. Because of her limited English proficiency, Lilly 
experienced significant difficulty completing her UI application. She 
could not afford diapers and formula for her infant while waiting to be 
approved for UI benefits. Two months later, on May 7, Lilly was 
approved for PUA and PUC. She is concerned she will not be able to find 
childcare for her two young children during the pandemic, and does not 
know how she will continue to provide for them if PUC is allowed to 
expire at the end of July.

      Victoria, a single mother at high risk to contract COVID-19. PUC 
benefits have provided Victoria and her family stability during 
uncertain times, allowing them to keep up on rent, car payments, and 
utility bills without fear of running out of money for medicine and 
food during the pandemic.

      David, a 27 year-old restaurant worker who has been trying for 
years to rebuild his life after experiencing child abuse. After the 
restaurant he worked at closed due to the pandemic, PUC benefits 
allowed David to keep up on rent and make payments towards a used car 
so that he could make deliveries as an essential worker.

      Michelle, a 62 year-old, self-employed licensed hairdresser who 
could not work due to COVID-19. Before the PUC and PUA were 
implemented, she managed to pay her March rent and was left with 
nothing else. Federal UI benefits have allowed her to continue paying 
for rent and for food. Without these benefits, she would be homeless.

      Hilaria and Gerardo, both of whom lost their jobs. Gerardo, a 
stone-cutter, contracted COVID-19, remaining in the hospital for three 
weeks. While his job paid for four weeks of sick-time, it then ended 
all pay. Gerardo's intubation cost him a vocal cord and the ability to 
eat from the mouth, requiring occupational therapy. Hilaria's 
unemployment has allowed her to provide and care for Gerardo and their 
three children.

      Regina, who lost her job and would have been homeless without 
federal PUC benefits. She is uncertain when she will be able to secure 
work in the future, and she hopes and prays for an extension of PUC 
benefits. She does not know how long she will be able to survive 
without these extended benefits.

During these past months, more than 40 million workers have filed UI 
claims. Because COVID-19 has disproportionately affected low-wage, 
vulnerable workers, millions of these claimants likely face 
circumstances just like GBLS' clients, and are relying on expanded UI 
benefits for their survival. Due to this unprecedented demand and the 
technical difficulty of implementing these new programs, payment of 
benefits has been delayed for many workers.\1\ Thankfully, the 
situation has improved, and state agencies have been able to begin 
working through backlogs of claims and disbursing payment to a greater 
percentage of claimants.\2\ At a time when most American households 
cannot withstand a single missed paycheck,\3\ however, workers reliant 
on unemployment insurance because of COVID-19 need time to recover from 
these delayed payments. For instance, other pieces of emergency 
legislation, such as eviction and foreclosure moratoria, will expire 
just as the CARES Act's Pandemic Unemployment Compensation (``PUC'') 
provisions are set to expire at the end of July.\4\ Allowing expanded 
UI benefits to expire at this time will lead to devastating 
consequences for working families, as well as for the economy as a 
whole.
---------------------------------------------------------------------------
    \1\ Anya van Wagtendonk, ``Study: 71 Percent of Jobless Americans 
Did Not Receive Their March Unemployment Benefits.'' Vox (April 25, 
2020). https://www.vox.com/covid-19-coronavirus-economy-recession-
stock-market/2020/4/25/21236595/unemployment-benefits-71-percent-didnt-
recieve-coronavirus-layoffs.
    \2\ Andrew Stettner and Amanda Novello, ``Unemployment Payouts 
Accelerated During April and May--But Are Still Too Slow.'' The Century 
Foundation (June 2, 2020). https://tcf.org/content/commentary/
unemployment-payouts-accelerated-april-may-still-slow/.
    \3\ Annie Nova, ``A $1,000 Emergency Would Push Many Americans Into 
Debt.'' CNBC (January 23, 2019). https://www.cnbc.com/2019/01/23/most-
americans-dont-have-the-savings-to-cover-a-1000-emergency.html.
    \4\ Massachusetts Bill H. 4647, for example, which halted 
foreclosures and evictions in Massachusetts is set to expire on August 
18, 2020.

The Committee should also consider that the health and economic effects 
of COVID-19 have disproportionately harmed black workers and 
communities. A recent study found that as of April, less than half of 
the adult black population was employed, with more than one in six 
black workers losing their jobs between February and April.\5\ At the 
same time, black workers are more likely to be among the essential 
workers on the front-line of the pandemic, thus facing a greater risk 
of exposure and illness, and the need to remain quarantined.\6\ As a 
result, allowing expanded UI benefits to expire will exacerbate the 
existing income and wealth disparities between black and white 
households.\7\
---------------------------------------------------------------------------
    \5\ See Elise Gould and Valerie Wilson, ``Black Workers Face Two of 
the Most Lethal Preexisting Conditions for Coronavirus--Racism and 
Economic Inequality.'' Economic Policy Institute (June 1, 2020). 
https://www.epi.org/publication/black-workers-covid/.
    \6\ See Jeanna Smialek and Jim Tankersley, ``Black Workers, Already 
Lagging, Face Big Economic Risks.'' New York Times (June 1, 2020). 
https://www.nytimes.com/2020/06/01/business/economy/black-workers-
inequality-economic-risks.html.
    \7\ In 2017, for example, The Boston Globe reported on a study 
conducted by the Federal Reserve Bank of Boston, Duke University, and 
the New School which found that the median net worth of black 
households in the Greater Boston Region was just $8, compared to 
$247,500 for white households. See Akilah Johnson, ``That Was No Typo: 
The Median Net Worth of Black Bostonians Really is $8.'' The Boston 
Globe (December 11, 2017). https://www.bostonglobe.com/metro/2017/12/
11/that-was-typo-the-median-net-worth-black-bostonians-really/
ze5kxC1jJelx24
M3pugFFN/story.html.

Even as cities and state begin to reopen, millions of workers likely 
will not be able to find work quickly. As universities announce plans 
to conduct (at the least) their fall semesters ``remotely,'' thousands 
of low-wage custodial and dining workers in Boston and Cambridge alone 
are likely to be or remain furloughed or laid-off.\8\ The economic 
impact will ripple to nearby businesses which depend on student 
populations for demand. Many workers will inevitably contract COVID-19 
as it continues to spread through the remainder of this year and 
beyond, and will be unable to safely return to work while recovering. 
Parents facing canceled summer programs and the possibility of limited 
in-person schooling in the fall will have to prioritize childcare over 
returning to work.
---------------------------------------------------------------------------
    \8\ Deirdre Fernandes, ``Six Harvard Graduate Schools Will Hold 
Only Online Classes This Fall.'' The Boston Globe (June 3, 2020). 
https://www.bostonglobe.com/2020/06/03/metro/harvards-education-school-
will-go-fully-online/. As of this writing Harvard College and other 
universities are yet to announce their plans for the fall semester.

The Committee will likely hear arguments that the CARES Act's UI 
provisions disincentivize workers from returning to work.\9\ These 
concerns are baseless. State unemployment insurance laws and the CARES 
Act provisions require workers to remain ``able and available'' to 
return to suitable work, including if they are recalled to jobs to 
which it is safe to return. The Pandemic Unemployment Assistance 
(``PUA'') provisions of the CARES Act make exceptions to this able and 
available requirement where workers experience symptoms of or are 
diagnosed with COVID-19, must self-quarantine based on medical advice, 
must care for family or household members diagnosed with COVID-19, or 
must provide childcare due to COVID-19-related closures, all situations 
where it would be unsafe or untenable to return to work through no 
fault of the worker.\10\ Eliminating or reducing expanded benefits, 
including PUC payments, would force workers who are already sick or at 
heightened risk of becoming sick back to work against medical advice 
and before it is safe to do so-for themselves, their coworkers, and the 
public at large- because they cannot make ends meet otherwise. We urge 
this Committee to deliberate based on reality, rather than hollow 
stereotypes.
---------------------------------------------------------------------------
    \9\ See Jeff Stein, Heather Long, and Josh Dawsey, ``Labor 
Secretary Eugene Scalia Faces Blowback as He Curtails Scope of Worker 
Relief in Unemployment Crisis.'' The Washington Post (Apr. 10, 2020). 
https://www.washingtonpost.com/business/2020/04/10/labor-secretary-
eugene-scalia-faces-blowback-he-curtails-scope-worker-relief-
unemployment-crisis/ (noting that Secretary Scalia ``expressed concerns 
about unemployment insurance being too generous''); see also, Carl 
Hulse, ``Jobless Aid Fuels Partisan Divide Over Next Pandemic Rescue 
Package.'' The New York Times (May 28, 2020) (quoting Senator Lindsey 
Graham as promising that expanded unemployment insurance would be 
``extended over our dead bodies'').
    \10\ See H.R. 748 Sec. 2102(a)(3)(A).

For all these reasons, and on behalf of unemployed workers, we 
respectfully request that this Committee extend the CARES Act's UI 
provisions, which are vital to the well-being of workers, their 
---------------------------------------------------------------------------
families, and the public. Thank you.

Respectfully submitted,

Luz Arevalo
Brian Flynn
Monica Halas
Hannah Tanabe
Elizabeth Whiteway
Employment Law Unit

On the testimony: Jason Salgado HLS'21

                                 ______
                                 
                     Letter Submitted by Ben Hermes
                                                      June 14, 2020

U.S. Senate
Committee on Finance
Dirksen Senate Office Bldg.
Washington, DC 20510-6200

RE: ``Unemployment Insurance During COVID-19: The CARES Act and the 
Role of Unemployment Insurance During the Pandemic''
Date: Tuesday, June 9, 2020

Dear Honorable Members of the Senate Committee on Finance, mixed-income 
(``hybrid'') workers across this country NEED your immediate help! 
Congress and the President passed the CARES Act and (though likely 
unintentionally) are causing hundreds of thousands (if not millions) of 
mixed-income American workers to not receive the full amount of 
financial assistance Congress intended for ALL Americans to receive at 
this difficult time during a pandemic and widespread unemployment.

I am a 1099 independent contractor that works for a digital marketing 
company in Los Angeles, but I am also a very part time actor.

I haven't worked a single hour of W-2 employment in almost THREE YEARS 
(my last W-2 day of work was on July 11, 2017 as an actor on ``The 
Young and The Restless'' soap opera).

After spending weeks learning about the CARES Act and PUA, trying to 
reach the CA EDD unsuccessfully after close to 3,000 attempts, and 
attending SAG-AFTRA webinars about UI and the CARES Act, when PUA 
finally became available here in CA on April 28th, I applied.

However, the CA EDD sent a normal UI acceptance letter on Monday, May 
4th indicating that my very low W-2 acting residual earnings from 2019 
(residual earnings for days I physically worked 3-15 years ago) were 
solely going to be used to calculate my UI weekly benefit instead of 
qualifying me for PUA--the program for which I waited and applied--and 
that I would be receiving $112/week (as opposed to the initial $167/
week all PUA applicants receive . . . although PUA in CA has now 
increased up to $450/week for those who earned $18K+ in 1099 income.) 
If the EDD could consider my 2019 1099 income, I would receive $385/
week just from my 1099 earnings; with both 1099 and W-2 earnings 
combined I would receive the CA UI maximum of $450/week. Important to 
note: I have zero control over the amounts of these random acting 
residuals and when these residuals arrive.

After 3,000 attempts, I finally spoke to a CA EDD representative on May 
7th, and when I told her that I believed I should be PUA, she told me I 
couldn't qualify for PUA because of my W-2 earnings. I explained that 
those ``earnings'' were from physical work performed 3-15 years ago, 
but she said her hands were tied, the CA EDD was just following the 
guidelines given to the states by the Department of Labor based on the 
language in the CARES Act, and that, as it's written, I don't qualify 
for PUA.

Honorable Members of this Committee, this is NOT what Congress 
intended.

In fact, Congresspeople Adam Schiff and Judy Chu (and signed by an 
additional 20 Congresspeople) sent a letter on May 8th to Speaker 
Pelosi and Leader McCarthy highlighting this very issue and urging her 
to include provisions ``to consider language to ensure that independent 
workers with mixed sources of income are able to access the same relief 
to make up for lost work that the CARES Act provides to those with more 
traditional employment arrangements.'' Sadly, these provisions were NOT 
included in Speaker Pelosi's HEROES Act a few days later.

The full letter is attached below. How did this problem even happen?

Because whoever drafted the PUA did so using the text and framework 
provided for by the Disaster Unemployment Assistance (DUA) from the 
1970s as you can see from this portion of the CARES Act:

              (h) Relationship Between Pandemic Unemployment Assistance 
        and Disaster Unemployment Assistance.--Except as other-wise 
        provided in this section or to the extent there is a conflict 
        between this section and section 625 of title 20, Code of 
        Federal Regulations, such section 625 shall apply to this 
        section as if--

                        (1) the term ``COVID-19 public health 
                emergency'' were substituted for the term ``major 
                disaster'' each place it appears in such section 625; 
                and

                        (2) the term ``pandemic'' were substituted for 
                the term ``disaster'' each place it appears in such 
                section 625.

The problem is that when the DUA was created in the 1970s, there were 
no (or an insignificant number of) mixed-income workers . . . everyone 
was either 100% W-2 or 100% 1099/self-employed That isn't the case in 
2020, and Congress did a huge disservice to American mixed-income 
workers by simply doing a ``Copy-Paste'' approach to drafting the 
language of the PUA. The fact that there was no oversight, no public 
comment period, no Congressperson (or staff member) that realized this 
problem before the CARES Act was signed into law is unfortunately a 
whole different story. Sadly, what's done is done.

But now, Members of this Committee, it's time to correct this error. 
And, as I mentioned before, the hundreds of thousands (if not millions) 
of mixed-income American workers NEED your help to fix this problem 
FAST. Because of this error, we are individually losing out on 
THOUSANDS OF DOLLARS Congress intended us to receive--money many of us 
NEED to survive to pay for life's bare essentials.

In addition, I urge this Committee to consider including a provision--
if only temporarily for 12-24 months--that would waive excessive 
earnings so as not to penalize the American worker who might receive a 
small amount of income one week which could eliminate that worker's 
weekly UI/PUA benefit PLUS the additional $600 FPUC for that week. In 
other words (and in my specific case), if I currently receive a random 
acting residual of $150 this week, I need to claim/certify it with the 
CA EDD and I not only lose the $112 in UI this week, but also the 
additional $600 FPUC. I don't know how, in any world, one can deem that 
scenario as fair, especially when I have no control over the amount of 
the residual or when it arrives.

At the end of the day, I want to get back to work, whether as an actor 
or as a digital marketing executive. I don't want to stay unemployed, 
but while I am forced to because of the pandemic, I expect to receive 
the amount of financial help Congress intended me to receive.

So how to fix this problem?

Whether you amend the CARES Act or include new language, provisions and 
guidelines in the HEROES Act, the two options that come to mind are:

    (1)  Allow States to let the applicant choose if they want their W-
2 income to be used for UI or their 1099 income. In my case, I would be 
given a choice to either receive $112/week from UI or $385/week from 
PUA.
    (2)  However, Option 1 above doesn't take into account the full 
income of the individual either. They still could lose out considerably 
if their income is evenly split between W-2 and 1099. Perhaps an 
individual's 1099 income can be funded by the PUA while the States can 
also provide funding for the W-2 portion of their income . . . 
obviously, only ONE $600 FPUC would be included, but at least the money 
the federal government earmarked for 1099 workers (PUA) would then 
still get to the 1099 worker.
          a.  Example: Let's say my 2019 total income is $45,000, with 
$40,000 in 1099 and $5,000 in W-2. The State pays the normal UI for W-2 
income at $100/week and then the federal government via PUA would pay, 
for example, $300/week additional for a total of $400/week UI (plus the 
weekly $600 FPUC) based on $45,000 in total earnings.

This is your opportunity to truly help so many people in dire need.

I urge you to enact the best and most expedient course of action in 
these matters to help all of the American mixed-income workers who, TO 
THIS DAY, have received little to no financial assistance since the 
pandemic hit and states went into lockdown.

Kind regards,

Ben Hermes

cc: Senator Diane Feinstein
cc: Senator Kamala Harris

                                 ______
                                 

                     Congress of the United States

                          Washington, DC 20515

                              May 8, 2020

The Honorable Nancy Pelosi          The Honorable Kevin McCarthy
Speaker                             Minority Leader
U.S. House of Representatives       U.S. House of Representatives
Washington, DC 20515                Washington, DC 20515

Dear Speaker Pelosi and Leader McCarthy:

Thank you for your efforts to pass the CARES Act in March, legislation 
that provides a crucial foundation for our response to the coronavirus 
crisis and that is providing desperately needed relief to millions of 
Americans and small businesses.

During consideration of the CARES Act, we wrote to you to request that 
emergency unemployment benefits be made available to freelancers, 
contractors, and other independent workers who have lost income as a 
result of the pandemic. We are very appreciative that the CARES Act 
included the new Pandemic Unemployment Assistance (PUA) program, 
extending benefits to independent workers who lack the resources of a 
large employer but do not fully qualify for regular unemployment.

However, while PUA has begun providing support too many previously 
ineligible workers, as currently constructed many independent workers 
with multiple sources of income are excluded from fully qualifying for 
its expanded benefits. This includes workers with mixed employment 
types and multiple sources of income who have lost income but are not 
fully covered by either regular unemployment or PUA.

In particular, due to the sporadic and unpredictable nature of work in 
film, television, theater, and music, many professionals in the 
entertainment industries earn a living through a combination of 
traditional (W-2) and independent (e.g., 1099) employment. As a result, 
even if they have lost a substantial source of income due to 
coronavirus-related disruption of their independent work, these workers 
are ineligible for PUA. Some of these workers may qualify for regular 
unemployment compensation if they have also lost their W-2 work, but 
this can significantly under-measure their true earnings. And those 
whose W-2 income has continued but only represents a small portion of 
their earnings--for example, a worker who receives residual income from 
a previous project--are left with greatly reduced income yet are 
ineligible for any unemployment assistance.

As you consider additional legislation to respond to COVID-19, we urge 
you to consider language to ensure that independent workers with mixed 
sources of income are able to access the same relief to make up for 
lost work that the CARES Act provides to those with more traditional 
employment arrangements.

Thank you for your consideration and your leadership through these 
difficult times.

            Sincerely,

Adam B. Schiff                      Judy Chu
Member of Congress                  Member of Congress

Earl Blumenauer                     Jimmy Gomez
Member of Congress                  Member of Congress

Brendan F. Boyle                    Alan S. Lowenthal
Member of Congress                  Member of Congress

Julia Brownley                      Stephen F. Lynch
Member of Congress                  Member of Congress
Tony Cardenas                       Carolyn B. Maloney
Member of Congress                  Member of Congress

David N. Cicilline                  Jerrold Nadler
Member of Congress                  Member of Congress

Yvette D. Clarke                    Grace F. Napolitano
Member of Congress                  Member of Congress

Jim Cooper                          Chellie Pingree
Member of Congress                  Member of Congress

J. Luis Correa                      Janice D. Schakowsky
Member of Congress                  Member of Congress

Theodore E. Deutch                  Brad Sherman
Member of Congress                  Member of Congress

John Garamendi                      Debbie Wasserman Schultz
Member of Congress                  Member of Congress

CC: The Honorable Richard Neal
    Chairman, Committee on Ways and Means

    The Honorable Kevin Brady
    Ranking Member, Committee on Ways and Means

                                 ______
                                 
                 Iowa Coalition Against Sexual Assault

                          3030 Merle Hay Road

                          Des Moines, IA 50310

                              515-244-7424

                       https://www.iowacasa.org/

                                                     March 11, 2020

Hon. Charles E. Grassley
Chairman
U.S. Senate
Committee on Finance
219 Dirksen Senate Office Building
Washington, DC 20510

Senator Joni Ernst
730 Hart Senate Office Building
Washington, DC 20510

Dear Senators Grassley and Ernst, The Iowa Coalition Against Sexual 
Assault (``IowaCASA'') is a statewide nonprofit organization with more 
than 35 years of experience advocating on behalf of victim service 
programs and survivors of sexual harassment, abuse, and assault. As you 
know, we are hoping to get work on the Violence Against Women Act 
wrapped up soon. In addition to the provisions we've already discussed 
with your staffs, we wanted to voice our strong support for the 
unemployment insurance language in section 703 of H.R. 1585, the 
Violence Against Women Reauthorization Act of 2019. We sincerely thank 
you for your efforts on this critical issue and we encourage the Senate 
to include these provisions in its version of this legislation.

We believe this provision, which allows access to unemployment 
insurance, contributes to the economic stability of survivors of sexual 
violence and domestic abuse who face the greatest jeopardy. Victims of 
sexual violence and domestic abuse often face risk of losing their jobs 
for a myriad of reasons. Victims of stalking are regularly dismissed 
from their jobs. We hear stories from survivors of violence who lose 
their jobs for taking time off to recover emotionally and physically 
from the trauma they've endured. We think that it's crucially important 
that, in the rare instances where survivors need to leave their jobs 
because of sexual and/or domestic violence, they have access to 
unemployment insurance. This allows them to maintain their economic 
stability while in a critical transition period. Without necessary 
access to unemployment insurance, survivors could be forced to stay in 
a dangerous situation longer than they wish to, and longer than is safe 
for themselves and their family members.

Enacting this provision would ensure survivors and victims can access 
valuable benefits that would prevent sexual violence and domestic abuse 
in the long run. Women and children are left most vulnerable in the 
midst of financial, employment, and housing instability--all of which 
can increase the risk for sexual violence victimization.\1\ This 
commonsense provision would help provide much-needed economic security 
to these families.
---------------------------------------------------------------------------
    \1\ Basile, K.C., DeGue, S., Jones, K., Freire, K., Dills, J., 
Smith, S.G., Raiford, J.L. (2016). STOP SV: A Technical Package to 
Prevent Sexual Violence. Atlanta, GA: National Center for Injury 
Prevention and Control, Centers for Disease Control and Prevention.

We hope you will consider supporting this provision, and we look 
forward to continuing to work together to move this policy initiative 
forward. Please don't hesitate to reach out to us with any questions or 
---------------------------------------------------------------------------
concerns you may have.

Sincerely,

Elizabeth Barnhill
Executive Director
Iowa Coalition Against Sexual Assault
[email protected]

cc: Senator Ron Wyden, Ranking Member--Finance Committee

Senator Lindsay Graham, Chair--Senate Judiciary Committee

Senator Dianne Feinstein, Ranking Member--Senate Judiciary Committee

                                 ______
                                 
            Leadership Conference on Civil and Human Rights

                     1620 L Street, NW, Suite 1100

                          Washington, DC 20036

                           202-466-3311 voice

                            202-466-3435 fax

                          www.civilrights.org

June 23, 2020

The Honorable Chuck Grassley
Chairman
U.S. Senate
Committee on Finance
Washington, DC 20510

The Honorable Ron Wyden
Ranking Member
U.S. Senate
Committee on Finance
Washington, DC 20510

RE: Statement for the Record, U.S. Senate Finance Committee Hearing on 
``Unemployment Insurance during COVID-19: The CARES Act and the Role of 
Unemployment Insurance During the Pandemic,'' June 9, 2020

Dear Chair Grassley and Ranking Member Wyden:

On behalf of The Leadership Conference on Civil and Human Rights, a 
coalition charged by its diverse membership of more than 220 national 
organizations to promote and protect the rights of all persons in the 
United States, I thank you for the opportunity to submit our views on 
the importance of reauthorizing and extending the Pandemic Unemployment 
Compensation (PUC), Pandemic Unemployment Assistance (PUA), and 
Pandemic Emergency Unemployment Compensation (PEUC) programs contained 
in the Coronavirus Aid, Relief, and Economic Security (CARES) Act. We 
ask that this statement be entered into the record of the U.S. Senate 
Finance Committee hearing entitled ``Unemployment Insurance during 
COVID-19: The CARES Act and the Role of Unemployment Insurance During 
the Pandemic,'' held on June 9, 2020.

As the COVID-19 crisis continues to rage in the United States, it is of 
paramount importance that Congress attend first and foremost to the 
health and safety of the country and continue to provide critical and 
necessary relief and aid to everyone, particularly to the communities 
hit hardest by the pandemic. The United States now leads the world both 
in the number of confirmed COVID-19 cases and COVID-19 deaths, and at 
the same time, millions of people have lost their jobs because of the 
virus, causing substantial financial insecurity. We appreciate the work 
that Congress has done to reduce the devastating impact of COVID-19 on 
the health and economic security of people in America; but our fight 
against this virus is far from over, and the road to recovery remains 
precarious for the most vulnerable in this country.

    Although everyone has been impacted by the COVID-19 pandemic, not 
everyone has been impacted the same. Longstanding inequities and 
systemic racism have not only resulted in Black and Brown communities 
facing increased risk of COVID-19 illness and death,\1\ but also in 
Black and Brown workers suffering alarming rates of unemployment due to 
the pandemic.\2\ Working people of color are disproportionately 
represented in lower-wage jobs that must be done outside the home, 
which has placed them at greater risk of joblessness during the 
pandemic than higher-income White workers who are more likely to hold 
the kinds of office jobs that have been able to transition to remote 
work.\3\ Low-wage industries such as hospitality and retail that rely 
heavily on the labor of people of color have experienced the highest 
rates of unemployment.\4\ In particular, women of color comprise a 
disproportionate share of jobs in the hardest hit industries, 
compounding the economic insecurity many families of color 
experience.\5\
---------------------------------------------------------------------------
    \1\ See ``The COVID Racial Data Tracker,'' The Atlantic, available 
at https://covidtracking.com/race (last visited June 23, 2020).
    \2\ See Patricia Cohen and Ben Casselmen, ``Minority Workers Who 
Lagged in a Boom Are Hit Hard in a Bust,'' New York Times (June 6, 
2020), https://www.nytimes.com/2020/06/06/business/economy/jobs-report-
minorities.html.
    \3\ Elise Gould and Heidi Shierholz, ``Not Everybody Can Work from 
Home,'' Economic Policy Institute (March 19, 2020), https://
www.epi.org/blog/black-and-hispanic-workers-are-much-less-likely-to-be-
able-to-work-from-home/.
    \4\ Chad Stone, ``People Already Facing Opportunity Barriers Hit 
Hardest by Massive April Job Losses,'' Center on Budget and Policy 
Priorities (May 12, 2020), https://www.cbpp.org/blog/people-already-
facing-opportunity-barriers-hit-hardest-by-massive-april-job-losses.
    \5\ See Jasmine Tucker and Julie Vogtman, ``When Hard Work Is Not 
Enough: Women in Low-Paid Jobs,'' National Women's Law Center (April 
2020), https://nwlc.org/resources/when-hard-work-is-not-enough-women-
in-low-paid-jobs/.

For these and other vulnerable communities, the process of economic 
recovery may be slow as communities of color continue to face 
alarmingly high unemployment rates. After losing more than 22 million 
jobs between February and April, the economy added 2.5 million jobs in 
May.\6\ This bump in employment, however, does not tell the complete 
story. Total job losses since February is still around 20 million, and 
the unemployment rate is still higher than the highest level of 
unemployment reached during the Great Recession. Moreover, the gains 
that were experienced were not felt equally. Though the reported 
unemployment numbers improved slightly overall, the unemployment rate 
for Black workers increased in May, and unemployment rates for Black 
(16.8 percent), Hispanic (17.6 percent), and Asian (15 percent) workers 
remained higher than the national average.\7\ This trend is further 
pronounced across gender lines. The unemployment rate for White men in 
May was two percentage points below the national unemployment rate, 
reported at 11.3 percent.\8\ Meanwhile, the unemployment rates for 
Black and Hispanic women were a striking 17.5 percent and 19.5 percent 
respectively, and the unemployment rate for White women was at 13.6 
percent.\9\
---------------------------------------------------------------------------
    \6\ Elise Gould, ``While Welcome Gains, Job Losses Since February 
Still Total 19.6 Million,'' Economic Policy Institute (June 5, 2020), 
https://www.epi.org/press/while-welcome-gains-job-losses-since-
february-still-total-19-6-million-now-is-not-the-time-to-stop-
providing-relief/.
    \7\ Bureau of Labor Statistics, Department of Labor, ``The 
Employment Situation--May 2020'' (June 5, 2020), https://www.bls.gov/
news.release/pdf/empsit.pdf.
    \8\ Cohen and Casselmen, supra note 2. As many as 4.9 million 
people may have been misclassified as employed rather than unemployed 
in the May jobs report making the actual unemployment rate much higher 
than what was reported by BLS. See Chad Stone, ``CARES Act Measures 
Strengthening Unemployment Insurance Should Continue While Need 
Remains,'' Center on Budget and Policy Priorities (June 9, 2020), 
https://www.cbpp.org/research/federal-budget/cares-act-measures-
strengthening-unemployment-insurance-should-continue.
    \9\ Cohen and Casselmen, supra note 8.

The CARES Act, though not complete, has provided a necessary lifeline 
to millions of people who have found themselves out of work during this 
pandemic. The PUA, PUC, and PEUC have been particularly impactful for 
working people on the economic margins, low-wage workers who do not 
have the savings or access to resources that can help sustain them 
through a crisis. This is especially true for many working people of 
color who--because of years of discrimination in employment, education, 
housing, and lending--suffer from racial wealth gaps that make it more 
difficult to withstand sudden job loss. With fewer resources to draw 
on, nearly half of Black and Latino families, for example, report 
increased food insecurity or the inability to fully pay their mortgage, 
rent, or utilities as a result of coronavirus--almost double the 
percentage reported by White families.\10\
---------------------------------------------------------------------------
    \10\ Steven Brown, ``How COVID-19 Is Affecting Black and Latino 
Families' Employment and Financial Well-Being,'' Urban Institute (May 
6, 2020), https://www.urban.org/urban-wire/how-covid-19-affecting-
black-and-latino-families-employment-and-financial-well-being.

Yet, PUC is set to end in about a month, on July 31st, leaving our most 
vulnerable working people without a critical supplement to unemployment 
insurance (UI)--one that has allowed many families to make ends meet. 
PUC helps ensure that working families can remain whole during this 
pandemic. Regular state UI benefits generally replace less than half of 
the average unemployed worker's earnings. The average weekly benefit 
amount varies by state, but the average benefit nationwide was only 
$378 in March, with some working people receiving much less.\11\ In 
Louisiana, for example, the average benefit was only $211 per week.\12\ 
During this particular economic crisis, when businesses are shuttered, 
when there may be no jobs to return to, and the duration of the crisis 
is determined largely by the virus itself, state benefit amounts 
without PUC are insufficient for the average worker. Allowing PUC to 
expire will not end the recession or make jobs return; it will only 
increase financial hardships, and the people who will feel these 
hardships most acutely are people of color who have already been 
systemically economically disadvantaged and who are particularly 
vulnerable to COVID-19.
---------------------------------------------------------------------------
    \11\ Stone, supra note 8.
    \12\ Id.

PEUC, which provides federal funding for an additional 13 weeks of 
state UI benefits, is set to expire on December 31st despite no 
indication that the need will dissipate. During the week ending on May 
30th, over 1 million individuals claimed PEUC benefits,\13\ and these 
benefits are particularly important for communities of color. 
Specifically, extending the duration of UI benefits through PEUC is 
critical for Black workers who have been disadvantaged in the job 
market and as a result have historically experienced longer periods of 
unemployment as compared to White workers.\14\ Failure to extend 
benefits would only exacerbate the harm caused by prior policy choices 
that have made Black communities more vulnerable to unemployment in the 
first place.
---------------------------------------------------------------------------
    \13\ Department of Labor, News Release, ``Unemployment Insurance 
Weekly Claims'' (June 18, 2020), available at https://www.dol.gov/ui/
data.pdf (last visited June 23, 2020).
    \14\ See Christian E. Weller, ``African Americans Face Systematic 
Obstacles to Getting Good Jobs,'' Center for American Progress 
(December 5, 2019), https://www.americanprogress.org/issues/economy/
reports/2019/12/05/478150/african-americans-face-systematic-obstacles-
getting-good-jobs/.

Similarly, PUA, which provides relief to working people who have 
exhausted their state UI benefits or who have been left out of regular 
state UI entirely--independent contractors, freelancers, self-employed 
workers, workers seeking part-time work, and those who do not have a 
long-enough work history to qualify for state benefits--is set to 
expire on December 31st. Though slow to start, PUA has provided real 
relief during this crisis to millions of people. Over 9 million 
individuals claimed PUA benefits during the week ending May 30th.\15\ 
Without PUA, not one of these individuals would qualify for any other 
form of unemployment assistance. And the need continues: over 1.45 
million people filed new PUA claims just in the first two weeks of 
June.\16\ To allow PUA to expire under these circumstances is to allow 
economic ruin for millions of Americans.
---------------------------------------------------------------------------
    \15\ Department of Labor, supra note 13.
    \16\ Id.

As this dual public health and economic crisis goes on, we know that 
many people will not be able to return to work quickly. For communities 
hard hit by coronavirus, family members may still need to provide care 
for someone diagnosed with COVID-19. Employers may have gone out of 
business or may be slow to reopen at full capacity. Still, many 
childcare facilities may remain closed, making employment outside of 
the home impossible for some. Even pre-pandemic, lack of affordable 
childcare presented significant challenges for Black and Latino mothers 
who are more likely to be the sole or primary breadwinners for their 
families and who disproportionately occupy low-wage jobs with 
inconsistent, or nonstandard schedules, making childcare a 
struggle.\17\ Whatever the reason, these individuals and their families 
will continue to need support from PUA, PUC, and PEUC during this 
economic crisis. These programs must be reauthorized and extended.
---------------------------------------------------------------------------
    \17\ Leila Schochet, Center for American Progress, ``The Child Care 
Crisis Is Keeping Women Out of the Workforce'' (March 28, 2019), 
https://www.americanprogress.org/issues/early-childhood/reports/2019/
03/28/467488/child-care-crisis-keeping-women-workforce/.

Importantly, to meet the need, these benefits should not be tethered to 
an arbitrary deadline but must be tied to specific economic triggers to 
ensure that these critical measures stay in place until the labor 
market recovers. It is unlikely that our nation's economic recovery 
will be quick or that it will be experienced equally. Given the 
uncertainty around when this crisis will end, and the magnitude of the 
need, Congress must ensure that relief measures do not expire too soon 
or become unnecessarily politicized, which would only add to the 
hardship being faced by vulnerable communities because of this 
---------------------------------------------------------------------------
pandemic.

The pandemic has exposed and exacerbated persistent disparities in our 
UI system. As we emerge from this crisis, we also ask that the 
Committee consider long-term structural reforms to strengthen the 
ability of UI to deliver meaningful assistance to vulnerable families 
and individuals and act as a stimulus for the economy. Many of our 
coalition members have identified key components of effective long-term 
reform,\18\ including mandating a minimum of 26 weeks of UI in all 
states, requiring states to replace a higher share of people's lost 
income, ensuring that UI is available to part-time workers in every 
state, making work-sharing available in every state, and fixing 
extended benefits triggers on economic indicators so additional weeks 
of benefits are turned on automatically based on increases in the 
unemployment rate.
---------------------------------------------------------------------------
    \18\ National Women's Law Center et al., ``Fixing Unemployment 
Insurance in Response to COVID-19'' (March 2020), https://nwlc-
ciw49tixgw5lbab.stackpathdns.com/wp-content/uploads/2020/03/NWLC-et-
al.-UI-COVID-Factsheet-20200323.pdf.

We thank you again for the opportunity to express our views. We urge 
this Committee to support reauthorization and extension of the PUC, 
PEUC, and PUA to meet the need created by the current economic crisis. 
Specifically, such an extension should be tied to the labor market to 
ensure that relief is available for as long as the economic conditions 
warrant, particularly given the growing uncertainty regarding the 
extent and duration of the downturn. We also ask that the Committee 
consider structural reforms designed to strengthen UI for everyone. 
Please contact Gaylynn Burroughs, Senior Policy Counsel, at 
---------------------------------------------------------------------------
[email protected] with any questions.

Sincerely,

Vanita Gupta
President and CEO

                                 ______
                                 
                           Legal Aid at Work

                    180 Montgomery Street, Suite 600

                      San Francisco, CA 94104-4244

                   T: 415-864-8848 | F: 415-593-0096

                         www.legalaidatwork.org

June 23, 2020

U.S. Senate
Committee on Finance
Dirksen Senate Office Bldg.
Washington, DC 20510-6200

Re: Legal Aid at Work's Statement for the Record for the Hearing on 
``Unemployment Insurance During COVID-19: The CARES Act and the Role of 
Unemployment Insurance During the Pandemic,'' Tuesday, June 9, 2020

Dear Senate Committee on Finance:

Legal Aid at Work (``LAAW'') is pleased to offer the following letter 
about the implementation of the Coronavirus Aid, Relief, and Economic 
Security Act, also known as the CARES Act.

LAAW is a California-based nonprofit legal services organization. For 
over 100 years, we have served low-income, working families, and worked 
to enforce and strengthen workers' rights. Through our free clinics and 
helplines, direct representation, and policy advocacy, we enforce 
compliance with, and seek to expand, existing workplace protections. 
The CARES Act is near and dear to our organizational heart. The 
populations we serve face income inequality, vast differences between 
the cost of living and their salaries, and uncertainty in the midst of 
a global pandemic. Low-income workers bear the biggest economic burden 
as a result of state shutdowns, and it is the government's 
responsibility to take care of our most vulnerable citizens.

As a workers' rights organization in California, LAAW has seen first-
hand the direct and powerful impact the programs created under the 
CARES Act have had on low-wage workers. LAAW operates twelve Workers' 
Rights Clinics across California and an additional five subject-matter 
specific helplines. Through these clinics and helplines, we have heard 
from thousands of workers who are unemployed due to COVID-19 and are 
unsure when they will be able to return to work. Specifically, since 
March 16, 2020, our Workers Rights Clinics have conducted approximately 
750 intakes. To put that in perspective, in the year prior, we 
conducted only 285 intakes in that same time frame. The key problem 
discussed, overwhelmingly, was Unemployment Insurance benefits. These 
numbers only represent the intakes our law clerks and attorneys 
performed after assessing for eligibility for our program; in fact, we 
had over 1,600 phone calls to our Workers' Rights Clinic in that same 
time period. Additionally, for our newly launched clinic designed 
specifically to help workers file for Pandemic Unemployment Assistance 
(PUA), there were over 300 requests for appointments in the first few 
weeks alone.

Because many of our clients live paycheck to paycheck in jobs that have 
been disproportionately affected by the pandemic, such as domestic 
labor and restaurant staff, the vital assistance of the programs 
created by the CARES Act cannot be overstated. Specifically, the 
additional money provided to workers under Pandemic Unemployment 
Compensation (PUC), is a lifeline for these workers. The average 
Unemployment Insurance benefit amount in California is $321 per week 
(roughly $1,400 per month).\1\ When compared to the cost of living in 
California, it is clear that this amount is not sufficient to support a 
worker and their family. The median monthly rent of a two bedroom 
apartment in March 2019 in San Francisco was $2,474, in San Diego 
$2,030, and in Los Angeles $1,752.\2\ It is clearly impossible for 
families to survive on Unemployment Insurance benefits alone without 
the additional $600 from the federal government. Indeed, for many of 
them, the $600 per week is the difference between starving and putting 
food on the table, homelessness and making rent, affording healthcare 
and dying of preventable diseases.
---------------------------------------------------------------------------
    \1\ Employment Development Department, Quick Statistics, https://
www.edd.ca.gov/About_EDD/Quick_Statistics.htm (last visited June 23, 
2020).
    \2\ Nick Wallace, What Is the True Cost of Living in San 
Francisco?, Smart Asset (March 4, 2020), https://smartasset.com/
mortgage/what-is-the-cost-of-living-in-san-francisco.

In addition to skyrocketing unemployment rates, even workers who are 
still employed are now struggling to work and provide care for children 
and family members whose school or place of care is now unavailable. 
Many of these workers must turn to Unemployment Insurance benefits as 
there is no other care option, and they are unable to perform work 
right now. One of our clients, ``Tamara,'' works as a security guard 
and is a single mother to a three-year-old. Her daycare suddenly 
informed her on a Wednesday that they would no longer be taking care of 
children because of COVID. She called her job to inform them that she 
may not be able to work that Thursday or Friday. The supervisor she 
spoke with gave her backlash, saying that Tamara was going to have to 
---------------------------------------------------------------------------
take sick time, get written up, or possibly get fired.

As Tamara's story shows, it is essential that any future legislation 
continues to ensure parents can continue to receive Unemployment 
Insurance if they are unable to work because of the need to care for 
their children and ensures workers like Tamara will not lose their job 
in these situations. However, any proposal must go beyond just children 
and include all family members for whom the worker is providing care. 
Individuals in communities of color are especially impacted by family 
caregiving protections, because they are more likely to be caregivers 
and also workers. Approximately 68% of Latinx caregivers are also in 
the workforce, as well as 67% of Asian caregivers, 60% of Black 
caregivers, and 56% of white caregivers.\3\
---------------------------------------------------------------------------
    \3\ NAC and AARP Public Policy Institute, 2015 Report: Caregiving 
in the U.S. 61, AARP (June 2015), https://www.aarp.org/content/dam/
aarp/ppi/2015/caregiving-in-the-united-states-2015-report-revised.pdf

Although the new programs under CARES may have had a bumpy 
implementation, now implemented, they are a lifeline for the over 
325,000 Californians who filed new Unemployment Insurance claims in 
April 2020 alone.\4\ This is especially significant considering that 
April 2019 saw only around 44,000 new unemployment claims. The most 
recent data indicate that over 2.4 million Californian jobs were lost 
from March to April, far exceeding the previous month-to-month high of 
132,800 jobs lost during the Great Recession from December 2008 to 
January 2009.\5\ Removing these protections now that workers are just 
starting to reap their benefits and before the end of this pandemic is 
even known would be irresponsible and devastating to workers and our 
overall economic recovery.
---------------------------------------------------------------------------
    \4\ Loree Levy and Aubrey Henry, California Unemployment Rate Rose 
to Record 15.5 Percent in April, Employment Development Department (May 
22, 2020), https://www.edd.ca.gov/Newsroom/unemployment-may-2020.htm.
    \5\ Loree Levy and Aubrey Henry, California Unemployment Lowers 
Slightly to 16.3 Percent in May, Employment Development Department 
(June 19, 2020), https://www.edd.ca.gov/newsroom/unemployment-june-
2020.htm.

Rather, these programs must be extended and there must be further 
investment in effective implementation. Our own work in California 
implementing the first-in-the-nation Paid Family Leave program can be 
instructive. As we learned, it is critical that implementing agencies 
like the Department of Labor partner with grassroots organizations, 
communities of color, and immigrant communities to ensure effective 
outreach and equitable implementation. If these communities are not 
---------------------------------------------------------------------------
aware of the programs, they will not be able to benefit from them.

Based on the above, we urge that Congress take action to reauthorize 
PUC and provide an appropriate extension of PUA and PEUC based on 
economic triggers, rather than specific dates, to ensure these 
essential financial supports do not end prematurely. This is essential 
to ensure that workers and our economy survive this pandemic. It is 
vital that we fight both the spread of COVID-19 and the effects of 
preventable, poverty-related dangers.

            Very truly yours,

            Jenna Gerry
            Senior Staff Attorney
            Work and Family Team
            Legal Aid at Work

            Simone Lieban Levine
            Law Clerk
            Work and Family Team
            Legal Aid at Work

                                 ______
                                 
                      Lutheran Services in America

                   100 Maryland Avenue, NE, Suite 500

                          Washington DC 20002

                              202-499-5832

         Statement of Charlotte Haberaecker, President and CEO

On behalf of the one in 50 Americans who rely on the 300 Lutheran 
health and human services providers throughout the United States that 
comprise Lutheran Services in America, thank you for considering our 
statement at this important time. With our active presence in over 
1,400 communities in 45 states as seen on this map, our work is 
critically important in improving the lives of America's most 
vulnerable people, ranging from seniors, veterans, and people with 
disabilities to children, youth and families, and the homeless.

The COVID-19 pandemic dramatically affects all of the people we serve 
and services we provide. Our 300 health and human service organizations 
are on the front lines caring for people while taking extraordinary 
steps to protect their staff and people served. Yet they increasingly 
struggle with equipment shortages, especially personal protective 
equipment; severe workforce shortages necessitating hazard pay; 
declining revenue; and the need to reduce or eliminate needed services. 
These severe challenges are occurring while our organizations 
simultaneously face limited cash reserves, decreasing revenue and 
already-tight margins.

Our work is deeply embedded in communities across the country where we 
have provided services for over 150 years. Yet our work-which comprises 
a significant part of the health and human services delivery system-
cannot continue without specific measures taken soon to support 
nonprofit health and human service organizations. Without needed 
resources to support our work during this time of crisis, we will be 
unable to meet the increasing needs of individuals and communities at 
their most vulnerable time. One specific resource that is direly needed 
is an increase in the federal unemployment insurance reimbursement for 
self-funded nonprofits (also known as ``reimbursing employers'') to 
100% of costs.

Since 1972 when nonprofit organizations were required to provide 
unemployment benefits to their employees for the first time, 501(c)(3) 
charitable nonprofits were given the option to opt out of the State 
Unemployment Tax system and have been permitted by Congress to self-
insure claims for unemployment benefits by paying back the state 
unemployment trust fund for benefits paid to their former employees. 
These ``reimbursing employers'' include nonprofits, state and local 
governments, and federally recognized Indian Tribes that follow the law 
by electing to make payments in lieu of contributions to state 
unemployment trust funds.

As currently enacted into law, Section 2103 of the CARES Act provides 
that the federal government will cover 50 percent of the cost of claims 
charged to these reimbursing employers. This will subject self-funded 
nonprofits throughout the country to crippling payments to their state 
unemployment systems later this year, while other employers will likely 
experience little or no additional costs resulting from mass COVID-19-
related layoffs. The impacts will be real. Many nonprofits will be hit 
with a bill for reimbursement to states at a time when the demand for 
services is highest.

Seventy-five percent of payroll costs in the nonprofit sector are paid 
out by ``reimbursing employers.'' Together, these organizations provide 
much of the infrastructure that we rely on to serve people in all our 
communities. Addressing this issue by providing 100% reimbursement for 
these nonprofits will help ensure that they will be able to better 
direct their limited resources to serving vulnerable people through the 
care and services they provide every day.

                                 ______
                                 
                   Philadelphia Unemployment Project

                      112 N. Broad St., 11th Floor

                         Philadelphia, PA 19102

                              267-976-4706

                   Statement of John Dodds, Director

The Philadelphia Unemployment Project has been around since 1975 and we 
have never seen anything like this. Massive increases in unemployment 
like we have experienced over only a couple of months are 
unprecedented.

The current unemployment rate in the nation of 13.3% is far higher than 
at any time since the Great Depression, other than April. 
Pennsylvania's unemployment rate is 15.1% in the latest count and Black 
unemployment nationally rose again to 16.8% in May. The Bureau of Labor 
Statistics has indicated that the national number for May is an 
undercount and could actually be 16.3%. In the week the BLS did the 
unemployment survey for May there were 29,965,415 people collecting 
unemployment benefits but the BLS said that only 20,935.000 were 
unemployed.

``The unemployment rate itself is significantly going to understate the 
drop in economic activity,'' indicated Stephanie Aaronson, the director 
of economic studies at the Brookings Institution. In other words, 
despite President Trump's victory lap, unemployment remains totally out 
of hand.

As the collapse of the economy took place the Congress passed the CARES 
Act to try to avert an economic catastrophe. Included in the Act was an 
extension of unemployment benefits to 39 weeks and a $600/weekly 
supplement to worker's unemployment checks. The CARES Act provided $887 
Billion for small and large businesses and $260 Billion for 40 million 
workers thrown out of their jobs. While the business funds have been 
extended for longer periods and much is still unspent, the $600 
supplement is due to expire after only 4 months, long before most 
workers will be able to return to their jobs. Remember, workers whose 
employer calls them back must return to work unless they have good 
cause or they will lose their unemployment checks. The House has passed 
legislation to continue the supplement another six months, however 
President Trump and Leader McConnell are opposed to continuing the 
program, as tens of millions remain out of work.

Consumer spending amounts to 70% of the US economy. Providing the $600 
supplement gave a great boost to laid-off workers who were able to 
maintain their living standards despite the pandemic and some lower 
paid workers have gotten more than that when working. 40% of low wage 
workers lost a job in March according to the Federal Reserve, as lower 
paid employees have been hardest hit by the pandemic. The supplement 
has helped keep the economy from totally imploding and using the 
unemployment system to get stimulus funds to those in need is a common 
sense means of inserting stimulus, targeted to those in need and 
keeping the economy from going under. (Although the PA unemployment 
service has been far from efficient, leaving many thousands of PA 
workers waiting for their unemployment checks for as long as 10 to 12 
weeks, but that's a story for another day.)

On top of the stimulus provided to the broader economy by the $600 
supplement, there is the situation for so many families who need that 
money to survive. Enough statistics have been provided. I now want to 
provide testimony from some of Philadelphia's unemployed on the 
importance of the supplement.

``I am currently receiving these benefits. I am in the live event and 
theatre production sector, and our industry has no way of coming back 
to work right now . . . and will not until there is an effective 
treatment or cure for COVID-19.''--James Jackson

``I am still in dire need of mine I will be homeless if/lose mine.''--
Ash H.

``I am a single mother of two young children and an independent 
contractor and has been out of work since March due to the pandemic. I 
have been collecting the PUA benefits plus the $600 stimulus for 12 
weeks now and without it my family and I would have nothing! I would 
not be able to pay any of my bills, have food in my home, diapers and 
many other essential things my youngest child needs. Without the extra 
$600 stimulus I still would not be able to live off of the $195 a week 
especially because the dependent allowance is only $8.00.Please do not 
stop the $600 stimulus prematurely because without it many families 
including mine would lose everything!''--Alyssa Paul

``I receive this and yes it's not the time to cut it off. This is how I 
pay my rent and bills. I only receive $175 a week. That's not even 
enough at the end of the month to pay my rent and bills if they cut it 
off.''--Ty Clark

``I'm in desperate need of my continued $600/week pandemic payments as 
I'm not working and haven't been called back to work. I'm the only 
person in my household who's able to provide for our family. I'm a 
father of 3 kids who need to eat and have running utilities. This will 
be a major setback if my benefits are discontinued! I'm not a lazy 
person. I'm someone who wishes to return to work soon but if this shall 
happen myself and my family will be homeless worst then before the 
pandemic if this should happen!''--Marcellus Swann

``I get the $600. Without it my unemployment is only $95 a week.''--
Kris Hagan

``I really need this assistance because it helps to cover my bills as 
well as taking care of my child. I currently had to reapply for 
benefits and not sure if I will get unemployment or get a small amount 
of weekly benefits, so this PUA will help to cover my bills until I 
find a job or get called back to work.''--Lewanna Golding, Long-term 
substitute teacher

To protect these families and continue a solid stimulus to the economy 
we need to maintain this supplement to the benefits of laid off 
Americans.

                                 ______
                                 
                 Letter Submitted by Michelle Phillips
June 17, 2020

U.S. Senate
Committee on Finance
Dirksen Senate Office Bldg.
Washington, DC 20510-6200

Dear Senate Committee on Finance,

    I am writing to you in hopes for change regarding W-2/1099 Hybrids 
not eligible for PUA until UI claims are exhausted. I am a self-
employed massage therapist with a $1,748 UI starting claim balance from 
a 2019 on-call position that I worked a few days at ($4,000.) My 
primary income was from my mobile/brick and mortar massage business 
($36,000). In March I officially closed my business due to COVID-19 
with the intention of doing mobile massage only once massage is 
approved in California. I have paid into unemployment for 20 years and 
went independent 2 years ago to accommodate a full time school 
schedule. As of June 19th, massage will reopen in California but in-
home massage is not approved.

    In March I filed for UI and was approved for $81/week for 
approximately 22 weeks, the time it will take to exhaust the $1,748 
starting claim balance. My primary self-employment income of $36,000 is 
not being acknowledged. As low as my balance is, I don't understand why 
EDD chose to spread my income over so many weeks. Why couldn't they pay 
out a more reasonable $167 or $300 weekly payment over less weeks 
(i.e., $1,748/6 weeks = $291 weekly)? I would then be able to file for 
PUA which would be based off my primary source of $36,000 self-
employment income. I submitted an EDD Appeal on June 16th and attended 
the June 17th Zoom California EDD Appeal Court Hearing.

    The additional $600 weekly has been my saving grace. When it 
expires end of July, I'll have 5 weeks left of my UI claim at $81/week 
before I can apply for PUA. Who knows how long that will take before I 
receive a payment? I'm hoping to be in my new career field of 
ultrasound by then but I hear many hospitals are on a hiring freeze and 
testing centers have limited availability in scheduling licensing 
exams. At that point in time, mobile massage may or may not be approved 
to return to and I don't know if my clients (some immune compromised) 
will even allow it.

    The CARES Act is excluding us hybrids who have very little W-2 
income and majority 1099. I don't believe this was the intention. Here 
are my solutions that I'd appreciate being taken into consideration:

    (1)  As previously stated, weekly unemployment should be increased 
to a reasonable number Spread over less weeks. Allowing the claimant to 
be eligible to file for PUA sooner, where the Majority of their income 
was acquired.
    (2)  If PUA is federal and UI is state, the claimant should be able 
to file for both simultaneously as the claimant claims and pays taxes 
to both. UI would pay based of the W-2 income and PUA would be based 
off the 1099 income.
    (3)  If a claimant has predominantly been a W-2 employee in the 
past and has paid into unemployment for years, then they should be 
eligible for the maximum UI.
    (4)  If a claim balance is low, EDD should just send the balance 
via check or direct deposit. It would conserve EDD resources so that 
they may focus on larger claims/issues.
    (5)  The $600 weekly extension should continue for those who are 
unable to return to their work (such as mobile massage therapists) and 
to those whose income is significantly less after they've returned to 
work (i.e., 50% less up to $1,000 weekly income, paystub required to 
submit). Extend the additional $600/weekly for 3 months or until the 
end of 2020.

    I believe I should have retroactive pay of $300-$369 per week from 
when I filed my claim mid-March based off my total income and years 
paid into UI. PUA would have approved me for much more than UI. I am a 
US Citizen, I pay taxes on time every year, a business owner, and full 
time student (having to pay my school loan while still attending the 
last 2 years). Thank you for your consideration and please acknowledge 
us hybrids who have not been getting the financial support we deserve.

Sincerely,

Michelle Phillips
CC: Office of Kamala Harris and Office of Diane Feinstein

                                 ______
                                 
                    Letter Submitted by Robin Rogers
June 10, 2020

U.S. Senate
Committee on Finance
Dirksen Senate Office Bldg.
Washington, DC 20510-6200

Hello, I am primarily an independent contractor from San Diego and I 
work as a ``Brand Ambassador.'' My job entails doing educational 
product sampling events and in-store demos within the health and 
wellness industry. One of the most challenging aspects of this type of 
position is to schedule enough hours to earn a living. Consequently, it 
is often necessary to piece together a decent amount of hours by 
working for different companies. In 2019 and up until March 17th when 
all my ``gigs'' were canceled due to COVID-19, I worked for four 
separate companies and I was paid by only one as a W-2 employee. I was 
an independent contractor for the other three, which accounted for 85% 
of my income. I earned about 27K from 1099 income in 2019 and I am 
currently only receiving $114 per week in UI benefits. I should be 
receiving a substantially higher benefit amount, if my total income is 
taken into consideration.

Unfortunately, the CARES Act (and its interpretations) is preventing me 
and all mixed-income earners from receiving the full amount of PUA 
Congress intended us to get, because of very little W-2 income. There 
are many of us ``creative types'' in California. Would you PLEASE help 
us get what we are entitled to?

Thank you kindly,

Robin Rogers

                                 ______
                                 
                   Letter Submitted by Cheyenne Sales
U.S. Senate
Committee on Finance
Dirksen Senate Office Bldg
Washington, DC 20510-6200

I respectfully request that our elected officials recognize and 
prioritize the significant financial impact of including a small 
amendment to the CARES Act with regard to unemployment. The world's 
focus shifts away from the daily struggles many face with the 
elimination of work in industries that will not recover in the 
foreseeable future and many sole proprietors/small business owners 
won't recover at all. A known but unresolved issue that will address 
the unemployment systems criteria for implementing the Pandemic 
Unemployment Assistance (PUA) program is needed now.

Specifically, I refer to ``Hybrid'' workers, taxpayers that have 
multiple jobs as independent contractors that form a significant 
portion of the work force in this country. We pay taxes on income 
derived from both 1099/W-2, typically very low W-2 earnings as this 
often is from part-time ``supplemental'' work. Pre-pandemic the W-2 
income was the ONLY eligible option to collect unemployment insurance 
and for hybrid workers this has not changed!!

Consider the Meeting and Events/Hospitality Industry that operate large 
corporate, healthcare and sporting events. This industry will be slow 
to recover amidst health concerns over air travel, financial costs to 
bring groups to hotels that share large scale meeting rooms, buffet 
style meals and other activities. This requires the logistics of 
professionals much like those in the entertainment industry who work 
tirelessly behind the scenes to make it all happen.

In the case of hundreds of thousands of independent contractors 
throughout the country we are falling through a crack by being asked to 
survive on amounts starting as low as $40 in California (in my 
particular case $86/week) because the ONLY income allowed in the 
current unemployment calculations is from a small but qualifying PART-
TIME job. The minimum amount for PUA in California is $167 (50% of the 
average UI claim for each respective State in 2019) The reality for 
many is part time jobs are one of the first to reopen and by working 1 
day a week they are disqualified from ANY of the federal funds that 
were supposed to be a lifeline. As futile as it feels to write this 
knowing that without many elected politicians being willing to fight 
this fight on our behalf many continue to suffer in silence. While 
other groups with lobbyists, lawyers or other organizations working on 
their behalf jump to the front of the focus.

At every update by Labor Secretary Julie Su and many other local 
politicians they simply say that the State of California does not have 
the authority to make these changes. They must come from the Federal 
Government so we continue to be at the mercy of our elected officials 
to make change. There are literally millions contributing to social 
media platforms, desperate for solutions and help as far too many 
across this nation say they are aware of the issue but do nothing more. 
There are many executive orders for other groups that have been 
resolved on a state level that I question if the reason this change is 
not being addressed runs deeper.

A simple fix . . . allow ALL income no matter how it is taxed to be 
considered when evaluating a person's qualifications for the CARES Act 
assistance currently being managed by existing, antiquated and 
seriously underperforming unemployment systems.

Thank you for your time,

Cheyenne Sales

                                 ______
                                 
                    Texas Council on Family Violence

                            P.O. Box 163865

                            Austin, TX 78716

                              800-525-1978

                                tcfv.org

June 23, 2020

Hon. Charles E. Grassley,           Hon. Ron Wyden
Chairman                            Ranking Member
U.S. Senate                         U.S. Senate
Committee on Finance                Committee on Finance
219 Dirksen Senate Office Building  219 Dirksen Senate Office Building
Washington, DC 20510                Washington, DC 20510

Hon. John Cornyn
U.S. Senate
Committee on Finance
219 Dirksen Senate Office Building
Washington, DC 20510

Re: Submission for Hearing Record

Dear Chairman Grassley, Ranking Member Wyden, and Senator Cornyn:

I write regarding the hearing held by the Senate Finance Committee 
earlier this month: ``Unemployment Insurance During COVID-19: The CARES 
Act and the Role of Unemployment Insurance During the Pandemic.''

With over 1,300 members, the Texas Council on Family Violence is the 
statewide coalition of family violence service providers and allied 
programs working to promote safe and healthy relationships by 
supporting service providers, facilitating strategic prevention 
efforts, and creating opportunities for freedom from family violence. 
While promoting safe and healthy relationships, TCFV advocates for the 
well-being and security of all Texans, those from historically 
marginalized populations and those facing barriers to safety such as 
poverty, homelessness and housing instability--often prompted or 
exacerbated by job loss.

The Texas State Legislature initially created access to unemployment 
insurance for survivors of family violence and stalking in 2003. Texas 
has since expanded upon this access for survivors and included access 
to UI for victims of sexual violence. While the original provisions and 
earlier expansions were hard fought and took several Legislative 
Sessions to accomplish, the last expansion of access to survivors of 
sexual assault in 2013 passed without controversy. The Texas Workforce 
Commission has reported relatively low numbers of utilization of UI by 
survivors applying under this provision.

With respect to receipt of unemployment benefits by survivors during 
the pandemic, we are heartened that Congress has provided this access 
to survivors nationwide. The stay at home orders, some of which are 
only now being lifted, mean that some survivors (unless they were 
``essential workers'') have been forced to co-locate around the clock 
with abusive intimate partners, and that some will have to leave their 
jobs and their homes in order to secure safety for themselves and their 
family members. Pandemic Unemployment Assistance (PUA) has proven 
incredibly helpful to some survivor workers who would not have 
qualified under the requirements of the regular unemployment insurance 
program, primarily because they have not worked long enough. As is the 
case for most states during the pandemic, however, the unprecedented 
number of unemployment applications has meant a very long wait for 
benefits approval for most, including survivor workers- especially 
those who were turned down for regular unemployment insurance, but 
later found eligible for PUA.

Last week, TCFV served as faculty for an Office on Violence against 
Women (OVW) supported webinar for lawyers and advocates on COVID-19 and 
unemployment insurance access for survivors of domestic and sexual 
violence. Nearly 400 lawyers and advocates signed up to attend (with 
Texans comprising 10% of those interested), which testifies to both the 
interest in this subject area and the need for the Congress to do more.

In closing, we understand that the Senate is likely to take up the 
issue of extending unemployment insurance in the next several months. 
Should you have the opportunity to strengthen survivors' access to 
unemployment insurance benefits including provisions that would include 
survivors on the ``good cause'' lists in all states, extending PUA for 
those not eligible for general unemployment, and providing needed 
training to states' labor department staff, we strongly encourage you 
to do so.

We would be pleased to respond to any questions, and request that this 
letter be placed in the hearing record.

Thank you,

Linda X. Phan
Director of Public Policy
Texas Council on Family Violence

cc:
Hon. Lindsey Graham                 Hon. Dianne Feinstein
Chairman                            Ranking Member
U.S. Senate                         U.S. Senate
Committee on the Judiciary          Committee on the Judiciary
224 Dirksen Senate Office Building  224 Dirksen Senate Office Building
Washington, DC 20510                Washington, DC 20510

                              
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