June 4, 2020 House GOP leaders propose UI return-to-work bonuses as incentive for the unemployed to return to work Representative Kevin Brady, ranking Republican member on the House Ways and Means committee, announced on June 1, 2020, that he is introducing legislation, Reopening America by Supporting Workers and Businesses Act of 2020, that would support businesses now reopening from the COVID-19 shutdown through provisions that would bring the unemployed back to work more quickly. Time limited back-to-work bonuses Citing concerns that the added $600 per week of Federal Pandemic Unemployment Compensation (FPUC) benefits made available under Coronavirus Aid, Relief, and Economic Security (CARES) Act could be giving workers "more in unemployment than their paycheck," Rep. Brady proposes allowing workers to keep up to two weeks of the $600 added benefit after returning to work. The back-to-work bonus program would expire on July 31, 2020, the same time that the FPUC benefits expire. In his press release, Rep. Brady stated that the expansion of unemployment insurance (UI) benefits under the CARES Act has made it challenging for businesses to recall workers, which is of particular concern for employers participating in the Paycheck Protection Program, where keeping employees on the payroll is a prerequisite to loan forgiveness. Return to work reporting Rep. Brady also proposes to strengthen the integrity of the state UI benefit program by requiring that states have a mechanism for employers to report job refusals and that individuals receiving UI benefits receive notice from the state about their obligation to return to work and the good-cause exceptions that apply. Relief for nonprofits Nonprofit organizations have the option of paying state UI contributions (contributory employers) or reimbursing the state for the UI benefits paid to their workers (reimbursing employers). The CARES Act provides for transfers to a state's account in the unemployment trust fund from the Federal Unemployment Account to provide partial reimbursements (generally 50% of the amount of payments in lieu of contributions) to state and local governmental entities, certain nonprofit organizations, and federally recognized Indian tribes for weeks of unemployment between March 13, 2020, and December 31, 2020. The CARES Act requires that reimbursing employers first reimburse to the state the UI benefits paid to their employees, with a refund paid later to offset 50% of the cost. (U.S. Department of Labor Program Letter 18-20.) Rep. Brady proposes that reimbursing nonprofit organizations would not have to pay the full UI benefit and wait for a state refund. Instead, they would be allowed to reduce their UI reimbursements to the state immediately. Ernst & Young LLP insights White House economic advisor Larry Kudlow told Fox News on May 27, 2020, that the Trump Administration is open to the back-to-work bonus for the unemployed who return to work. Senator Rob Portman (R-OH) has made a similar proposal, though his bonus would be $450 per week. Final passage of a return-to-work bonus program could face challenges from House Democrats who have voted to extend the FPUC program to January 2021 under the Heroes Act. ———————————————
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