Will Labor Day Disrupt My Benefits Payments?

Federal unemployment benefit payments will be affected from September 6, the date of Labor Day in 2021. The early September expiration date for unemployment insurance (UI) programs was announced in August by the U.S. Department of Labor.

The UI programs were first enacted in the CARES Act (Coronavirus Aid, Relief and Economic Security Act), which was introduced in March 2020 during the Donald Trump administration, before being extended again under President Joe Biden's American Rescue Plan.

Will Labor Day Affect Unemployment Benefits?

Americans can no longer receive federal benefits through the UI programs as those programs expired on September 6, as noted by the Department of Labor in August.

A letter sent on August 19 by Secretary of the Treasury Janet Yellen and Secretary of Labor Martin Walsh to Senate Finance Committee Chairman Ron Wyden and House Ways and Means Committee Chairman Richard Neal, said that while there was "still more work to do," over 4 million jobs have been created and the unemployment rate has fallen from 6.3 percent to 5.4 percent under Biden's American Rescue Plan.

The letter confirmed: "The temporary $300 boost in benefits will expire on September 6th, as planned. As President Biden has said, the boost was always intended to be temporary and it is appropriate for that benefit boost to expire.

"In addition, President Biden believes that the conditions exist in many states such that the other emergency UI programs (the extended-length benefits and the coverage of individuals not otherwise within the scope of UI) can end on the date set in the American Rescue Plan," the letter said.

According to a report by The Century Foundation (TCF), a U.S.-based think tank, the latest move was described as "the largest cutoff of unemployment benefits in history," with an estimated 7.5 million workers no longer able to receive benefits through the Pandemic Unemployment Assistance (PUA) or the Pandemic Extended Unemployment Compensation (PEUC) programs from September 6.

Americans will also no longer receive benefits through Federal Pandemic Unemployment Compensation (FPUC) from September 6.

The TCF report estimated: "The remaining safety net is only likely to cover less than 200,000 of these unemployed workers."

Pandemic Unemployment Assistance

The PUA program provided benefits to eligible Americans who were self-employed, seeking part-time employment or those who would typically not qualify for UI benefits under state or federal law, such as gig workers, according to the Department of Labor.

To be eligible for benefits through PUA, individuals were required to "demonstrate that they are otherwise able to work and available for work within the meaning of applicable state law, except that they are unemployed, partially unemployed, or unable or unavailable to work because of COVID-19 related reasons," among other requirements, the department explains.

Federal Pandemic Unemployment Compensation

The FPUC program initially offered $600 per week (and later $300 per week) in federal benefits for weeks of unemployment ending on or before July 31, 2020 to eligible Americans who were receiving certain UI benefits, including regular unemployment compensation, the Department of Labor said.

Pandemic Extended Unemployment Compensation

The PEUC program allowed Americans who had exhausted benefits they claimed under regular unemployment compensation or other programs to receive up to 13 weeks of additional benefits, the Department of Labor website explains.

States were required to offer flexibility in "meeting PEUC eligibility requirements related to 'actively seeking work' if an applicant's ability to do so is impacted by COVID-19," the department said.

Other Unemployment Benefits

Americans may still be eligible for state unemployment benefits amid the ongoing COVID-19 pandemic, especially as the Delta variant may also "pose short-term challenges to local economies and labor markets," the latest Department of Labor letter said.

"Even as the economy continues to recover and robust job growth continues, there are some states where it may make sense for unemployed workers to continue receiving additional assistance for a longer period of time, allowing residents of those states more time to find a job in areas where unemployment remains high.

"Now, in states where a more gradual wind down of income support for unemployed workers makes sense based on local economic conditions, American Rescue Plan funds can be activated to cover the cost of providing assistance to unemployed workers beyond September 6th," the department said.

The Treasury Department re-affirmed that states can use their allocations of the $350 billion funds from the American Rescue Plan to provide assistance to unemployed residents, including by "continuing to provide additional weeks of income support to workers whose benefits expire on September 6th and to workers outside of regular state UI programs," the letter advised.

Contact your state government office for more information on claiming state unemployment benefits.

The Department of Labor also announced an additional $47 million in "new CAREER grants" in support of re-employment services for all Americans.

"These grants are on top of the $43 million in grant funds for reemployment services announced earlier this year, more than $400 million in funding for proven workforce strategies, and support to workforce development agencies and other entities to ramp up services to connect workers with good jobs," the letter said.

Biden has also called on Congress to take up long-term UI reform as part of the reconciliation process, when Congress returns from recess.

The U.S. Department of Labor.
Signage outside the U.S. Department of Labor building in Washington, D.C. in March 2020. Alex Edelman/AFP via Getty Images