A recent Axios report highlights a surprising development in unemployment insurance policy. Several red-leaning states (including Florida, Iowa, Kansas, and Tennessee) are revising their unemployment insurance eligibility criteria to allow people to quit their jobs rather than obey an employer vaccine mandate. This change follows a Biden administration policy requiring employers with a hundred or more employees to require vaccination or weekly testing. While the Fifth Circuit has suspended OSHA enforcement of this policy, many employers have already begun creating and enforcing mandates for their employees regardless.
Typically, workers who quit their job are not eligible for unemployment insurance–only those laid off by their employer. But so far, relatively few people appear to have quit their jobs where their employers have introduced mandates. For example, after the NYPD imposed a vaccination mandate, only 90 out of 35,000 officers left. Not bad – especially in a worker’s market where 3 percent of workers quit for a new job every month.
Given these numbers, opening up UI eligibility will not affect material outcomes. Instead, it mainly reflects governors and legislatures who want to signal their opposition to the Biden administration’s vaccination policy. However, this policy change illustrates an important lesson that is widely applicable to the entire unemployment insurance program.
The distinction between quitting and being fired is not real
Allowing people who refuse to get vaccinated to access UI benefits reflects a fact that sometimes goes unacknowledged in policymaking. Specifically, there isn’t a well-defined line between “quitting” and “firing.”
While some elements of work are contractually defined (most obviously, a wage), employers have control over a range of job conditions. Employers can change your hours, the location of your office, even whether you are allowed to work remotely. Employers can effectively force employees to “quit” at their discretion by exercising these powers.
The Department of Labor (DOL) can have difficulty adjudicating the precise reason that a given worker left an employer. For example, suppose an employee quits two weeks after their employer imposes a vaccination mandate. There’s no way that the Department of Labor can determine if this is the real reason they quit or a conveniently timed excuse that allows them to collect unemployment insurance. The DOL and the legal system try to adjudicate these to the best of their abilities, but ultimately, they require subjective judgment calls. Making those calls means processing the necessary paperwork and getting sign-off from administrators, slowing down the process and making it more expensive. That would make scenarios like the month-long delays in UI receipt throughout the pandemic worse.
Beyond vaccine mandates – unemployment due to health risks
This is not the first time policymakers have opened up the unemployment eligibility rules to give access to a group that would otherwise be denied. The Biden and Trump administrations instructed states to allow anyone who quit their job because of Covid risk to receive unemployment insurance. However, the impact of this policy is unclear. States like Iowa classified workers who refused to return to work after a recall as a “voluntary quit,” making them ineligible for unemployment insurance benefits.
Beyond Covid, many other people should receive unemployment insurance but can fall through the cracks without specific legislation making them eligible. For example, 39 states have issued laws that make victims of domestic violence, sexual assault, or stalking eligible for unemployment insurance. Victims of domestic violence often have to leave their jobs–either because the violence causes them to miss work or because the perpetrator knows their current workplace and can use this knowledge to stalk them at work.
While the steps these states have taken to open up unemployment insurance to victims of domestic violence are laudable, processing the claims is difficult. For example, Vermont asks victims of domestic violence to submit documentation of their claims (such as a court order) and to exhaust all available options (such as relocating to a shelter or getting a protection order) before applying for unemployment insurance – a high bar to meet during a crisis. Administrative burdens like this often mean that increased eligibility is only theoretical.
An unemployment insurance system without the guesswork
No matter the source–vaccine mandates, coronavirus health risks, or domestic violence–creating loopholes to allow new populations to access unemployment insurance results in ill-defined and hard-to-administer exclusion criteria. Moreover, these changes decrease the operational efficiency of unemployment insurance itself.
A better approach would be for the UI system not to be particularly concerned with the precise nature of a given unemployment event, but to provide unemployment benefits under well-defined conditions that the Department of Labor can assess. Unemployment insurance should simply be provided after any separation event—no matter who initiated it or the underlying reason. The government does not know what caused the separation and should not try to guess. This change would mean faster processing times and less paperwork burden for employers and workers.
A change like this should not happen in isolation. Instead, it should be paired with programs that reconnect workers with jobs and get them back into the labor market. The Department of Labor should spend less time adjudicating what motivated someone to leave a job and more time getting them into a new one.
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