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US State employees work less, get paid more under federal coronavirus relief plan

13:55  31 may  2020
13:55  31 may  2020 Source:   freep.com

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Roughly half of all U.S. workers stand to earn more in unemployment benefits than they did at their jobs before the coronavirus pandemic shut down wide swaths of the U.S. economy, a result of government relief that employers say is complicating plans to reopen businesses.

Under the plan , these state programs now cover far more people than are usually eligible, including self- employed people and part-time workers . The plan also makes exceptions for people who cannot work for a variety of coronavirus -related reasons — and you don’t necessarily need to lose your job

LANSING – Thousands of State of Michigan employees are getting three-day weekends and ending up with more money in their pockets as a result, officials confirm.

It's a quirk of the $2-trillion coronavirus rescue package that Congress approved in March.

The Coronavirus Aid, Relief and Economic Security Act provides an extra $600 a week in federal money for eligible workers who have their hours reduced by their employers.

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But because Congress did not prorate the benefit, workers get the same $600 payment — on top of whatever regular unemployment benefits they are eligible to receive — whether their weekly hours are reduced by 40 hours, eight hours, or even less.

And it isn't just state employees who are eligible for the payments under work-share programs approved by the U.S. Department of Labor. Plenty of private employees are eligible, too.

But state employees quickly and clearly became Michigan's most high-profile beneficiaries of the program when it was announced that starting May 17 and continuing through July 25, some 31,000 state employees would be furloughed one day a week. Many employees are taking their furlough days on Friday or Monday, providing a three-day weekend.

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If the state instead reduced employees' monthly hours a similar amount by concentrating each employee's four or five furlough days in a single week, the cost to the federal government would be significantly reduced.

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Tiffany Brown, a spokeswoman for Gov. Gretchen Whitmer, said the furlough plan will save the state $80 million. She confirmed it will also provide a financial windfall for many employees, even those who are relatively well-paid.

State workers earning $50,000 a year would lose about $385 in wages for each two-week pay period, which would be reduced to a loss of about $241 through regular unemployment benefits, Brown said. Add in the $1,200 in federal payments ($600 times two weeks), and the employee comes out about $959 ahead — or about $480 a week.

"State employees have families to support just as anyone else whose work has been impacted," Brown said.

While saving the state $80 million in over a little more than two months, it is costing the federal government $18.6 million a week for state employees alone. If the program was prorated, and state employees received only $120 (one-fifth of $600), the weekly cost would be $3.7 million, or nearly $15 million less.

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Almost nobody is blaming state workers for taking advantage of a program provided for in federal law. And the state itself needs all the budget help it can get. It faces a projected $3-billion deficit in the fiscal year that ends Sept. 30, and that budget hole is projected at closer to $7 billion when next year is included.

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"The state is exploiting the federal unemployment insurance bonus," James Hohman, director of fiscal policy for the free enterprise-oriented Mackinac Center for Public Policy, said.

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The program "was intended to provide relief to unemployed workers suffering in the pandemic, not to provide a salary boost to state workers," Hohman said.

"This is an issue for Congress, though, who structured the program this way," Hohman said. "They should look at prorating benefits just as the state does with its unemployment checks for workers in the work-share program."

Congress is working on another coronavirus rescue package, but it is not clear whether the $600 payments will be extended — or amended.

Federal officials were not saying much Friday.

The U.S. Department of Labor did not respond to an email and phone call about the program. Nor did the Free Press get responses from the offices of Michigan's two Democratic U.S. senators, Debbie Stabenow and Gary Peters.

State Rep. Sue Allor, R-Wolverine, a member of the House Appropriations Committee, said Congress should have crafted the program in such a way that workers could not get more on unemployment than they were making when working.

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She said she does not begrudge state employees taking the extra money, but there are so many needs during the pandemic that lawmakers have a responsibility to make sure all funds — whether they are state or federal — are spent wisely.

In her district, for example, schools need the money badly, Allor said.

"With what is happening in the state of Michigan, we, of all people, should be doing what we can to cut costs and tighten the belts," she said. "I don't think this is a good example of trying to tighten the belts."

But what is the state supposed to do, asked Sen. Curtis Hertel, D-East Lansing, the vice chairman of the Senate Appropriations Committee whose district includes thousands of state employees.

"The federal money was available and they set the rules, and this is what the rules are," Hertel said. "So, I don't know why state employees would be treated any differently; I don't think we could treat state employees differently than anyone else."

Hertel said the furloughs do not reduce the amount of work each state employee has to do. While they may be locked out of their laptops for one furlough day a week, many are putting in extra hours during evenings and weekends — without extra pay — during the pandemic, Hertel said.

Similarly, many have complained about state employees being automatically enrolled with the Michigan Unemployment Insurance Agency, while hundreds of thousands of Michiganders struggle with the agency's website and always jammed phone lines, Hertel noted.

But the same automatic enrollment is available to other Michigan employers large and small, and Ford and GM have made use of it when they closed plants in the past, he said. If the state had not used the automatic enrollment for state employees, the website and phone lines would be even more clogged than they already are, he said.

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Brian Calley, president of the Small Business Association of Michigan, said the work-share program is extremely valuable to small employers because it allows them to retain their skilled employees when they are forced to scale back, rather than imposing full layoffs and risking losing those workers entirely. Instead of laying off 50% of their workers, employers can instead cut everyone's hours by 50% and use the federal program to make up the difference, he said.

Calley said he thinks relatively few employers would be reducing hours by as little as 20%, as the state has done.

The growing federal deficit is a concern, but the crisis caused by COVID-19 is so unprecedented that "I would rather they overdo it than under-do it," he said.

Contact Paul Egan: 517-372-8660 or pegan@freepress.com. Follow him on Twitter @paulegan4Read more on Michigan politics and sign up for our elections newsletter.  

This article originally appeared on Detroit Free Press: State employees work less, get paid more under federal coronavirus relief plan

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