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Unemployment Insurance: How It Works And How To Apply

Kate Howard/KYCIR

Over the span of a few days, Kentucky Gov. Andy Beshear issued orders that will grind business in Kentucky to a halt and increase quick access to unemployment benefits.

By 5 p.m. Wednesday, all “public facing” businesses including entertainment, hospitality and recreational facilities, gyms and exercise facilities and hair salons will close their doors. That’s on top of the bars and restaurants that have shuttered or reduced staff as they transitioned to take out and delivery services.

As a result, many in Kentucky have already lost their income source, and many more will in the coming days. Nationwide, nearly 1 in 5 Americans have experienced a layoff or a reduction in hours due to the coronavirus, an NPR/ PBS Newshour/Marist poll found

Unemployment insurance is available for those who have lost their jobs to help ease the burden. 

Beshear announced policy changes aimed at making unemployment insurance more available to people who lose their jobs due to the coronavirus, including waiving the one-week waiting period for receiving benefits and the requirement that recipients prove they are actively looking for work. 

How to apply

To apply for unemployment insurance, visit the Kentucky Career Center’sunemployment benefits page at or call 502-875-0442. But first, check the schedule.

Starting this week, people whose last names start with letters A through I should apply on Wednesday, March 18. 

People with names starting with J through R should apply on Thursday, March 19. 

On Friday, March 20, applications will be open for the rest of the alphabet and people who missed their scheduled days.

Applicants will need to provide a name, social security number, birthday, email and postal address and employment details.

Kentucky’s unemployment insurance provides between$39 and $552 per week, depending on the lost income, for 26 weeks for employees who lose their job through no fault of their own. The Kentucky Center for Economic Policy says this usually comes out to about 45% of a person’s lost wages.

Demand Brings Technical Difficulties, Delays

At a press conference on Tuesday, Deputy Secretary for the Cabinet for Education and Workforce Development Josh Benton said the state’s unemployment insurance program has already seen a spike in applicants this week. On Tuesday alone, the system processed over 9,000 applications, compared to a weekly average of about 2,000.

The increased demand temporarily crashed the program’s application system. But Benton said the cabinet has increased server capacity and repurposed 45 existing staff members to the program to deal with the uptick. 

Benton also announced an alternative application available on the website that will allow people to apply if the server is down and a new schedule meant to help ease the burden on the application system.

“What we want more than anything is anyone who lost their job this week, we want them to be able to file for claims,” Benton said.

Where Kentucky falls short

The biggest problem with unemployment insurance currently,  is that it doesn’t reach everyone who should be eligible for it, according to Dustin Pugel, a senior policy analyst at the Kentucky Center for Economic Policy.

Pugel said only 1 in 5 unemployed people actually receive the unemployment benefits that they paid into through taxes on their wages and taxes paid by their employers.

Unemployment insurance is not available to independent contractors or self-employed, but Pugel says anybody who thinks they might qualify should apply anyway through the Kentucky Career Center website.

“Don’t filter yourself out, let them say yes or no. It’s not going to replace the entirety of your wages but it’s going to let you stay afloat till you get back on your feet,” Pugel said.

Though this isn’t cause for worry in the short-term, Kentucky’s unemployment insurance pool itself is not fully funded.

U.S. Department of Labor data show that Kentucky’s trust fund carries an insolvency rate of 57 percent, meaning it has enough money to cover just over half of the maximum amount of scheduled payments. Only nine states have a lower solvency rate.

That doesn’t mean there won’t be money available for people who need it: states can borrow money from the federal government to pay unemployment insurance once their trust funds are depleted, and Kentucky did during the Great Recession. 

Going forward, experts point to a handful of policy changes Kentucky can take that may help those workers who are out of work or facing reduced hours.

The first is adopting what is called an Alternative Base Period, as 41 other states and U.S. jurisdictions have done. The alternative base period allows more recent earnings to count towards a person’s wage calculations. Currently, the most recent fiscal quarter isn’t counted towards an applicant’s earnings. That’s especially detrimental for seasonal or part-time workers whose wages tend to fluctuate, Pugel of the Kentucky Center for Economic Policy says.

“The folks that are going to experience layoffs first, as we’re already seeing, are folks like that. We’re talking about waiters and people who give haircuts and other types of low-wage work,” Pugel said.

The other change would be adopting a work share policy similar to what 31 other states haveimplemented.

Work share programs allows employers to cut back on hours without laying people off. Instead, the state helps cover lost wages. 

Michelle Evermore, a senior researcher and policy analyst at the National Employment Law Project, said the policy effectively becomes insurance for underemployment, rather than unemployment.

“The employer can go to the state agency and say, ‘I have to lay off 20 percent of workers but what I’d rather do is send everyone home on Fridays,’ and then the agency can pick up the unemployment insurance check for the last day,” Evermore said. “That way, employers can maintain their workforce, and workers get to keep their jobs.”

Federal help on the way?

Congress is expected to pass a coronavirus aid package as early as today that would provide some help for state unemployment insurance programs. 

The legislation provides technical assistance for states that want to set up a work share program during the pandemic. It also provides $1 billion in administrative funds to the state agencies doling out insurance funds. Right now, administrative funding is tied to the previous year’s unemployment rates, which have been at historical lows. As a result, most state unemployment insurance programs are struggling to keep up with administrative costs.

The legislation also would provide interest-free loans to states that exhaust their unemployment insurance trust funds, and pick up the costs of extended unemployment benefits past 26 weeks.

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