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Treasury Secretary Steven Mnuchin warned on Tuesday that individuals who reject an offer from their company to return to work after being laid off due to coronavirus are no longer considered eligible to receive federal unemployment benefits.
Mnuchin said that companies receiving benefits under the Payroll Protection Program who are inviting employees who had been laid off or furloughed due to the coronavirus crisis to return to work should plan to notify state unemployment offices of their offers.
If the employee, in turn, turns down the job, they would then be considered ineligible to receive expanded unemployment benefits.
“If you offer a person a job..and that person does not take the job..then that person would not be allowed to get unemployment,” Mnuchin said Tuesday.
Mnuchin’s comments come as Republican lawmakers have ramped up warnings that the recent boost in jobless benefits amid COVID-19 will “push unemployment higher,” as many individuals are able to collect more money through the unemployment programs than they made while on the job.
Under the “Phase 3” economic stimulus package passed in March, also known as the CARES Act, Congress provided $250 billion to extend unemployment insurance to more workers, and lengthen the duration to 39 weeks, up from the normal 26 weeks. The provision allowed for an extra $600 to be provided a week for four months to those losing their jobs amid the crisis.
The Wall Street Journal reported last month that about half of U.S. workers can earn more with these jobless benefits than they did while working -- a factor that could hurt efforts by some businesses to reopen.
The CARES Act included a new “Pandemic Unemployment Assistance” program, which extends unemployment benefits to self-employed, independent contractors, those with limited work history, and other individuals not traditionally eligible for unemployment benefits who are unable to work as a direct result of COVID-19.
The stimulus package also provided an additional 13 weeks of unemployment compensation to individuals who have exhausted their regular unemployment benefits, as well as a supplemental payment of $600 per week for up to four months.
The average state already gives out $463 per week in unemployment benefits. When combined with the new $600 per week, the average unemployed individual can collect $1,063 per week—the equivalent of more than $26 an hour, or $55,000 per year.
Unemployment benefits traditionally require a worker to be laid off to collect benefits, and so many people are not yet aware that the relief bill allows a person to quit and still collect as long as they “self-certify” that they had to quit because of the coronavirus situation. The relief bill says that staying home to be the primary caretaker of children who are out of school counts as one automatically valid reason.
And while traditional unemployment benefits pay out based on an employee’s previous income, the new benefits pay a flat $600 extra per week even if a worker’s previous job paid less.
The generous payments are temporary, however. They are scheduled to last for four months, ending July 31.
But Democrats included an extension to that date in their “Phase 4” legislation which passed last week. The bill extends unemployment benefits of $600 payments, in addition to state benefits, through January 2021.
Meanwhile, the inspector general for the Department of Labor said last month that it had “significant concerns” about the “unprecedented demand” for unemployment benefits amid the crisis, highlighting issues related to state preparedness and the risk of fraud among those receiving relief.
The inspector general noted that the risk of fraud and improper payments is “even higher” under the new Pandemic Unemployment Assistance program because claimants “can self-certify” their unemployment qualifications. The inspector general urged the Department of Labor to establish methods to detect fraud and recover those improper payments.
Fox Business' Edward Lawrence contributed to this report.