With only 64 percent of the U.S. population fully vaccinated, many businesses have instituted COVID-19 vaccine mandates in order to protect their employees during the pandemic. Mandates have often been instituted successfully. There’s little doubt that such mandates have been an important factor in pushing the vaccination effort forward, with 87 percent of Americans over the age of 18 now having received at least one COVID-19 dose despite concerted anti-vaccine messages on social media and many news outlets.

Despite the positive impacts of vaccine mandates, they have been the target of a powerful political and legal backlash. The U.S. Supreme Court, for example, recently blocked Biden’s vaccine-or-test mandate for businesses with 100 or more employees (though the mandate was allowed for health care workers). In response, major corporations such as Starbucks retracted their vaccine mandate policies after the Supreme Court decision. While many companies will continue on their own to mandate vaccination—according to a Kaiser Family Foundation survey in October, one in four workers (25 percent) said their employer had instituted a vaccine requirement—vaccine requirements will continue to be a flashpoint in the world of work.

> See map of State Legislation and Polices Related to Unemployment Benefits and Vaccine Status

Unemployment Benefits and Vaccines: What’s at Stake

Conservative opponents of vaccine mandates have turned to an unlikely avenue—unemployment insurance (UI) benefits—as part of their anti-mandate campaign.

Though UI benefit claims are determined on a case-by-case basis, not complying with a reasonable employee policy (such as a vaccine requirement) is considered misconduct under most state laws, and so a discharged worker wouldn’t be entitled to UI benefits. Workers who are fired for misconduct, such as not following mandated workplace safety procedures, putting themselves or workers at risk by being inebriated at work, or even far less egregious violations (such as being repeatedly late to work), are typically disqualified for receiving UI benefits. Similarly, the vast majority of workers who apply for UI benefits after having quit their job are disqualified for receiving benefits, because they cannot show good cause (such as a hazardous work environment) under state laws. Most states limit good cause to reasons related to work, with limited exceptions such as a serious illness, quitting to follow a spouse who is transferred, or having to quit due to domestic violence. Thus quitting to avoid a mandate would not meet the usual legal standard followed by states, especially if the worker did not have a compelling religious or medical reason for quitting.

Recently, five states—Arkansas, Florida, Iowa, Kansas, and Tennessee—have passed bills extending unemployment benefit eligibility to workers who refuse to comply with employer COVID-19 vaccine mandates, with a sixth, Nebraska, issuing a similar policy through agency guidance. At least fifteen other states are considering similar bills. While there are differences between these bills, they generally include vaccine resistance as an exemption to standard UI rules. Thus, a total of twenty-one states have enacted or are considering policies to allow vaccine refusers to collect state unemployment benefits. In addition, several states would allow those already receiving UI benefits to continue to collect benefits after they refused to take a job at a company with a vaccine mandate.

A total of twenty-one states have enacted or are considering policies to allow vaccine refusers to collect state unemployment benefits.

Under these policies, vaccine refusers without a medical or religious reason would get special treatment, as compared to other unemployment claimants. For example, in Tennessee, a woman who quits her job in order to protect herself and her family from domestic violence would not have the same legal protection as an individual who refuses to get vaccinated. The enactment of these policies in these states is a surprising development, given their prevailing restrictive environment regarding UI policy in general.

Hypocritical Legislation That Is Dangerous to Public Health

The sudden UI generosity of the states that have already passed legislation (or issued an executive action) opening up UI benefits to vaccine refusers is quite a hypocritical turnaround—five of these six states were among the twenty-four states that cut off at least some of the federally funded pandemic benefits prematurely in the summer of 2021. Arkansas, Iowa, Nebraska, and Tennessee at the time had even gone as far as eliminating pandemic unemployment assistance, which provided payments to those who lost a job because they were ill with COVID-19 or had to care for a loved one suffering from COVID-19. These states withdrew support for individuals suffering unemployment directly because of COVID-19, but now suddenly want to provide UI benefits to those who were fired or had to quit because they voluntarily choose to increase the chance of infection for themselves and their coworkers.

Some commentators have argued that the UI program should be open to even those who refuse vaccines, along with others with reasons for quitting their jobs, as part of a drive to make the UI system more administratively streamlined and open. Allowing UI in this case, however, undermines the effectiveness of the vaccine mandates. For example, in New York City, thousands of Department of Education workers rushed to get vaccines ahead of the September 30 deadline, bringing teacher vaccination rates to 96 percent. If such workers feel that they can fall back on unemployment benefits, they may feel less compelled to get vaccinated. The cost of this choice is high. In Texas, for example, unvaccinated individuals have experienced a death rate that is 20 percent higher than those that are vaccinated. Moreover, if the state government has gone out of its way to elevate vaccine refusal as an exception to standard rules, they are essentially encouraging residents to avoid vaccination as a pathway to receiving UI benefits.

Status of Recent Vaccine Mandate–Related Unemployment Legislation

Five states have passed bills that extend unemployment eligibility to those workers who are fired or quit because they refuse to obey a COVID-19 vaccine mandate: Arkansas, Florida, Iowa, Kansas, and Tennessee. A sixth state, Nebraska, issued a Department of Labor Guidance Document that effectively provides the same protection. In Nebraska, an individual “who began work for an employer prior to an employer instituting a COVID-19 vaccine requirement” and is discharged from employment for refusing the mandate would not be disqualified from receiving unemployment as the refusal would not be considered misconduct.

Fifteen more states are considering similar bills. In South Carolina (H3126) and in Indiana (HB1001), bills have recently passed their respective state House of Representatives. In Wyoming (HB1009), a bill has already died in committee. The rest of the twelve states have bills that are either in committee or were recently introduced: Illinois, Minnesota, Mississippi, Missouri, New Hampshire, New York, Oklahoma, Pennsylvania, South Dakota, Virginia, Washington, and Wisconsin. (See Table 1.) Minnesota, New York, Pennsylvania, and Washington stand out as states with Democratic governors, as most states on the list are Republican-led.

Five states are considering related bills that may affect unemployment and so are also included in Table 1. Alaska, Idaho, and Ohio are considering bills that would prohibit discrimination on the basis of vaccine status, with some requiring equal benefits (Alaska) and or privacy over disclosing vaccine status (Ohio). Montana passed HB0702 in March 2021, which made vaccine status a protected class. Massachusetts also differs, as bill HD4443 would allow public employees to take two years of unpaid leave if they refuse to comply with the mandate and return to their job with seniority intact.

State Legislation and Polices Related to Unemployment Benefits and Vaccine Status, as of January 28, 2022


UI Protection for Vaccine Status

Bill Number

Alaska Related Bill (considering) HB 175
Arkansas Bill Passed SB739
Florida Bill Passed HB 1B
Idaho Related Bill (considering) HB 140
Illinois Considering HB5119
Indiana Considering HB 1001
Iowa Bill Passed IA HF902
Kansas Bill Passed HB 2001
Massachusetts Related HD4443
Minnesota Considering HF2843
Mississippi Considering SB2368
Missouri Considering HB2055
Montana Related Bill (passed) HB0702
Nebraska Guidance Issued NDOL Guidance Document
New Hampshire Considering HB1377
New York Considering S7403
Ohio Related Bill (considering) HB411
Oklahoma Considering SB1157
Pennsylvania Considering SB986
South Carolina Considering HB3126
South Dakota Considering HB1224
Tennessee Bill Passed HB9077
Virginia Considering HB1201
Washington Considering SB5864
Wisconsin Considering SB547
Wyoming Considering (bill died) HB1009
Source: Compiled by the authors as research for The Century Foundation.

Employers Will Pay the Price for Unemployment Benefits for Anti-Vaccine Workers

Unemployment insurance is a self-financing program, paid exclusively by employer taxes in all but the three states that have small employee contributions (Alaska, Pennsylvania, and New Jersey). That means that any unemployment benefit expenses accruing due to payouts to unemployed workers who refuse to get vaccinated will lead to higher unemployment taxes levied on the entire business community. In most cases, unemployment benefits are charged back to the discharged individual’s most recent employer. However, exceptions are made in cases where the worker was not separated due to an employer action, such as a voluntary quit with good cause. Thus, we might expect that in many cases, in states that have protected workers who refuse the vaccine, when these discharged workers get unemployment benefits, it would be classified as what is known as a social charge. These costs of these social charges are then recouped through across-the-board UI tax increases on all UI participating businesses. For this reason, the state chamber of commerce opposed the relevant UI legislation in Indiana, worried about the impact on the state’s UI trust fund and employer taxes.

Indiana is the state that perhaps best indicates what is truly behind UI legislation that protects vaccine refusers. Policymakers in Indiana went out of their way to propose using unemployment insurance benefits policy to penalize specifically those employers who issue a vaccine mandate. The Indiana law mandates that any benefits paid out to vaccine refusers are charged directly to the employers whose mandate led to a discharge from work, and thus lead to an increase in that company’s taxes. The bill’s authors explicitly intended that as a punishment for employers who have put a mandate in place, as part of the overall intent of weakening private employer mandates.

Policymakers in Indiana went out of their way to propose using unemployment insurance benefits policy to penalize specifically those employers who issue a vaccine mandate.

It’s hard to estimate what the actual cost of these state laws will be to businesses. On the one hand, more than a third (37 percent) of unvaccinated workers (5 percent of adults overall) say they would leave their job if their employer required them to get a vaccine or get tested weekly. Furthermore, the U.S. Supreme Court’s decision to invalidate the Biden’s administration’s rule will give employers room to maneuver and thus limit the number of new workers subject to a vaccine mandate. But despite some declarations of widespread vaccine refusal among the workforce, most of the mandates implemented resulted in relatively few workers risking their careers by forgoing vaccines that have been authorized by the Food and Drug Administration and safely taken by millions of Americans. Furthermore, three of the states that have recently passed laws preserving UI benefits for vaccine-refusers offer particularly low unemployment benefit amounts—Arkansas ($275), Tennessee ($235), and Florida ($243)—and so their total costs might be low. Also, at a time of a low overall unemployment rate, many of those who quit a job because of a vaccine mandate are likely to find a new job at an employer without a mandate before they collect much in unemployment benefits. So the policies being enacted seem, at least at this point, about sending a political message rather than delivering additional benefits to large numbers of residents. Sadly, though, in endorsing vaccine refusal, these policies also undermine public health and work toward making the pandemic all that much more lethal.

Looking Ahead

Unemployment benefits are provided to individuals who are involuntarily unemployed. Deciding—absent a qualifying reason, such as religion—to refuse a vaccination meant to protect not only a worker but their coworkers and customers falls far short of a core standard of the unemployment program. The twenty-one states who have enacted or are considering enacting policies to allow benefits in these cases appear to be acting out of a general resistance to vaccine mandates, rather than sound unemployment policy.