The Century Foundation has projected that as a result of the end of federal child care stabilization funding, more than 3 million children could lose their child care. Many parents will be forced to shift or cut their work hours, or even leave the workforce altogether to care for their children, because alternative options will be challenging to find. Parents and other caregivers should know what their options are, including whether they can get unemployment insurance (UI) if they are forced to leave their jobs because of a loss of or lack of child care.
Some states cover job loss due to caregiving needs, which can be an avenue for accessing UI for parents in that situation. However, in the majority of states, claimants will not be eligible for a variety of reasons, including the “able and available to work” requirement and the “good cause” requirement. Here are some key facts to know as parents consider their options.
“Able and Available to Work”
UI claimants must demonstrate both in their initial application and on a weekly basis that they lost work through no fault of their own and are “able to work, available to work, and actively seeking work.” Parents and other caregivers who are not able and available, or are actively seeking work because they do not have child care, will clearly not meet that requirement. Some state laws do include caregiving exceptions. However, the caregiving covered under state law may cover situations, such as a shift change at work, that render it impossible to find child care if the caregiver could accept work during the hours they worked previously. Also, many states have caveats in their UI laws about when employees can quit for caregiving reasons. These can often be onerous for workers. For example, some require workers to seek alternative work arrangements with their employer, or to prove that they have exhausted all other alternatives before leaving employment.
In addition, claimants are only eligible for UI if they quit their jobs with good cause. The reasons for which workers can voluntarily leave work and have it counted as “good cause” can generally be divided into two categories: work-related and personal. In several states, claimants can apply for benefits if they lost work due to caregiving issues, but those rules differ widely across states. In any case, claimants must be actively looking for and able to accept work (see Figure 1).
Some caregivers will reduce their work hours and go from full-time to part-time work due to their newfound caretaking obligations. Two UI issues come into play here: being able to qualify while only looking for part-time work, and meeting financial requirements. Another hurdle exists for caregivers who have been working full-time but may need to seek part-time work going forward. While many (but not all) states will pay UI to claimants only seeking part-time work, they are usually only allowed to seek part-time work if their prior position was part-time (see Table 5-13 of this Department of Labor explainer). State laws must recognize that caregiving responsibilities may alter someone’s life to the point that they might need to seek less than full-time employment.
State laws must recognize that caregiving responsibilities may alter someone’s life to the point that they might need to seek less than full-time employment.
Another consideration is that to qualify for UI benefits, workers must have earned enough money in their “base period.” This is a one-year time period which usually includes earnings from a few months in the previous year (i.e. if your claim is for January, your base period looks at the twelve months ending on September 30 the previous year), but if a person is not eligible using the standard time-frame, many states allow for an alternate period that includes more recent earnings. Most states also require a minimum earnings amount in the highest calendar quarter (three-month period) of that year. The amount of money claimants must have earned to qualify for UI can be found in Table 3-2 of this Department of Labor document.
Modernizing UI to Meet Caregiving Needs
Especially in the wake of the COVID-19 pandemic, there is much more awareness and understanding for families dealing with the loss of child care. For example, New York State improved its access to UI for caregivers during the pandemic, and this policy remains in place. Other states can follow suit, making it clear that loss of regular child care is a “good cause” for quitting a job and waiving the “able and available to work” requirement in those cases.
As part of these changes, states should also consider updating “experience rating” policies. To have a UI system that conforms to federal law, a state must have a system that charges employers a higher tax rate depending on how many of their former employees have collected UI. This leads employers to challenge UI receipt for workers in various situations. Taxing an employer when the worker quits for reasons not connected to that employer is also unfair. Many states do not charge employers for certain personal cause separations, and it is advisable to exclude these benefits from counting against employers when seeking legislation to cover caregiving.
Taxing an employer when the worker quits for reasons not connected to that employer is also unfair.
To modernize state UI programs to meet the needs of caregivers who lose child care, amended UI policies need to do the following:
- Be flexible on “able and available” requirements. Allow as much flexibility as possible on “able and available” and work search requirements. For example, it must allow caregivers to seek part-time work if necessary.
- Broaden “good cause” caregiving definitions. Explicitly state all of the reasons a caregiver may have for losing work, rather than limiting caregiving to a shift change or requiring claimants to demonstrate a family hardship.
- Adjust experience rating. Exempt employers from paying more in state unemployment taxes when caregivers need to quit to care for loved ones.
- Invest in outreach. Require that the states create an outreach plan to ensure that caregivers who lose work know their rights.
This commentary is meant to provide a quick overview about access to unemployment options for caregivers and policymakers. For more in-depth examinations of this issue, here are a few recommended resources: