matt darling is an Employment Policy Fellow at the Niskanen Center in Washington, where he works on labor market policy issues.
Published February 10, 2022
A recent report in Axios highlights a surprising development in unemployment insurance policy. Several red-leaning states (including Florida, Iowa, Kansas and Tennessee) are revising their eligibility criteria to allow people to quit their jobs and collect benefits rather than obey their employers’ Covid-19 vaccine mandates. And while the numbers of workers affected is much reduced after the Supreme Court shot down a Biden administration initiative that would have require employers with a hundred employees to mandate vaccination or weekly testing, the extension of insurance will potentially affect thousands who quit because their employers are imposing their own mandates without the federal requirement.
As you probably know, workers who quit (as opposed to being laid off) are generally not eligible for state unemployment benefits. But so far, relatively few people appear to have left jobs because their employers have introduced vaccine mandates. For example, after the New York City Police Department imposed the mandate, only 90 out of 35,000 officers left — not bad in a labor market in which an average of 3 percent of workers quit for various reasons every month.
Given these numbers, opening UI eligibility to the vaccine-averse is unlikely to materially change the supply of labor or the financial health of state UI funds. But that’s not why the policy change is raising eyebrows — and voices. It mainly reflects the wish of Republican governors and legislatures to signal their opposition to the Biden administration’s drive to persuade Americans to get vaccinated. However, the political tempest does touch a vexing and much broader issue dogging unemployment insurance.
The Distinction Between Quitting and Being Fired Is Not Real
Allowing people who refuse to meet employers’ requirements to vaccinate to collect unemployment benefits reflects a reality that often goes unacknowledged in policymaking. Specifically, there isn’t a bright line between “quitting” and “firing.”
While some elements of work are contractually defined (most obviously, wages), employers have control over a range of job conditions. They can change your hours, the location of your office — and, very relevant these days, whether you may work remotely. Employers can effectively force employees to “quit” at their discretion by exercising these powers.
The Department of Labor thus faces difficulties deciding why a given worker left an employer. For example, suppose an employee quits two weeks after their employer imposes a vaccination mandate. There’s no way the Department of Labor can determine whether they quit because they didn’t want the jab or whether it’s a convenient excuse to collect unemployment insurance in a state that’s opened the loophole.
I am sure that in the world most of us would prefer to live in, the Department of Labor would spend less time adjudicating what motivates workers to leave jobs and more time getting them into new ones.
Beyond Vaccine Mandates
This is not the first time policymakers have opened unemployment benefits to a group that would otherwise be denied. The Biden and Trump administrations instructed states to allow anyone who quit their job because of Covid-19 risk to receive the benefits. However, the impact of this policy is unclear. Iowa, for example, classified workers who refused to return to work after recall from a Covid-19 lockdown as “voluntary quits,” making them ineligible for benefits.
Beyond the pandemic, there’s widespread agreement that many other people should receive unemployment insurance, but fall through the cracks because the rules are unclear. For example, 39 states have laws that make victims of domestic violence, sexual assault or stalking eligible for UI. Victims often have to leave their jobs — either because injuries cause them to miss work or because the perpetrator knows their workplace and can use this knowledge to stalk them.
While the steps these states have taken to open unemployment benefits to victims of domestic violence are laudable, processing the claims remains difficult. For example, Vermont asks them to submit documentation of their claims (such as court records) and to exhaust all available options (such as relocating to a shelter or getting a protection order) before applying for unemployment insurance — a high bar to meet during a crisis. Administrative burdens like this often mean that increased eligibility is only theoretical.
UI Without the Guesswork
No matter the source — vaccine mandates, coronavirus health risks or domestic violence — creating exceptions to allow new groups of workers to access UI leads to hard-to-administer exclusion criteria. What’s more, piling on exceptions, however legitimate, decreases the operational efficiency of the benefit system.
A better approach would be for UI to focus less on the cause of the work separation, providing unemployment benefits under conditions that are well-defined and relatively simple for the Department of Labor to assess. In my view, this means eligibility after any separation event — no matter who initiated it or whatever the underlying reason. Along with finessing the Solomonesque task of figuring out who caused the separation, this change would mean faster processing times and less paperwork.
Yes, you’re wondering whether this would lead to more opportunities to game unemployment. And yes, it probably would lead to more claims for benefits and higher costs to the UI system. Which are good reasons why the change should not happen in isolation. It should be part of broader reforms that reconnect workers with jobs and get them back into the labor market.
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A perfect system is elusive. But I am sure that in the world most of us would prefer to live in, the Department of Labor would spend less time adjudicating what motivates workers to leave jobs and more time getting them into new ones.