4 Steps to Fix Florida’s Broken Unemployment Insurance Program

Although COVID-19 put Florida's Reemployment Assistance (RA) program — commonly referred to as Unemployment Insurance, or UI — into the spotlight, the program has been broken for years. For over a decade Florida’s approach to UI has been based on reducing costs of the program, instead of providing an adequate benefit for unemployed Floridians.

The tipping point for UI in Florida came in 2011, when the program was significantly scaled back by the state Legislature, leaving workers and Florida drastically unprepared for an economic crisis. Even the renaming of the program to “Reemployment Assistance” was rooted in a misguided belief that unemployed Floridians do not deserve assistance during economically difficult times. As a result, on almost every indicator of a robust program, Florida’s UI program ranks at or near the bottom.

In fact, Florida’s recipiency rate, which looks at the proportion of jobless workers who actually receive benefits, is the worst in the entire country. 

This particularly disadvantages Floridians of color, who have an unemployment rate roughly twice that of other workers. Florida’s UI program should be driven by measures that protect unemployed workers and the economy, not by measures that reduce program costs at the expense of workers who are trying to provide for their families. 

To permanently address this problem and put Florida workers first, the Legislature should: 

1. Increase payment amounts.

Florida’s UI benefit levels are among the lowest in the country. This is because Florida both limits the amount of UI assistance that unemployed workers can receive to $275 a week and restricts UI assistance to only 25 percent of the total wages in a worker’s base period — not to exceed $6,325 in a benefit year. But not everyone gets the maximum. On average, most workers in Florida only receive about $254 a week, which is not enough to pay rent and utilities, much less to meet a family’s other basic needs like food, transportation, and childcare while the breadwinner finds another job. Florida should increase its maximum weekly benefit rate and reform the formula it uses to restrict the amount of assistance that a worker can receive.

“Please....I’m begging you for help. Please get unemployment increased. 125 weekly is so poor. Please, Governor DeSantis." -Wendy C. in Holly Hill

2. Increase duration of payments.

Florida should increase the minimum duration of benefits to 26 weeks and eliminate the formula that ties receipt of benefits to statewide unemployment figures. Until  2011, Florida provided up to 26 weeks of UI assistance for unemployed Floridians. The state decreased the duration of benefits to a maximum of 12 weeks of UI if the state’s average unemployment rate is at or below 5 percent, regardless of whether workers are able to find employment in their own community within those 12 weeks.  This puts Florida 40th in the country for the average number of weeks that workers get benefits and limits the ability of the state to respond to the needs of out-of-work Floridians in counties that may have higher than average unemployment rates. Florida should increase the minimum duration of UI to 26 weeks, and eliminate the formula tying benefits to unemployment rates.

“There are still people unemployed and in need of financial help.” - Keri S. in Holiday

3. Increase program reach and impact.

Florida’s UI recipiency rate, which measures the proportion of jobless workers who get benefits, is the worst in the entire country.  Florida should increase the percentage of eligible people actually receiving UI benefits (8.9 percent) to ensure that eligible workers are receiving the benefits they deserve. Barriers to receiving benefits, like a broken online system and pointless red tape that trip up applicants, must be eliminated.

“It took months to get unemployment payments. Wasn't able to receive food assistance until after I'd become homeless.” - Jared S. in Ocoee
  • Abolish the requirement that UI recipients contact five employers per week. Excessive and unnecessary administrative hurdles to receipt of benefits, such as mandating that workers document five employer contacts a week, make it difficult for the state to quickly provide relief to workers during recessions or crises such as the pandemic. In addition, this mandate disadvantages low-wage workers, whose job searches are more likely to occur in person, by forcing them to pay for gas or public transportation out of pocket at a time when they are least able to shoulder the additional cost.
“The unemployment site sucks. Every time you try to upload proof of wages an ERROR occurs and kicks you off so people are forever stuck with a $0 monetary status because we can't show proof.” -Kaila J. in Sebring 
  • Fix the CONNECT system. Florida’s online UI system, called CONNECT, is antiquated and inadequate for filing claims in times of low unemployment, much less when Florida experiences an unexpected influx of new applications during a recession or crisis such as COVID-19. Making CONNECT work in good times and in bad should be a priority for the state.  
  • Allow claimants to continue to file claims both electronically and by paper after the pandemic is over. Not all Floridians have access to technology to file UI claims electronically. Ensuring access for all claimants, regardless of the barriers they may have to filing their UI claim electronically, is a critical step in reforming RA.
  • Repeal bi-weekly reporting. Until CONNECT is updated to operate reliably and quickly, claimants should not be forced to request benefits every two weeks to continue to receive UI.
  • Permanently repeal the wait week. Claimants have to wait a week before they are able to start getting UI assistance (the “wait week”) and Florida does not pay them for that week even if the claimant satisfies all eligibility requirements. Wait weeks are archaic limitations on receipt of assistance that were adopted when states still processed UI claims manually and needed time to pay new claims. Florida now has electronic access to wage information and can pay UI benefits for the first week of unemployment without delay.
  • Expand the definition of “good cause”. Fairness demands flexibility to ensure that Floridians who miss reporting deadlines, or leave or refuse work due to health and safety concerns or to care for a family member or partner, have the ability to claim good cause without suffering loss of benefits.  
  • Reduce the monetary eligibility requirement of $3,400 total wages in the base period. In Florida, the base period for UI is the first four of the last five completed quarters preceding the first day of a claimant’s benefit year. Because that $3,400 must have been earned recently to qualify as a wage credit, claimants who either have been unemployed for a long time or did not make much money are likely ineligible for UI.
  • Adopt an alternative base period.  Eligibility for UI in Florida is contingent on  a worker having adequate earnings in the  base period  without consideration of earnings from the most recent calendar quarter.  Although the state may have needed to consider only older quarters of work in the past when it was unable to access earnings records electronically, no good reason exists to continue to exclude more recent earnings.  Using an alternative base period (ABP) that looks at  the most recent quarter of work is now technologically feasible and would allow more breadwinners who have lost jobs to qualify for UI, including low-wage, seasonal workers and workers with inconsistent work schedules. Florida is one of a minority of states that have not adopted an alternative base period. 
  • Allow benefits to be paid retroactive to the date of job loss. Currently, eligibility for UI benefits is retroactive to the date of application, which disadvantages workers whose first priority after losing a job is to look for work — instead of to file for benefits — as well as those who are experiencing difficulty applying.  
  • Don’t require repayment of  overpayments in cases of “equity and good conscience.” Workers should not be penalized for accidental state overpayments when fairness demands otherwise. The state should consider the claimant’s health and earning capacity, their number of dependents, family income, and expenses.
  • Level the playing field between different industries. All workers should have the protections offered by UI.  Florida should do away with exemptions or special criteria for employers that puts their workers at a disadvantage.

4. Fully fund Florida’s UI system.

Businesses in Florida pay the lowest unemployment insurance tax per employee, by far. In order to offer the type of UI system that will buoy unemployed workers and prevent economic catastrophe in times of recession, Florida needs to take steps to fully fund its UI system.

  • Increase the taxable wage base. All states have unemployment benefit plans complying with Federal legislation. Employee taxable wage bases range from $7,000 in Arizona, California, Florida, Puerto Rico, and Tennessee to $52,700 for Washington, with the average taxable wage base being $18,158. In order to offer the type of UI system that will buoy unemployed workers and prevent economic catastrophe in times of recession, Florida should increase the taxable wage base to at least $10,000 to bring the state closer to the national average.
  • Increase the Unemployment Assistance Tax rate. On average, businesses in Florida contribute the lowest tax amount per covered employee in the country. The average nationwide per-employee tax contribution is $277, while Florida businesses only pay an average of $50. Florida’s average tax rate is approximately 0.65 percent of taxable wages — in comparison, Pennsylvania has the highest average employer tax rate, set at 4.88 percent of taxable wage — and it is not enough to adequately finance benefits in the state. To date, Florida and 10 other states, as well as Puerto Rico, have fixed the maximum UI tax rate at 5.4 percent, which is the lowest tax rate states can set under federal law without affecting their employers' tax credits. To fully fund Florida’s UI system, Florida ought to at least increase its rate parameters to reflect states of similar size like California, Texas, and Georgia. Among the nine most populous states (excluding Florida) the average minimum rate is 0.56 and the average maximum rate is 7.42.  
  • Fully utilize the funds in the Unemployment Compensation Benefits Trust Fund and invest in the UI program. As of January 1, 2020, Florida’s UI Trust Fund balance sat just over $4 billion. It had earned nearly $100 million in interest the previous year, and the state had no outstanding obligations. Yet, the state also offered an average weekly benefit of $251 (compared to the national average of ($369) and covered an average of nine weeks (compared to the 15 week national average), making it one of the worst ranking UI programs. Even after the pandemic-fueled economic crisis of the last seven months, the UI trust fund still had $1.4 billion as of early October 2020. In comparison, the states of California, Texas, New York, Illinois, and New Jersey have exhausted their trust funds in an effort to help their unemployed residents and are borrowing from the federal trust fund as is standard process in a significant economic downturn. The Legislature should draw down the trust fund as needed to address the economic needs of Florida’s unemployed residents rather than leave funds untouched for political reasons and ensure that interest earned directly boosts the state’s UI program.

Karen Woodall is executive director of Florida Center for Fiscal and Economic Policy and director of the Florida People's Advocacy Center.

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