Governor Greg Abbott today informed the U.S. Department of Labor that Texas will opt out of further federal unemployment compensation related to the COVID-19 pandemic, effective June 26, 2021. This includes the $300 weekly unemployment supplement from the Federal Pandemic Unemployment Compensation program.
“The Texas economy is booming and employers are hiring in communities throughout the state,” said Governor Abbott. “According to the Texas Workforce Commission, the number of job openings in Texas is almost identical to the number of Texans who are receiving unemployment benefits. That assessment does not include the voluminous jobs that typically are not listed, like construction and restaurant jobs. In fact, there are nearly 60 percent more jobs open (and listed) in Texas today than there was in February 2020, the month before the Pandemic hit Texas.”
The current job openings are good-paying jobs. According to the Texas Workforce Commission (TWC), nearly 45 percent of posted jobs offer wages greater than $15.50 per hour. Approximately 76 percent pay more than $11.50 per hour. Only 2 percent of posted jobs pay around the minimum wage.
At this stage of opening the state 100 percent, the focus must be on helping unemployed Texans connect with the more than a million job openings, rather than paying unemployment benefits to remain off the employment rolls.
Another reason why today’s action is needed is the high level of fraudulent unemployment claims being filed. Fraudulent unemployment claims rob taxpayer money and do nothing to help the unemployed. TWC estimates that nearly 18 percent of all claims for unemployment benefits during the pandemic are confirmed or suspected to be fraudulent, which totals more than 800,000 claims, worth as much as $10.4 billion if all claims had been paid.
Federal law requires the effective date of this change to be at least 30 days after notification is provided to the Secretary of Labor. As a result, the effective date will be June 26, 2021.