As of July 2021, American businesses are finally opening up after a tumultuous last year.
But they’re having a hard time filling open positions.
Many employers and politicians feel that federal unemployment benefits discourage people from getting back to work. As a result, many US states have already pulled out of the program.
Instead, they offer a return to work bonus to encourage residents to re-enter the workforce.
In this article, we’ll cover what a return to work bonus is, the eleven US states offering it, and address some FAQs about America’s labor shortage.
This article contains:
(Click on the links to jump to a specific section.)
- What is a Return to Work Bonus?
- 11 US States Offering a Return to Work Bonus
- 4 FAQs About America’s Labor Shortage
Let’s get started.
What is a return to work bonus?
A return to work bonus is a one-time cash incentive from the state government to American jobless workers. The aim is to persuade them to seek employment and help grow the economy.
Why?
The Department of Labor estimates about 9.5 million Americans lost their jobs because of the pandemic. While the US economy shows promising signs of recovery, local businesses are struggling to find eligible workers.
The April 2021 jobs report by the US Chamber of Commerce showed over 9.3 million job openings — a staggering one million increase from March 2021.
Many GOP lawmakers (Republican lawmakers) believe the $300/week federal supplement contributes to this labor shortage, and cutting it off is the solution.
As a result, 23 states have now ended enhanced unemployment benefits before the federal cut-off date, September 6, 2021. Instead, they’ve brought back pre-pandemic work search requirements for unemployment insurance.
Note: Indiana and Maryland had discontinued the federal unemployment program, but state courts ordered both to restart benefits.
However, eleven states have implemented a financial back-to-work program instead.
11 US states offering a return to work bonus
Let’s look at the eleven American states offering a work incentive to unemployed workers.
Note: these bonuses technically fall under unemployment benefits. As such, they’re considered taxable income.
1. Arizona
On May 13, 2021, Governor Ducey announced that Arizona would no longer offer the Federal Pandemic Unemployment Compensation (FPUC) benefit, starting July 10, 2021.
Instead, the state plans to use $300 million in federal funds for their Back to Work Program.
Arizona residents returning to full-time work will receive a one-time $2000 bonus, whereas returning part-time employees will receive a $1000 bonus.
Employees will have to fulfill the following criteria:
- Return to work between May 13, 2021, and September 6, 2021, and no longer receive federal or state unemployment benefits.
- Work at least 320 hours (full-time) or 160 hours (part-time) over a ten-week consecutive period.
- Filed or received unemployment benefits before May 15, 2021.
- Earn $25/hour or less (Arizona minimum wage is $12.15/hour).
Under these conditions, returning employees will receive this one-time cash benefit after 2.5 months of work and on a first-come-first-serve basis.
2. Colorado
On May 19, 2021, Governor Jared Polis announced the Colorado Jumpstart Initiative.
Under this initiative, Colorado residents who returned to full-time work in May will receive $1600, while those who returned to work in June will receive $1200.
Claimants will also have to meet the following criteria:
- Successfully verify their identity.
- Must be certified for at least one week of Pandemic Emergency Unemployment Compensation (PEUC) or regular state unemployment benefits between March 28, 2021, and May 16, 2021, for a $25 weekly minimum benefit.
- Return to work between May 16, 2021, and June 26, 2021.
- Maintain employment for at least eight weeks.
- Not file for unemployment benefits during this time.
Returning employees will become eligible for the first half of the cash incentive after roughly four weeks of employment and eligible for the second half after roughly eight weeks.
3. Connecticut
Governor Ned Lamont announced the Back to Work CT Program on May 17, 2021.
Under this program, the state will give a one-time $1000 bonus to 10,000 long-term unemployed people.
Eligible candidates must:
- Have filed an unemployment claim during the week of May 23 – 29, 2021.
- Have filed for weekly state unemployment benefits for eleven weeks between December 27, 2020, and May 22, 2021.
- Find a full-time job and remain employed for eight weeks consecutively before the end of 2021.
- Not file for unemployment insurance (UI) during their employment period.
- File an application with the Department of Revenue Services.
Connecticut is one of the few states continuing the $300 weekly federal unemployment benefits along with a return to work bonus.
4. Kentucky
Created by Gov. Andy Beshear, the Team Kentucky Back to Work (BTW) Incentive is a one-time $1500 payment to unemployed workers who entered the workforce between June 24, 2021, and July 30, 2021.
The program will use the leftover $22.5 million funds from the 2020 Coronavirus Aid, Relief, and Economic Security (CARES) Act.
Kentuckians must meet the following eligibility criteria:
- Have an active unemployment claim and requested weekly payments before June 23, 2021.
- Not have a job recall date.
- Start a new qualifying job between June 24, 2021, and July 30, 2021.
- Work at least 120 hours in five consecutive weeks.
- Verify eligibility between August 2, 2021, and October 1, 2021.
Eligible residents can start sending their applications beginning August 2, 2021.
The Public Protection Cabinet will process these applications and award bonuses on a first-come-first-serve basis to 15,000 individuals.
Unemployed Kentucky residents will continue to receive the weekly $300 enhanced unemployment benefits till September 6, 2021.
5. Maine
Continuing weekly federal unemployment benefits, Gov. Janet Mills’ administration announced Maine’s Back-to-Work Employer Grant Program.
Unlike other work incentives, this program will offer grants to businesses and employers to use as hiring bonuses for eligible employees.
The program will utilize $10 million in federal funds and serve roughly 7500 Maine residents on a first-come-first-serve basis.
New employees must fulfill the following criteria:
- Received unemployment benefits for the week of May 24 – 29, 2021.
- Started a new qualifying job in Maine between June 15, 2021, and July 25, 2021.
- Work at least 35 hours/week for a full-time job or 20 hours/week part-time work.
- Receive an hourly wage of less than $25 (Maine minimum wage is $12.15/hour).
- Be employed for at least eight weeks and not claim or receive unemployment benefits during this period.
The grant will offer a one-time cash bonus of $1500 to new full-time employees and $750 to new part-time employees.
Payments would reach eligible employees after eight weeks of verified employment.
6. Michigan
Gov. Gretchen Whitmer has expanded Michigan’s existing Work Share Program to include a Back-to-Work Incentive.
The state incentive is only available to employers already participating in the workshare program and bringing back previous employees.
Returning employees will receive $300/week till September 4, 2021.
Michigan will continue the unemployment assistance program detailed in the American Rescue Plan for other unemployed residents.
7. Montana
The Republican state Montana became the first state to stop FPUC benefits and offer a return to work bonus on May 4, 2021.
Gov. Greg Gianforte announced the Montana Return-to-Work Bonus Initiative to replace the $300 weekly jobless benefits. For this, the state has allocated $15 million of federal funds.
Available through October 2021, this bonus will be offered on a first-come-first-serve basis and will serve roughly 12,500 individuals.
Montana residents must meet the following eligibility criteria to claim the $1200 bonus:
- Receive unemployment benefits as of May 4, 2021.
- Accept a work offer between May 4, 2021, and October 31, 2021.
- Work for at least four consecutive weeks.
- Not receive any unemployment benefits during the employment period.
The Montana Department of Labor & Industry (DLI) will contact eligible residents after four weeks of employment.
8. New Hampshire
Gov. Chris Sununu ended the federal unemployment benefits on June 19, 2021. Instead, he announced a $10 million program offering a one-time bonus to returning workers.
The New Summer Stipend – Return to Work Bonus program will award full-time employees $1000, while part-time employees receive $500 on a first-come-first-serve basis.
The Summer Stipend eligibility criteria are as follows:
- Filed for unemployment benefits in the state as of May 18, 2021.
- Returning and staying at work for eight consecutive weeks.
- Earn $25/hour or less (New Hampshire minimum wage is $7.25/hour).
Eligible employees will need to apply for the stipend only after eight weeks of employment. They will also have to upload their pay stubs to verify the employment period.
9. New Mexico
Gov. Michelle Lujan Grisham introduced the Return-to-Work Support Payment program in New Mexico on July 2, 2021.
Eligible workers will have to meet all the following requirements to receive up to $1000 supplemental income:
- Secure a new job between July 4-31, 2021.
- Not certify for unemployment benefits through August 28, 2021, after starting the job.
- Complete at least nine consecutive weeks of employment.
The Department of Workforce Solutions will make payments according to the following guidelines:
- If the employee begins a new job between July 11-17, 2021, they will receive an $800 supplement.
- If the employee begins a new job between July 18-24, 2021, they will receive a $600 supplement.
- If the employee begins a new job between July 25-31, 2021, they will receive a $400 supplement.
These bonus payments aim to help roughly 15,000 New Mexicans find suitable jobs before federal unemployment benefits officially end on September 6, 2021.
10. Oklahoma
On May 17, 2021, Gov. Kevin Stitt announced that Oklahoma would end the pandemic-related federal unemployment benefits.
The Return to Work Initiative will offer 20,000 Oklahomans a one-time $1200 cash incentive to motivate jobless workers.
To be eligible, employees must fulfill the following conditions:
- Have an active and eligible unemployment claim for the first two weeks of May (May 2-15, 2021).
- Work at least 32 hours/week (full-time or part-time).
- Work at least six consecutive weeks between May 16, 2021, and September 4, 2021.
- Provide paycheck stubs for the six weeks of work.
Eligible candidates can apply for the incentive after six weeks of employment.
11. Virginia
On June 11, 2021, Virginia Gov. Ralph Northam announced the Return to Earn Grant Program in addition to the federal unemployment benefits.
In his statement, the governor emphasized that the program would empower all Virginians, including workers and small businesses, with a $3 million investment.
The program will match up to $500/hire that small businesses pay the new employee to ease their transition back to work after the Covid 19 pandemic.
Small businesses must meet the following criteria to be eligible:
- Be incorporated in Virginia.
- Have less than 100 employees.
- Pay at least $15/hour (Virginia minimum wage is $9.50/hour).
- Qualify as W-2 employment (salaried employment), full-time or part-time.
- Hire new employees on or after May 31, 2021.
The state government will provide these benefits for a maximum of 25 new hires in every eligible business.
Additionally, certain small child care businesses with workforce shortages may receive a 100% reimbursement of up to $500 per new hire.
4 FAQs about America’s labor shortage
There’s no denying that America’s facing a labor shortage.
However, both sides of the political aisle have differing views on what caused this situation, what’s exacerbating it, and how to best tackle it.
1. Are unemployment benefits the cause?
Arizona Gov. Doug Ducey and many of his Republican colleagues share the view that federal benefits incentivize people not to work, creating a labor shortage.
However, Morgan Stanley found no conclusive evidence that cutting federal benefits has boosted the labor market — contradicting the GOP belief.
Then what’s the cause?
President Biden cites the following factors instead:
- Fear of catching Covid-19.
- School and daycare closures.
- Child care constraints.
Prominent economists, such as AnnElizabeth Konkel at Indeed, expand upon these factors.
Covid infections are sharply rising while vaccination rates are stagnating. As a result, many adults are hesitant about returning to the workplace.
Additionally, many schools and daycare centers are still closed. For parents with child care challenges, a one-time bonus is not enough to alleviate their hesitancy.
However, cash incentives may encourage unemployed people if money is their primary motivator, Konkel adds.
2. Will financial incentives work?
A recent study shows that hiring bonuses are the most appealing incentives for hesitant unemployed Americans.
About 40% of those surveyed cited that a $1000 signing bonus would increase their urgency to seek full-time employment. The study also found that employees aged 25-34 were particularly interested in one-time bonuses.
Konkel’s observations on the job site ‘Indeed’ reflect this pattern of job seekers searching for employment benefits such as signing bonuses. She also notes that most people are probably motivated by a one-time bonus due to uncertainty.
The pandemic is still evolving, and the average person is unsure about what the future holds. So, an immediate cash bonus payment could help alleviate some of these fears and offset some costs of returning to work, like child care.
3. Are the other states participating?
As of July 2021, legislation in North Carolina and New York would provide unemployed residents with work bonuses.
North Carolina Gov. Roy Cooper supports a bill that offers returning full-time employees a one-time $1500 cash bonus if they enter the workforce within 30 days of the program’s start. If a worker begins employment between 30-60 days, this bonus drops to $800.
In New York, Sen. Ed Rath has introduced legislation offering $1200 to newly employed New Yorkers after four consecutive weeks of work.
New Jersey Rep. Josh Gottheimer would like to offer unemployed New Jersey workers a $500 bonus if they re-enter the workforce. However, talks are still in their infancy.
4. What’s happening on the federal level?
Currently, there are four bills — two in the House and two in the Senate:
- North Carolina Rep. Ted Budd’s bill, The Back to Work Bonus Act, would provide $900 bonuses to unemployed workers nationwide. The bill strengthens existing work search requirements for remaining FPUC benefits.
- Texas Rep. Kevin Brady introduced the Reopening America by Supporting Workers and Businesses Act of 2021. Here, full-time and part-time employees would receive a one-time bonus of $1200 and $600, respectively.
- Ohio Senator Rob Portman’s Return-to-Work Bonus would temporarily provide all Americans returning to work $450/week on top of their regular wages.
- Idaho Senators Mike Crapo and Jim Risch introduced the Back to Work Bonus Act. The bill would provide full-time and part-time employees a one-time payment of $1200 and $600, respectively.
Wrapping up
The American Rescue Plan’s unemployment benefits are ending on September 6, 2021.
Some states are trying to cushion the blow by offering a return to work bonus, which could encourage unemployed people to seek employment before the deadline.
However, there are many reasons for America’s labor shortage.
Improvement in this situation depends on the flexibility of the state and federal government and the success of the return to work bonus program.
Andy is a technology & marketing leader who has delivered award-winning and world-first experiences.