Virginia’s Unemployment Trust Fund is expected to hit zero in the next two months

The Virginia Employment Commission (VEC) announced the latest data regarding unemployment benefits claims and provided updates on the status of the Unemployment Insurance Trust Fund, the first Statewide Virtual Hiring Event, and the impending end of the federal $600 supplemental unemployment benefit program.

In the four months since the start of the COVID-19 pandemic, more than 1 million initial claims have been filed in Virginia, surpassing all initial claims filed from mid-2014 through 2019. VEC has paid $6.9 billion in benefits since the start of the pandemic. For the filing week ending July 18, the figure for seasonally unadjusted initial claims in Virginia was 37,946. The latest claims figure was an increase of 5,654 claimants from the previous week. The 357,098 continued claims is a decrease of 14,972 from the prior week.

The most recent week’s initial claims continued to represent industries most affected by the pandemic and related restrictions: accommodation and food services, administrative, retail and health care.

The unprecedented demand for unemployment benefits has drained the state’s Unemployment Insurance Fund, which started the year with a balance near $1.5 billion, and has put it on track to close 2020 with a record $750 million deficit. In order to continue paying unemployment benefits, Virginia will need to borrow funds from the federal government. The Unemployment Insurance Trust Fund is supported by taxes paid by employers. Because these taxes are based, in part, on a company’s history of laying off or reducing staff, the businesses most impacted by pandemic-related workforce reductions face the most significant increases in future Unemployment Insurance taxes.

While the majority of benefit payments has been made under federal programs, one such program will end this week unless federal lawmakers pass legislation to extend it. The Federal Pandemic Unemployment Compensation (FPUC) program has automatically provided $600 in supplemental weekly payments to anyone receiving state or federal unemployment benefits.

With the end of this program, many individuals are looking for employment.

On July 28, the VEC will coordinate the first Statewide Virtual Hiring Event to connect job-seekers with employers looking to fill open positions immediately. More than 1,000 job-seekers have registered, and more than 150 employers have registered to participate. For more information, visit https://www.vec.virginia.gov/node/12033.

 

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