The U.S. Department of Labor is not allowing Vermont to pay unemployed people an extra $25 a week that the Legislature authorized.
The feds notified the Vermont Department of Labor on Sept. 1 that the supplemental payment did not meet federal unemployment insurance program requirements, so Vermont could not use funds from the Unemployment Trust Fund to pay for the benefit. The state labor department announced the news Tuesday, nearly a week after learning about it.
The extra money was slated to come from a part of the savings businesses expected from a drop in the unemployment insurance tax hike on businesses. The state’s take would have brought in $100 million in coming years.
“The legislative intent was to create a supplemental benefit structured like the Federal Unemployment Compensation program, which added a flat amount to each weekly benefit payment,” Labor Commissioner Michael Harrington said in a statement.
“While this is exactly how USDOL structured FPUC over the last year, we were informed that a similar program is not permitted under federal unemployment insurance law,” Harrington said. “It’s unfortunate we are learning about this after the [Vermont] law has passed, but we must now adapt to ensure we comply with federal law.”
A message sent to the Vermont Department of Labor on Tuesday evening was not returned.
Corrections: Due to an editing error, an earlier version of the headline understated the frequency of the planned unemployment payments. In addition, the money would not have come from a tax hike on businesses; instead, the unemployment insurance tax was scheduled to drop, and the state would have taken a slice of the savings.
