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Partial Unemployment Benefits for Hour and Pay Cuts

unemployment claim form on an office table

Most people probably aren’t even aware that such a thing as partial unemployment benefits even exist but, in fact, unemployment benefits aren’t so black and white – lose your job, get assistance. There are benefits available for employees whose hours are cut or whose pay is decreased as well and, as a business owner, you should know this.

Eligibility for Partial Benefits

Eligibility for partial unemployment differs by state. Some of the general requirements, however, are listed here.

  • Employees must be underemployed through no fault of their own – in other words, their hours must have been cut by their employer and not at the employee’s own request.
  • The employee must be willing to work full time and looking for work. Going back to school after having one’s hours reduced would nullify eligibility.
  • Employees could be eligible if after losing their job they were only able to find part time work.

Where the Unemployment Funds Come From

The Department of Labor’s unemployment insurance program is funded through the unemployment tax that employers pay as a part of their payroll taxes. It’s an insurance or tax that is paid regardless of whether the employer ever employs people that use the benefit. Like most insurance premiums, we may never use the benefits but we have to pay them anyway to support the collective need. For more details, read this article on eligibility.com.

How Unemployment Claims Impact Employers

When employees claim these benefits, employers could start paying higher employment taxes due to an increase in their unemployment insurance tax. It’s similar to car insurance rates which rise when you make a claim. The more employees that are laid off by an employer who claim unemployment, the higher the employer’s rate will be. Partial unemployment claims also affect the unemployment insurance tax rates.

Avoid Cutting Hours and Pay

To avoid increases in employment tax rates, great care should be taken to hire good people and to avoid layoffs, pay cuts, and reducing hours.

Of course, these things can’t always be avoided. Companies go through periods of hardship where pay cuts and layoffs are inevitable. Sometimes employers reduce a troublesome employee’s hours in hopes that the employee will resign. It’s a reasonable strategy for avoiding legal difficulties but it could mean that the employee starts collecting unemployment benefits. That’s one of many reasons why good hiring strategies and retention efforts are important for employers. It helps keep costs down in the long run.

There are all sorts of reasons that employees don’t work out or don’t work out in the way initially hired. Many of them are inevitable. But by offering a good company culture, decent working conditions, amicable management, living wages, and even severance packages, many issues can be avoided.

Being aware of where the unemployment money comes from and when employees can collect it can help employers make better business decisions and avoid most unemployment claims.

38 Comments

  1. Donna Bonner
    Donna Bonner March 16, 2020

    Our employer seems like they don’t care about us. Their only concern is more money in their pockets. Just being honest. It is so sad, because we are always there when they need us. They even call us in on our off days. But since this coronavirus scare, they offer us nothing regarding hand sanitizer or anything. We make peanuts with no hours. Now they are taking away 2 hours of our 15 hours or less. My question is, is there anything that is made available to workers whose hours are being cut, meaning less money? We have bills to pay too.

    • Lindsay Sommers
      Lindsay Sommers March 25, 2020

      I’m sorry to hear about your hardship. There’s not a ton you can do to get more hours because an employer can cut hours at any time; however, you can speak with an unemployment representative about your options.

      • Nina Sheron Gregory
        Nina Sheron Gregory March 26, 2020

        I work PRN in the healthcare field they have cut my hours to 16hrs bi-weekly which totals to 30hrs a month i went from working 80+hrs a paycheck to now 16hrs a paycheck with this happening can I apply for unemployment? The reason for cut back on ours is because of the volume of patients has dropped TREMENDOUSLY we went from seeing 400-500 pts a day in the emergency room to barely seeing 50 pts a day within the last 2wks.

        • Lindsay Sommers
          Lindsay Sommers March 26, 2020

          Hi, there. I would suggest speaking with your local state’s unemployment office to see what kind of assistance they can offer you. Unemployment benefits vary by state, so your best bet is to check with them.

      • Mary Ann McCabe
        Mary Ann McCabe March 29, 2020

        MY HOURS AND PAY WERE CUT ALMOST IN HALF AND I CAN’T FIND THE FORM TO FILL OUT FOR PARTIAL UNEMPLOYMENT

  2. Merry Reid
    Merry Reid March 23, 2020

    I am regular employee and my hours got cut tremendously. The past two weeks I have getting 20 hrs and the next week 17 hrs. This is truly killing me and not only that now I have to pay back the health insurance. Dillard’s does not treated in a right way. I am about to loose car and not have a place to live if this continue on.

  3. Jenny
    Jenny March 25, 2020

    I’m wondering what unemployment benefits I might be eligible for:

    I’m being transitioned from full-time salaried employee to part-time hourly–up to 12 hours a week. However, it’s unlikely there will be any hourly work available for me to actually do in the coming weeks or months because my employer’s business is contracting. So I would be making no income, but not officially laid off.

    And I would not be able to specify any weekly income in order to apply for partial unemployment benefits.

    • Lindsay Sommers
      Lindsay Sommers March 25, 2020

      I would suggest speaking with your local unemployment office in regards to unemployment assistance and questions.

  4. Dottie
    Dottie March 26, 2020

    Am I eligible for partial unemployment benefits if my employer is keeping me on full time (40 hours a week), but is significantly cutting my salary for a minimum of 6 weeks? I am grateful to still have some form of income, but because I am not technically unemployed or on reduced hours I’m worried I wouldn’t qualify.

    • Lindsay Sommers
      Lindsay Sommers March 26, 2020

      Hello. You will want to contact your state’s unemployment office directly so see what you qualify for, because rules vary by state.

  5. John Dingle
    John Dingle March 27, 2020

    We got an email at my job saying all salary employees are cut 25% of our pay until further notice because of the economy. We never shut down. I don’t get it. Best part about it is we got an email at 4pm today. No meeting or nothing just a.email after we were all gone.

    • Lindsay Sommers
      Lindsay Sommers March 27, 2020

      Employers are technically allowed to cut pay and hours at any time; however, they must notify employees before this change. Put and hour cut notification rules vary by state– in most cases, and email notification is legal. I would suggest speaking with your local labor board for clarification.

      • Nikki
        Nikki March 27, 2020

        How do you know which states do this? I m in Georgia and have been cut down too 1/3 of my weekly pay. I would like to think that I can apply for partial since 1/3 is what I am losing.

  6. LUCRETIA GRAY
    LUCRETIA GRAY March 28, 2020

    My company just laid off staff the majority of the staff and then turned around and cut the salaries by 50% for those who were not effected by layoffs. We were only given a verbal with no indication if this would be permanent or anything in writing. I am an exempt employee and head of my household. 50% is alot along with insurance and having to commute into the city. That is were all my money would go trying to get to work without be able to pay bills. If I don’t take the offer can I collect unemployment. Unemployment States that if companies don’t have Operating funds/orders I can collect. And at this time I work for a manufactures and customers are canceling orders. The affective pay period starts on April 1st and we have not received anything in writing. I am afraid if I work April 1 then they’re going to hold me to the new pay cut without anything in writing.

  7. mike kearney
    mike kearney March 28, 2020

    Hi, what about this scenario, a person makes $135k per year on salary but has the salary cut 25% due to the COVID-19. So they are still making around $100k. Would that person be able to file a claim based on the 25% cut?

    • Lindsay Sommers
      Lindsay Sommers March 30, 2020

      You would have to speak with your state government’s unemployment office directly so see whether you qualify.

    • Quarantined in NY
      Quarantined in NY April 3, 2020

      Were you able to find anything out, Mike?

  8. Patti Ross
    Patti Ross March 28, 2020

    Regarding wage reduction due to coronavirus, how do I start process for significant reduction in wages?

    I tried applying for inempmoyment online but when it asked if i worked full time i answered no and did you earn at least $250 a week and i answered yes. It blocked me and said not eligible. I reD in new stimulus rules that i would be eligible for some benefits. How do I proceed?

    • Lindsay Sommers
      Lindsay Sommers March 30, 2020

      Partial unemployment benefits vary by state. I would suggest visiting your state’s employment office website to see if you qualify for a partial wage replacement benefit payments. If you need assistance with your application, I’m sure they must have a contact form or phone number to call for assistance.

  9. Brenda
    Brenda March 28, 2020

    I work full time and received email notification that everyone hours will be cut 8 hours a week due to the Virus. We were informed must use 8 hours vacation time a week to supplement. Can they force you to use your vacation time instead of collecting unemployment

    • Lindsay Sommers
      Lindsay Sommers March 30, 2020

      Paid time off isn’t regulated by the federal government, so any time off regulations are dictated by your state’s government. In fact, according to the DOL, “Since employers are not required under the FLSA to provide any vacation time to employees, there is no prohibition on an employer giving vacation time and later requiring that such vacation time be taken on a specific day(s). Therefore, a private employer may direct exempt staff to take vacation or debit their leave bank account […] whether for a full or partial day’s absence, provided the employees receive in payment an amount equal to their guaranteed salary.” This means that your employer can most likely require you to use your vacation time. To be sure, I suggest checking with your state’s local labor board to check the legality of your situation. If you need further assistance, you can also speak with your HR representative.

  10. Mona Grady
    Mona Grady March 29, 2020

    I’m a full time employee that work at a hotel , We have remain opened because of Corona we barely have any guest I no longer work 40 hours a week I’m under 30 and management make us take lunch breaks that take me from working 5 hours a day to 4 and a half can I file for partial Unemployment ?

    • Lindsay Sommers
      Lindsay Sommers March 30, 2020

      Partial unemployment benefits vary by state. I suggest speaking with your state government’s unemployment office to see if you qualify for benefits.

  11. Jesse
    Jesse March 30, 2020

    My hours got cut.
    And my pay was cut 20 #
    Do I qualified for benefits.
    It all was cause of the oil drop and the virus I supposed
    Anybody know thanks

  12. Sara
    Sara March 30, 2020

    I just filled for partial unemployment on Friday my employer just told us we are closing after today how do I go back in and change my claim or should I wait till my claim is approved to change any thing??

    • Lindsay Sommers
      Lindsay Sommers April 2, 2020

      You should definitely speak with your local unemployment office. Every state has its own regulations, so it’s imperative that you speak with them for clarification.

  13. Dawn Smith
    Dawn Smith March 31, 2020

    Do you know if we reduced salaries by 20% for exempt employees, could those employee’s enroll in partial unemployment?

  14. George MaHarris
    George MaHarris March 31, 2020

    I have a question regarding partial unemployment insurance during Coronavirus. My employer was actually unaware that employees can file for partial unemployment due to the hours they have been cut. Currently a lot of us are working less than 40 even 20 hours and have filed for partial benefits. However my employer is approaching this from a standpoint of we are getting reimbursed our missing hours and is giving priority to the employees that are not filing for what available hours there are. Most of these employees are newer and less qualified for the work.
    My question is a two parter: is this legal for them to do, and how do I report it (I have already brought this up with the scheduler, if I complain anymore my job is at risk for not being a team player)
    Thanks!

    • Lindsay Sommers
      Lindsay Sommers April 2, 2020

      I’m sorry to hear you’re in a sticky situation. Your employer can technically cut hours and pay at any time (as long as it doesn’t breach a contract), however, if your employer is specifically discriminating against employees, that can potentially be a legal issue. I would recommend bringing this up with the Department of Labor to sort this out if you feel as though your current representatives cannot help you.

  15. Hijinee Martinez
    Hijinee Martinez April 1, 2020

    Hello, I already receive partial benefits but recently got laid off due to the coronavirus. There is no information anywhere as to how to tell the DOL that I am not currently working anymore. The job I was receiving partial benefits for had closed in October 2019 and instead of giving the workers a severance package they just allowed us to do unemployment until it runs out. But I was receiving partial because be I found another job. But I was just laid off last week and tried to file this week stating that I have worked no hours during said week and no longer work. Therefore they put my account on HOLD. I’ve tried calling numerous times put it sounds like the phones have been taken off the hooks and also I’ve tried emailing them as well but still no answer. I am also under quarantine so NONE of the offices are open for in-person meetings. I don’t know what to do. I’m frustrated. I have no way to pay my rent this month without it.

  16. CB
    CB April 1, 2020

    Hi,

    We got an email at my job saying all salary employees are cut 25% of our pay until further notice but still have to work 40 hours. Can i apply for partial unemployment?

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