Labor Department headquarters in Washington. (Photo: Mike Scarcella/ALM) Labor Department headquarters in Washington. (Photo: Mike Scarcella/ALM)

The Labor Department released guidance Wednesday to help states implement the Lost Wages Assistance (LWA) program, issued by President Donald Trump on Aug. 8.

Sen. Ron Wyden, D-Ore., ranking minority member on the Senate Finance Committee, argued Thursday, however, that Labor’s new guidance “leaves many unanswered questions,” and that Trump’s “unworkable executive order has states tied up in knots.”

Labor notes in its guidance that the lost wages program is authorized by a Presidential Memorandum. It provides claimants in most Unemployment Insurance programs with up to $400 per week of additional benefits, starting with weeks of unemployment ending on or after Aug. 1 and concluding on  Dec. 27 at the latest.

The LWA will be administered by states and territories through a grant agreement with the Department of Homeland Security’s Federal Emergency Management Agency (FEMA) and with support from Labor.

To qualify for LWA benefits, individuals must provide self-certification they are unemployed or partially unemployed due to disruptions caused by the novel coronavirus (COVID-19). Also, the state where an individual lives must confirm that this person is receiving at least $100 of underlying unemployment benefits, Labor explains.

LWA is funded by the Federal Emergency Management Agency through a joint federal-state agreement and provides the states with two benefit options.

Program Funding Details

For the $400 per week benefit, states must contribute 25% ($100); the federal government will cover 75% of the cost ($300).

Trump signaled recently that the federal government could pick up the entire $400 unemployment benefit if governors request that it do so.

States are encouraged to satisfy the 25% state match requirement and provide the additional $100 in benefits either through allocations of the state’s Coronavirus Relief Funds (CRF), provided under Title V of the Coronavirus Aid, Relief, and Economic Security (CARES) Act (Public Law 116-136) or other state funding.

For the $300 per week benefit, FEMA will fund the entire amount, and states may choose to simply satisfy the 25% state match, without allocating additional state funds, via state funding used to pay regular state unemployment benefits.

Assistant Secretary of Labor for Employment and Training John Pallasch said in a statement that “with the expiration of FPUC, LWA will provide important assistance to workers who need it.”

The LWA program may end earlier than Dec. 27, if FEMA expends $44 billion prior or the balance of the Disaster Relief Fund decreases to $25 billion, or if legislation is enacted that provides supplemental federal unemployment compensation or similar compensation for unemployed or underemployed individuals due to the COVID-19 outbreak.