Colorado initial unemployment claims continue to fall, but benefit payments continue at record highs

State paid out $96 million in regular benefits last week
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Posted at 12:41 PM, May 14, 2020
and last updated 2020-05-14 17:28:18-04

DENVER – Colorado is paying out the same amount of unemployment benefits on a monthly basis during the COVID-19 outbreak that it typically does in a year, but initial unemployment claims dropped again last week in Colorado as most of the state moved to the safer at home phase.

The Colorado Department of Labor and Employment said that another 22,483 Coloradans filed initial regular unemployment claims last week, which was down from 28,164 the week before. It was the fourth straight week that regular unemployment claims have declined in Colorado.

Another 9,125 self-employed or gig workers filed federal Pandemic Unemployment Assistance (PUA) initial claims last week – bringing the total number of PUA claims filed so far to 63,180.

In total over the past eight weeks, a combined 451,155 regular and PUA initial unemployment claims have been filed in the state.

Colorado paid out $96 million in regular unemployment benefits last week. Since the first week of April, the state has paid out more than $432 million in regular benefits. The average weekly benefits payout in 2020 prior to those weeks was $8.7 million.

And $101.8 million in federal PUA benefits have been paid out since April 20 to gig workers and self-employed workers, though that money comes from the federal government and not the state’s unemployment insurance trust fund.

CDLE officials said that about $550 million in Pandemic Unemployment Compensation money – the $600 a week program for anyone receiving either regular or PUA benefits – had been paid out so far.

The industries continuing to see the highest number of claims with benefits paid are accommodation and food services, retail trade, and health care and social service.

CDLE Deputy Executive Director Cher Haavind said officials still believe that initial claims have peaked but that benefit payments were still at record amounts.

The officials said – as Legislative Council Staff wrote in its latest forecast earlier this week – that they expect the state’s unemployment trust fund to become insolvent in late June or early July. There was $1.1 billion in the fund earlier this year before the COVID-19 outbreak.

The officials said that once the fund becomes insolvent, they will be able to borrow from the federal government at 0% interest for the rest of 2020 to pay benefits.

CDLE Senior Economist Ryan Gedney said that employers covered by unemployment insurance will see their premium rates change starting Jan. 1, 2021 in the event, which officials expect to happen, that the fund goes insolvent. Depending on whether the insolvency happens in June or July, when the new fiscal year begins, the Standard Premium Rate Schedule (Pg. 71) would shift premium rates for employers that would likely increase their payments.

Gedney said that the solvency surcharge will trigger if the trust fund is below $687 million on June 30.

The CDLE officials said that the department had received about 600 reports of job refusals as the state moved to the safer at home phase and businesses started reopening and that most employees had refused on the basis that they had underlying medical conditions or are caring for a dependent who has underlying medical issues.

They were also clear that employees cannot refuse to return to work out of fear of contracting the novel coronavirus and that there has to be other conditions that are met, like underlying health conditions or an unsafe workspace, in order for benefit payments to continue.