BETA Post of Oregon Partial Unemployment Insurance Benefit and Total Income Estimator.

This is a post of a BETA version of an Oregon Unemployment Insurance Estimator in MS Excel for full time workers whose hours are involuntarily reduced.  

The Excel Estimator is embedded below and can also be found/downloaded HERE.

The Estimator is intended to show how the combination of reduced wages and reduced unemployment insurance benefit compares to full time wage income following the passage of Oregon SB 1701. This legislation increased to $300 the amount of earnings allowed before there is a reduction of unemployment benefits (AKA as the "income disregard"). 

This change is only in effect through December of 2021, when it reverts to the previous formula which had a max income disregard of $216. 

Note that SB 1701 did NOT change the restriction that if reduced wages are above the full weekly benefit amount, the worker will NOT be eligible for any unemployment insurance benefits; this test is built into the Estimator. 

This BETA version assumes the worker had full time employment and that the hours for that employee are being temporarily and involuntarily being reduce by a specific percentage. 

Only two inputs are necessary (other cells are password protected).

1. Annual full time covered wages (used to calculate the full time unemployment benefit). This should match the annualized amounts input into the Oregon Employment Department unemployment benefit estimator HERE: 

2. The percentage reduction in work hours (used to calculate the reduced wages, eligibility, and the amount of the reduced unemployment benefit).

Default Settings

I have set the default income at $28,000/$13.46 an hour, slightly above the Portland metro full time minimum wage annual level of $27,560@ $13.25 an hour. 

The reduction of hours default is set at 40%, with the full time worker hours cut back to 24 hours a week. 

Hourly wage and income comparisons are shown in the table and in the graph at the end of the Estimator. 

Observations, using the default selections ($28,000 full time wages/40% reduction in hours to 24 hours): 

• Reduced income for 24 hours is $323.
• The full time weekly UI benefit amount of $350 is reduced by $23 (the amount that the reduced income of $323 is higher than the new limit of $300) to $327. 
• Combining reduced income ($323) and reduced unemployment benefits ($327) produces a total weekly income of $650. That is 21%/$122 higher than full time weekly wage income ($538) alone. 
• Dividing $650 total income by 40 hours produces an hourly rate of $16.25 vs the full time wage rate of $13.46
• Dividing $650 total income by actual hours worked (24) produces an hourly rate of $27.08 vs the full time wage rate of $13.46.

SB 1701 Impacts Are Complicated and Need Additional Educational Outreach from OED.

The additional earnings income set aside in SB 1701 produces a strong incentive for full time lower wage workers to continue to work even though their work hours may be substantially less than full time. Not incidentally SB 1701 also provides employers with a mechanism to boost incomes and retain workers even with reduced schedules.

Explaining to both employees and employers the interaction of reduced hours and unemployment benefits will be a challenge for the Employment Department. There are many different outcomes that will vary by wage level, employment history, and the amount of work hour reductions. 

For example, using the same 40% reduction in hours I estimate that a full time employee with wages of $52,000 a year will still benefit, but the combination of reduced earnings and reduced unemployment benefit will replace 95% of full wages, not 121% as is the case of the worker at $28,000 annual wages. However, instead of a 40%/$400 reduction in total income this 24 hour a week worker would see only a 5%/$52 weekly reduction in total income because they would receive unemployment benefits of $348 in addition to their reduced wages of $600. 

In addition, if the hourly reduction falls below 35-40% it appears there are circumstances where the reduced earnings will exceed the full unemployment insurance amount, meaning the worker would not qualify for any unemployment insurance benefit. This is more likely at higher incomes when the maximum weekly benefit amount of $648 has been reached. 

I encourage the Employment Department to proactively publish on line tools and educational materials to help workers and employers to better understand the individual impact that these changes can have. 

I note that several states have on line estimators to show what partial income unemployment benefit amounts would be: 

Missouri	https://labor.mo.gov/DES/Claims/partial_benefit
Montana	http://uid.dli.mt.gov/partial-benefit-calculator
Wisconsin	https://my.unemployment.wisconsin.gov/Apps/BenefitCalculators/PartialBenefitsCalculator
Texas	https://www.twc.texas.gov/news/efte/tbcapp/partialui.html

Originally created and posted on the Oregon Housing Blog.