By Sarah Chaney and Eric Morath

WASHINGTON -- Workers will have to wait a little bit longer for larger unemployment-insurance payments aimed at helping millions of people who have lost their jobs during the coronavirus pandemic.

A senior U.S. Labor Department official said Friday that federal funds promised to states, which administer jobless benefits, should be distributed next week.

Workers over the past two weeks have filed for unemployment-insurance benefits in record numbers, and states have been anticipating funding and more specific instructions on how to implement provisions to expand unemployment benefits included in a $2 trillion federal stimulus package signed into law last week.

On Monday, Labor Secretary Eugene Scalia said these funds would be distributed to states this week, but the federal government won't meet that goal.

The senior Labor Department official expects states to have individual accounts at the Treasury Department that they can draw upon next week, the caveat being that states would need to be ready with the proper technology to access and disburse these funds.

Some states would be ready to release the extra $600 weekly payment to individuals within a week or two after tapping federal money. For others, it could take two to four weeks or even longer, the Labor Department official said.

The $600 additional payments are retroactive to last Saturday, when the Labor Department entered into an agreement with states, according to the official. That means, for instance, Americans who don't receive the extra $600 a week until the end of April would receive the payments all at once.

Pressure has been building for the government to act quickly.

Many states are refraining from increasing unemployment payments to laid-off Americans by $600 a week -- one of the major provisions included in the stimulus plan -- until the federal government provides the necessary cash.

Without specific guidance from the U.S. Labor Department, states say they also are unable to accept or fully process claims from individuals, like independent contractors and self-employed people, who are newly eligible for unemployment benefits under the stimulus package.

Ava Dejoie, secretary of Louisiana's workforce commission, said those who work in the gig economy and at restaurants, among other sectors, are dependent on getting unemployment checks fast.

"The American people need their money right now," Ms. Dejoie said. "It's a lifeline. It means food on their table. It means that their children can eat."

States including Louisiana, Nevada, Alabama, Rhode Island and Oregon, said on Friday they hadn't received the federal funds to increase jobless payments, which amounts to more than double the existing maximum in some states. Ohio said on Thursday the state hadn't gotten the federal funding.

State officials say they hope it comes quickly, especially given the huge number of unemployment-benefit applications they are processing.

"The sooner the better obviously because of the volume of claims," said Rosa Mendez, public information officer at Nevada's employment department.

Unemployment claims reached a record 6.6 million last week after logging in at 3.3 million a week earlier. Until recently, applications for unemployment benefits had been hovering near 200,000 a week.

States are in need of federal funding to pay the extra benefits because they would have to otherwise draw on their own trust fund money, which derives from employer taxes.

"There is no way that a state could say they could pay $600 in benefits without an infusion in cash," Ms. Dejoie said. "That money has been promised to the people of Louisiana by our federal government."

States received preliminary guidance on implementation of the federal stimulus from the Labor Department on Thursday evening. They expect to receive more specific guidelines in the coming days. Such specifics would answer questions on what types of paperwork and tax forms individuals who are newly eligible for unemployment benefits, such as gig-economy workers, would need to provide in their benefits applications.

Write to Sarah Chaney at sarah.chaney@wsj.com and Eric Morath at eric.morath@wsj.com

(END) Dow Jones Newswires

April 03, 2020 22:14 ET (02:14 GMT)

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