Iowans have 10 fewer weeks of unemployment under new law

Unemployed Iowans will receive 10 fewer weeks of benefits starting July 1, and they may have to take lower-paying jobs sooner than they do now.

Gov. Kim Reynolds signed these changes into law alongside two other workforce bills Thursday at the Iowa Association of Business and Industry conference in Dubuque. The governor said the new laws will help Iowa overcome its worker shortage.

“It’s no secret that Iowa, like the rest of the country, is facing a critical workforce shortage, but we cannot stand idle and allow employable Iowans to sit on the sidelines,” Reynolds said in a news release. “And we must implement practical and efficient changes that cut through bureaucratic red tape and assist employers with filling their critical vacancies.”

Iowans can receive up to 16 weeks of unemployment benefits under the new law, cut from 26 weeks. People who file their initial unemployment claim before July will still have up to 26 weeks of payment.

In addition to the shorter timeframe, the new law lowers the salary threshold compelling Iowans to accept a new position or lose benefits sooner. After one week on unemployment, a worker will have to accept a job offering 90% of their previous wages, dropping to 80% after three weeks, 75% after five weeks and 60% after eight weeks.

Under previous unemployment laws, Iowa did not require workers to accept a job with less pay until their fifth week of benefits.

The law, House File 2355, passed with only Republican support during the 2022 legislative session. Democrats argued on the Statehouse floor that the unemployment changes would not help Iowans find jobs more quickly.

“Why are we punishing people who are fired through no fault of their own and looking for work?” House Minority Leader Jennifer Konfrst said during debate on March 23. “By cutting them off and thinking that will get them back to work? This is short-sighted, this is mean, and this is wrong.”

But Republicans argue the changes are necessary to offset the lingering effects of the COVID-19 pandemic on Iowa’s workforce. Reynolds said during her January Condition of the State address that unemployment benefits were keeping people from returning to work.

“There is dignity in work; it gives us meaning and purpose,” Reynolds said. “So when it’s degraded, when idleness is rewarded with enhanced unemployment and stimulus checks, when work begins to seem optional rather than fundamental, then society begins to decay.”

Iowa businesses are still fighting to recruit more workers, but state unemployment is down: Iowa Workforce Development reported a 2.7% unemployment rate in May. It’s lower than the national unemployment rate of 3.6%. Iowa has nearly returned to its March 2020 unemployment rate of 2.6%.

“Every month that passes brings us closer to Iowa’s pre-pandemic employment level,” Iowa Workforce Development Director Beth Townsend said in a statement. “But our real goal is higher. We want to continue to accelerate the recovery and get as many of Iowa’s 85,000 open jobs filled as quickly as we can.”

The struggle to fill those open jobs also comes from the state’s shrinking labor force. Iowa’s labor force – people employed or actively looking for work – has more than 41,000 fewer workers than in February 2020.

Progress Iowa, an advocacy group, released a statement Thursday after the signing saying the new law makes Iowa “a more unwelcoming state” for workers.

“We know that taking away our hard-earned benefits won’t solve the Reynolds Workforce Crisis,” Matt Sinovic, executive director of Progress Iowa said in a statement. “We need our lawmakers to invest in working families and make corporations pay what they owe.”

Reynolds also signed two other workforce bills at the conference Thursday. One, a “workforce omnibus,” implemented a variety of changes including to state requirements for workforce learning programs and housing inspections. The other lowered the age requirements and staff-to-children ratios for child care providers.