SC Governor Orders End to Federal COVID Unemployment Programs by Late June

South Carolina Gov. Henry McMaster speaks to a crowd in Columbia, South Carolina, on Nov. 3, 2020. Sean Rayford/Getty Images

South Carolina’s governor on Thursday ordered an end to the state’s participation in all federal COVID-19 pandemic-related unemployment benefit programs, citing workforce shortages.

The move will be effective on June 30, whereby the state will opt out of six federal COVID-19 pandemic unemployment programs that it had previously chosen to participate in.

Gov. Henry McMaster announced in a statement that the state is currently facing a labor shortage “created in large part by the supplemental unemployment payments that the federal government provides.”

“Since the Biden Admin and Congress appear to have no comprehension of the damage being done, the State of South Carolina must take action,” he said.

In a letter (pdf) to South Carolina Department of Employment and Workforce (DEW) Director Daniel Ellzey, McMaster said that in many instances, the payments from the unemployment benefits are “greater than the worker’s previous pay checks.”

“What was intended to be short-term financial assistance for the vulnerable and displaced during the height of the pandemic has turned into a dangerous federal entitlement, incentivizing and paying workers to stay at home rather than encouraging them to return to the workplace,” he wrote.

The six programs affected are:

• Pandemic Unemployment Assistance (PUA)
• Pandemic Emergency Unemployment Compensation (PEUC)
• Federal Pandemic Unemployment Compensation (FPUC)
• Mixed Earner Unemployment Compensation (MEUC)
• Emergency Unemployment Relief for Governmental Entities and Non-profit Organizations
• Temporary Federal Funding of the First Week of Compensable Regular Unemployment for States with No Waiting Week

DEW Executive Director Ellzey said in a statement, “At the current time, there are 81,684 open positions in the state of South Carolina. The hotel and food service industries have employee shortages that threaten their sustainability. However, no area of the economy has been spared from the pain of a labor shortage.

“While the federal funds supported our unemployed workers during the peak of COVID-19, we fully agree that reemployment is the best recovery plan for South Carolinians and the economic health of the state. Last week’s initial claims numbers were the lowest since the pandemic began, and employers around the state are eager to hire and anxious to get South Carolina back to business.”

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The move makes South Carolina the second U.S. state to end the expanded unemployment benefits. Montana was the first state to do so, with Gov. Greg Gianforte announcing on May 4 that the state would opt out of all federal COVID-19 unemployment programs, effective June 27.

In addition to opting out of federal unemployment programs, Gianforte also announced that the state will use federal funds authorized under President Joe Biden’s $1.9 trillion American Rescue Plan Act to give “return to work bonuses” to unemployed people who rejoin the workforce and stay employed for at least one month.

“Montana is open for business again, but I hear from too many employers throughout our state who can’t find workers. Nearly every sector in our economy faces a labor shortage,” Gov. Gianforte said in a statement. “Incentives matter, and the vast expansion of federal unemployment benefits is now doing more harm than good. We need to incentivize Montanans to reenter the workforce.”