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South Carolina to end unemployment pay boost due to worker shortage

Updated: May. 6, 2021 at 4:04 PM EDT
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COLUMBIA, S.C. (WBTV) - South Carolina is set to end its participation in all federal, pandemic-related unemployment benefit programs due to a workforce shortage.

Governor Henry McMaster directed the S.C. Department of Employment and Workforce (DEW) to terminate South Carolina’s participation in these programs, effective June 30, 2021.

Governor McMaster directed the agency to take the action in a letter to DEW Executive Director Dan Ellzey.

“South Carolina’s businesses have borne the brunt of the financial impact of the COVID-19 pandemic. Those businesses that have survived – both large and small, and including those in the hospitality, tourism, manufacturing, and healthcare sectors – now face an unprecedented labor shortage,” governor McMaster wrote.

The governor continued: “This labor shortage is being created in large part by the supplemental unemployment payments that the federal government provides claimants on top of their state unemployment benefits. In many instances, these payments are greater than the worker’s previous pay checks. What was intended to be a 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.”

Raj Khanal is down at least three servers at Michael’s Rock Hill Grill. He says people don’t want to come back to work because they’re collecting unemployment and it’s hurting his bottom dollar.

“In mid-April, we had to close lunch one week and one week we had to close dinner because we didn’t have enough people to work,” Kanal said.

Garrett Frent is a district manager for a fast-food chain in North and South Carolina. He says he and other managers are having to take on extra responsibilities just to get the job done

“I’ve worked fry station, the grill, we’re filling in where it’s needed just to make sure we’re taking care of the guests the best we can,” Frent said.

Both say they hope more people take initiative before the benefits run out. On Friday, Frent said he has more applications coming in at some of his South Carolina locations.

“Already having eight applications in South Carolina is a great thing. We’re calling them up and hopefully, they come in for interviews and we get them going, but I think it’s going to make a big difference,” Frent said.

In a memo to Governor McMaster, Executive Director Ellzey outlined existing federal unemployment programs and what will change when the governor’s directive goes into effect on June 30.

Those programs include the following:

  • Pandemic Unemployment Assistance (PUA)
  • Pandemic Emergency Unemployment Compensation (PEUC)
  • Federal Pandemic Unemployment Compensation (EPUC)
  • Mixed Earners Unemployment Compensation (MEUC)
  • Emergency Unemployment Relief for Governmental Entities and Nonprofit Organizations
  • Temporary Federal Funding of the First Week of Compensable Regular Unemployment for States with No Waiting Week

“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,” said S.C. Department of Employment and Workforce Director Dan Ellzey. “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.”

For a summary of DEW reemployment programs, click here.

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