Effective February 6, 2020, New York has reduced the amount of time striking workers must wait before they are eligible to receive unemployment benefits. While New York is one of only a handful of states to allow strikers to receive unemployment benefits, the seven-week waiting period that has applied until now has served as a deterrent to strikes.
The new, shorter waiting time has the potential to affect the calculus and reduce employers’ economic leverage in collective bargaining. Earlier access to unemployment benefits could soften the blow that a strike has on an employee’s financial well-being and potentially increases the willingness of unions and employees to strike.
The Supreme Court has long held that the National Labor Relations Act does not preempt a state’s ability to determine whether unemployment benefits are available for employees engaged in a labor dispute. As unemployment benefits are generally available only to those workers who are ready, willing, and able to work, employers might reasonably expect that workers who voluntarily withhold their labor in a strike would not be eligible for such benefits.
In the past, striking employees in New York had to wait seven weeks before they could file for unemployment benefits, unless there was a lockout or the employer hired replacement workers. This waiting period meant that striking workers could not receive their first benefit check until the ninth week of the work stoppage.
The purpose of the delay in benefits was to prevent the state from inserting itself prematurely into a private-sector labor dispute and to avoid a strike unintentionally being financed through unemployment insurance benefits. It was intended to act as a counterbalance and reduce the risk of frivolous strikes and work stoppages, while providing a safety net in a situation where a labor dispute met a long impasse.
A reduction in the waiting period for unemployment benefits potentially changes the dynamics in collective bargaining by reducing the incentive for unions and workers to avoid strikes and the economic hardship on those who strike and increasing the pressure on employers to concede to union demands to avoid strikes.
When signing the bill, Governor Cuomo noted that over the last two years there has been a recent upsurge in major strike activity. With unemployment benefits available sooner, unions may be more willing to initiate or prolong a strike to improve their bargaining position. New York employers should be wary of how this shift in the costs of striking could affect future labor negotiations and update their existing strategies accordingly.
The states that currently permit striking workers to receive unemployment benefits is short. In 2018, New Jersey passed a bill permitting striking workers to begin collecting unemployment benefits 30 days after the start of a strike. Other states, such as Georgia, New Hampshire, and Rhode Island, provide benefits if unemployment continues after the labor dispute ends, so long as the worker did not participate in the strike and is not a member of the union involved in the labor dispute.