CARSON CITY (KTNV) — The Nevada Department of Employment, Training and Rehabilitation (DETR) announced it has started borrowing money from the federal government.
DETR reported this on Thursday and said it will ensure Nevada residents who are eligible for regular unemployment benefits to continue to receive payments without interruption during the ongoing COVID-19 pandemic.
Due to the ongoing pandemic resulting in historic unemployment claims, the state has exhausted its trust fund and began borrowing funds earlier this week.
Nevada’s unemployment insurance trust fund is funded by its unemployment insurance business tax. And DETR reports Nevada’s trust fund lasted nine months of extraordinary activity due to actions taken by the agency to build reserves prior to the onset of the COVID pandemic.
Nevada joins 22 other states in borrowing funds under Title XII of the Social Security Act. Pursuant to the Families First Coronavirus Response Act, no interest accrues on Title XII loans through December 31, 2020.
DETR says borrowing funds from the federal government in this manner is typical in times of economic recessions and will continue to borrow funds as necessary, similar to what was done in the last recession.
Additional extended UI benefit programs that are funded by the federal government are not impacted, according to DETR.
The Nevada unemployment office says it will work with the state’s Employment Security Council to set employer contribution rates and rebuild the trust fund when appropriate.