Louisiana has become the first state with a Democratic governor to pass a law eliminating the $300 per week supplemental unemployment benefit created by the federal American Rescue Plan Act of 2021 (ARPA). Under the new measure, Act No. 276, which Governor John Bel Edwards signed into law on June 15, 2021, Louisiana will eliminate the $300 benefit no later than July 31, 2021, while increasing the maximum benefit amount by $28 per week to $312 per week, a goal long sought by the governor. The elimination of the $300 amount was seen by many legislators as necessary to motivate Louisianans to return to work.

Under the ARPA, signed by President Joe Biden in March 2021, Congress provided a supplemental unemployment benefit of $300 per week to help offset the wide unemployment caused by the COVID-19 pandemic. The supplemental amount would be paid in addition to the weekly unemployment benefit amounts payable under state law. The supplemental benefit is set to expire on September 6, 2021. Under current Louisiana law, the maximum unemployment benefit amount payable is $284 per week, one of the lowest maximums in the country.

With increased vaccinations and the reduction in the infection rate, Louisiana’s economy has gradually reopened with an acute demand for workers, especially in the service sector. In Louisiana, as in many other states, business groups, headed by the Louisiana Association of Business and Industry, the state’s chamber of commerce, spearheaded an effort to repeal the $300 weekly benefit payment widely perceived as disincentivizing employees from returning to the workplace.

In the horse-trading that is the legislative process, Governor Edwards wanted to increase the maximum weekly benefit amount payable under Louisiana law and make the elimination of the $300-per-week supplemental benefit effective in mid-August 2021. During the negotiations that culminated in Act 276, the effective date of the change was settled on as July 31, 2021. Under Act 276, provided Louisiana eliminates the payment of the $300 supplemental benefit no later than July 31, 2021, the maximum weekly benefit amount will increase to $312 on January 1, 2022.