The United Auto Workers (UAW) is an industrial union in North America that represents workers in the auto industry. The primary goal of a union is to provide workers with representation in the workplace, and one of the tactics unions might employ to negotiate their rights is striking. A strike occurs when workers collectively halt their labor to pressure employers to meet their demands.
The UAW strike of 2023 began on Sept. 15, 2023. It targeted General Motors, Stellantis and Ford, after their contract expired on Sept. 14. Labor strikes can cause a disruption for employers and employees, and one of the primary concerns often centers around benefits. However, navigating strike unemployment benefits is extremely complex, requiring careful management and accuracy. In this guide, we’ll walk through the UAW strike, its impact on automakers, what employees qualify for unemployment benefits and more.
The UAW Strike and the Impact on Automakers
The 2023 UAW strike is an organized labor strike by the United Auto Workers, whose full name is the International Union, United Automobile, Aerospace and Agricultural Implement Workers of America. This labor strike targets three of the world’s largest leaders in the automobile industry: General Motors, Ford, and Stellantis. On Sept. 15, 2023, over 13,000 employees walked out of three Detroit assembly plants, with the union stating an additional 38 General Motors and Stellantis distribution centers will partake in the walkout. Ford was exempt from the second round of walkouts, as they met some of the union’s demands during negotiations.
The primary goal of the UAW strike is to receive better benefits and increased raises, amounting to a 36 percent increase over four years, as well as a 32-hour work week with 40 hours of pay and for new hires to receive a traditional defined benefit pension in addition to their 401(k) plans, as well as improvements to other benefits.
The requests by the UAW can significantly impact automakers, as the Detroit Three will be required to offer cost-of-living wage increases, better health benefits, higher raises and more, all of which can impact their bottom line. Additionally, as negotiations continue, the halted labor forces these automakers to lay off workers due to a lack of parts caused by the strike. Consumers might also feel the brunt of the labor strike, with delayed orders and parts, as well as the potential for higher retail prices.
With that said, it’s hard to tell whether the UAW or the automakers have a leg up in the negotiations. If the strikes persist well into the winter, local economies, particularly those in the Midwest, where most auto plants are located, can experience a downturn. This can lead to higher unemployment rates, as auto workers and workers who are directly impacted by the UAW strike might lose their jobs.
With increased unemployment rates comes the heightened need for unemployment benefits. However, not every employee will be eligible to receive unemployment benefits due to the UAW strike. Strike unemployment benefits are complex, and as an employer and employee, it’s important to know how a labor strike can impact unemployment benefits, which we’ll explore in detail below.
Labor Strikes Generally Disqualify Employees From Unemployment Benefits
Employees on strike are generally ineligible to receive strike unemployment benefits. Most states do not allow workers on strike to receive unemployment benefits. However, employees working at an organization where other employees are on strike and don’t participate might be able to collect unemployment benefits if they are laid off due to the strike. Unemployed strikers are typically allowed to begin collecting unemployment benefits when the labor strike ends or if their reason for unemployment isn’t related to the strike.
Because strikers are ineligible for state and federal unemployment benefits, many unions, including the UAW, offer strike unemployment benefits to employees on the picket line. For the 2023 UAW strike, the UAW provides weekly strike assistance of $500 (Monday-Friday), with bonus checks paid for the weeks of Thanksgiving and Christmas. The UAW also offers certain medical benefits, such as medical benefits and benefits for prescription drugs. In order for striking workers to receive UAW’s strike unemployment benefits, they must be in good standing on dues and initiation fees, on active payroll at the onset of the strike and must participate in the strike.
However, while most states bar strikers from receiving unemployment benefits, some do not. With the summer of strikes coming to a close, states like California are an exception. Let’s examine California’s strike unemployment benefits in the next section.
California
Passed the week of Sept. 11, 2023, California Senate Bill 799 would have amended the Unemployment Insurance Code with Section 1262, enabling workers on strike to receive state unemployment benefits after the first two-week period of a trade dispute. However, California Governor Gavin Newsom vetoed the bill.
While the 2023 UAW strike initially took place in the states of Michigan, Missouri and Ohio, the UAW announced on Friday, Sept. 22, that the strikers will expand their walkout in parts distribution centers in 20 states. Of those 20 states, California is included. However, because Senate Bill 799 was vetoed, strikers in the Golden State will still be ineligible for unemployment benefits.
How Employees in the Supply Chain Are Affected by the UAW Strike
Autoworkers aren’t the only employees affected by an industrywide strike. The UAW strike trickles down to other industries that make up the supply chain. Examples of industries that support the automotive sector include steel and aluminum production, electronics and electrical components, rubber and plastics, logistics, energy and utilities, and more. As the strike continues, workers in these industries that are part of the supply chain can face the brunt in several ways, such as:
- Production distribution: As auto workers go on strike, production lines for industries in the supply chain can come to a halt, which can result in reduced work hours, temporary layoffs and potential job losses.
- Financial impact: Employees who experience layoffs, job loss or reduced work hours can face financial hardships due to income loss during the strike, making it difficult to pay bills or loans.
- Uncertainty: As strikes linger, uncertainty can arise for supply chain employees, which can cause stress and challenges with financial planning.
These are some of the many impacts strikes like the UAW strike can have on industries in the supply chain. However, in many cases, employees who face involuntary losses of work are often in the scope of unemployment benefits. For example, steelworkers who work for plants that temporarily close due to decreased car production may experience reduced hours or a temporary layoff. In these cases, these workers not involved with the strike but affected by the strike can often claim unemployment benefits.
Unemployment Law Is Complicated, Working With an Expert Is Crucial
Unemployment law is extremely complicated, which is why employers must work with experts to ensure they remain compliant with unemployment benefits regulations.
With Experian Employer Services’ unemployment cost and claims management, you can gain access to professionals with decades of experience in this nuanced area of expertise. With our trusted team on your side, you can have peace of mind knowing all parts of the unemployment claim process for your business are expertly managed.