Thousands more Mainers filed new applications for unemployment benefits in the first week of 2021 as the economic reverberations of the coronavirus pandemic continued to affect the state’s labor market.

About 3,700 initial claims were filed last week for state unemployment benefits, along with another 700 new claims for federal benefits, the Maine Department of Labor reported Thursday.

Employers are now also paying a new tax to cover administrative costs for the department’s Bureau of Unemployment Compensation, but it will not increase the overall amount of payroll tax employers have to pay, according to the department.

The number of new claims for state benefits was down slightly from the week before but still higher than during any week since mid-July, according to department records.

In total, roughly 4,150 residents filed claims, down from about 4,300 the previous week, it reported. About 41,000 continuing claims for state and federal benefits were filed last week, up slightly from 40,600 a week earlier.

A year ago, about 1,600 initial jobless claims were filed in Maine for the first week in January, along with roughly 7,800 continuing claims.


Nationally, the number unemployment claims soared last week to 965,000, the most since late August and evidence that the resurgent virus has caused a spike in layoffs, The Associated Press reported.

The latest figures for jobless claims, issued Thursday by the U.S. Labor Department, remain at levels never seen until the virus struck. Before the pandemic, weekly applications typically numbered around 225,000, according to the AP.

As of Jan. 1, Maine employers are also subject to a new state tax intended to support the Bureau of Unemployment Compensation. Workers do not have to pay the tax.

The Unemployment Program Administrative Fund was established by a law enacted last year, said Jessica Picard, communications director for the Maine Department of Labor.

A 0.13 percent employer payroll tax was added to supplement dwindling federal funding for the bureau, Picard said.

Administering the program “with steadily declining federal funding resources was creating significant challenges,” she said. “Over time, federal administrative funding has decreased to a level that it no longer supports the delivery of program services.”


Because of low federal funding, there were only 14 claims specialists staffing the bureau last March when a tsunami of unemployment claims overwhelmed the system. It took Maine months to hire enough people to handle tens of thousands of claims, leading to frustrating delays in benefits for many jobless Mainers.

Even though the fund is new, employers will not pay more in state taxes because of it, according to the department. Other contribution rates were lowered to offset the new administrative charge, so the overall level of taxation stays the same, Picard said.

The bureau is expected to raise at least $6 million through the fund, Picard said. If it collects more money than needed to cover administrative costs, the remainder will be deposited into the unemployment trust fund used to pay jobless benefits.

“This was a way to help administer the program, while not impacting employers’ taxes,” Picard said.

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