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Colorado Selects Company to Administer Unemployment Benefits for Undocumented Workers

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by Sara Wilson, Colorado Newsline
January 26, 2023

Colorado’s Office of New Americans selected a Denver-based company this week to administer its upcoming wage replacement program for unemployed undocumented workers, putting the state on track to be the first in the country to have an unemployment fund that serves undocumented immigrants.

AidKit will work with the office and supply the necessary technology to host applications, determine eligibility and ultimately distribute funds to Coloradans.

“Undocumented workers play such a critical role in our community and our economy. The pandemic made it clear that without a safety net in place, the whole community suffers,” ONA director Dee Daniels Scrivens said in a statement. “I look forward to working with AidKit to create an accessible, effective and dignified Fund — one that can serve Coloradans for generations to come and serve as a model for the rest of the country.”

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The state’s Benefit Recovery Fund, created last year in a larger unemployment benefits measure, will serve unemployed people regardless of immigration status. It will function similarly to the Unemployment Insurance Fund that covers unemployment benefits, where employers pay a certain amount per employee.

Though Colorado employers have paid roughly $188 million in unemployment insurance premiums over the past ten years on behalf of their undocumented employees, according to the left-of-center Colorado Fiscal Institute, those undocumented immigrants are ineligible for assistance if they lose their jobs.

A portion of those premiums — about $15 million, according to the legislation’s fiscal note — will be diverted to the new Benefit Recovery Fund.

“It’s one of the most basic issues of fairness,” Kathy White, the executive director of CFI, told Colorado Newsline. “We all know that immigrant labor is essential to Colorado’s economy. More than half of these workers have unemployment insurance premiums paid on their wages, just like every other laborer. But because of their work authorization status, they aren’t eligible to claim these federal UI benefits.”

White said CFI has spoken with people in California, New York, New Jersey and Washington about setting up a similar benefit fund.

AidKit will facilitate the direct cash payments to eligible people in the form of same-day bank transfers or reloadable debit cards for people without a bank account.

The company has experience partnering with governments and other organizations for this type of work, including Chicago and Washington D.C. It has also partnered with the Denver Basic Income Project.

The state initially estimated $55 million to build the technology necessary to administer the fund, but using AidKit will cost “tens of millions of dollars less,” according to the Mark Newhouse, the company’s co-founder and chief strategy officer.

AidKit also facilitated the Left Behind Workers Fund in Colorado, which sent about $38 million in direct and rental aid to undocumented people in the wake of job loss due to the COVID-19 pandemic.

“AidKit has experience serving this community,” Newhouse told Colorado Newsline. “We’re very focused on executing this well because we feel like Colorado is the first mover here. The best we can do to support its propagation around the country is to do it well here.”

Applications for the Benefit Recovery Fund are expected to open this summer.

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Colorado Newsline is part of States Newsroom, a network of news bureaus supported by grants and a coalition of donors as a 501c(3) public charity. Colorado Newsline maintains editorial independence. Contact Editor Quentin Young for questions: info@coloradonewsline.com. Follow Colorado Newsline on Facebook and Twitter.