Demand for unemployment benefits grows as businesses are forced to close during COVID-19 pandemic

WATCH: Demand for unemployment benefits grows as businesses are forced to close during COVID-19 pandemic

SHELBY COUNTY, Tenn. — Unemployment claims are on the rise as more people lose their jobs during the COVID-19 pandemic.

The Tennessee Department of Labor and Workforce Development said it is allocating a third of its employees to processing claims.

FOX13 talked to a department spokesperson about the growing demand for unemployment benefits and found out it could take a while for people to have their claim approved and to receive money.

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The department is slammed right now and people have to meet requirements before they’re approved.

It’s been just a few days since some restaurants and bars closed their doors. Tuesday night all non-essential businesses were ordered to do the same, leaving many people temporarily out of work.

The Tennessee Department of Labor and Workforce Development has seen a surge in the number of people filing unemployment claims this month.

FOX13 spoke with Chris Cannon from the department who said there are 23 American Job Centers sites across the state with two in Memphis. To deal with the demands, employees have switched their attention to processing thousands of claims.

“We had 100 call agents ready to answer phones and to process unemployment claims by shifting the resources from the American Job Center to that job task,” Cannon said. “We are adding another 200 people to that job. That's 1/3 of all the employees at the department.”

There is no concrete number of exactly how many people have filed claims so far this week but in the first week of March, the department’s Unemployment Security Division said it processed 2,031 claims. That number tripled the week of March 8th and 14th with 6,092 new unemployment claims.

Cannon told FOX13 there isn't an estimate of how many people are unemployed in the state right now but he predicted that number will continue to rise.

It’s estimated there are 350,000 people in the hospitality industry without work.

“We do know one of the biggest professions in the industry sector in the state of Tennessee is hospitality. A lot of hotels in Nashville, Memphis, Knoxville - across our state - in Gatlinburg. We are an entertainment destination and we have a lot of hospitality employers across our state," Cannon said.

Cannon said that to receive benefits, applicants must meet the eligibility requirements before approval, which will take time. The most anyone can receive is $275 a week before taxes.

“It is a process and it is important to keep in mind that unemployment benefits is a safety net program, it is not a paycheck,” he said.

Cannon said right now, employers are paying into a trust fund to support the state’s unemployment pot. It’s estimated to have $1.26 billion reserved for these needs. Fox13 asked Cannon if there is a chance that the state unemployment program could run out of that money.

“We have economists looking at different models on where this might go and the amount of people who will be applying for unemployment insurance. Right now those economist tells us the trust fund does look solid and it does look sound but really no one has any idea where this health crisis is going to go and how many people will be out of work,” he said.