IKEA Offered to Reimburse Md. for Unemployment Benefits Paid to Furloughed Workers

The IKEA store in Nottingham. Patch.com photo.

IKEA last month offered to reimburse the state of Maryland for the unemployment benefits the state paid to the retail giant’s furloughed workers during the early days of the COVID-19 pandemic.

The money instead is going to two foundations that are helping Marylanders cope with the public health and economic crises, the company said Wednesday.

In a letter obtained by Maryland Matters that was sent late last month to Gov. Lawrence J. Hogan Jr. (R), IKEA USA President Javier Quiñones outlined the IKEA US Community Foundation’s plans to cover the state’s $2,136,346 in payments to the company’s furloughed workers while the two Maryland stores, in College Park and Nottingham, were closed.

“IKEA Retail U.S. has reopened its stores, and the Foundation, using funds contributed by IKEA Retail U.S., has decided to take the opportunity to ‘pay it forward’ and provide your state with equivalent funds,” Quiñones wrote to Hogan.

It appears as if IKEA is making a similar gesture in other states. According to news accounts, the company has compensated Massachusetts for $1.4 million in unemployment benefits paid to IKEA workers, donated $1.2 million for coronavirus relief in Michigan, and contributed $2 million to a state government initiative to help Virginia residents facing evictions due to the ongoing pandemic.

In his letter to Hogan, Quiñones expresses the hope that the state will use the money “for the greatest public benefit.”

Michael Ricci, a spokesman for Hogan, said administration officials suggested that the retailer get in touch with two area nonprofits, Baltimore’s Promise and the Greater Washington Community Foundation, to discuss how to distribute the $2.1 million.

U.S. Rep. David J. Trone (D-Md.), who learned recently of IKEA’s largesse, suggested in a letter to Hogan Tuesday that the state use the extra money to hire more workers to process unemployment insurance benefits, in an effort to get government aid to needy Marylanders faster.

“This generous donation from IKEA presents the state with a real opportunity to repair and strengthen the faulty unemployment system that millions of Marylanders rely on,” Trone said in a statement provided to Maryland Matters. “We need to take care of every single Marylander impacted by this pandemic, and reinvesting this money is a good place to start.”

But an IKEA spokeswoman said Wednesday that the retailer followed through on Hogan’s recommendations.

“We are returning the amount of unemployment insurance co-workers received from Maryland through payment to Baltimore’s Promise ($1.07 million) and Greater Washington Community Foundation ($1.07 million),” the spokeswoman said.

For now, IKEA’s gesture to Maryland appears to be unique in the state. Ricci said that aside from businesses donating personal protective equipment to the state government, this would be the first significant corporate donation of this type during the pandemic to Maryland or programs the state funds.

“We are appreciative of the ongoing support from the 27 states where IKEA operates stores, including the unemployment funds paid to our co-workers who were furloughed in the early weeks of the pandemic,” the company spokeswoman told Maryland Matters. “People are the heart of our business, and the state unemployment benefits helped IKEA U.S. co-workers during a difficult time.”

The company furloughed approximately 14,000 workers in the U.S. when the stores closed, but all have been invited to return to work.

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(Disclosure: The David and June Trone Family Foundation is a financial supporter of Maryland Matters.)

Josh Kurtz
Co-founder and Editor Josh Kurtz is the leading chronicler of Maryland politics and government. He began covering the State House in 1995 for The Gazette newspapers, and has been writing about state and local politics ever since. He later became an editor at Roll Call, the Capitol Hill newspaper, and spent eight years at E&E News, an online subscription-only publisher of news websites covering energy and environmental issues. For seven of those years, he led a staff of 20 reporters at E&E Daily, which covers energy and environmental policy on Capitol Hill and in national politics. For 6 1/2 years he wrote a weekly column on state politics for Center Maryland and has written for several other Maryland publications as well. Kurtz has given speeches and appeared on TV and radio shows about Maryland politics through the years.