Order Code RS22440
Updated August 5, 2008
Unemployment Compensation (Insurance)
and Military Service
Julie M. Whittaker
Specialist in Income Security
Domestic Social Policy DivisionApril 22, 2010
Congressional Research Service
7-5700
www.crs.gov
RS22440
CRS Report for Congress
Prepared for Members and Committees of Congress
Unemployment Compensation (Insurance) and Military Service
Summary
The Unemployment Compensation (UC) program contains several provisions
relevant to current
and former military service personnel and their families. The UC
program does not provide
benefits for military servicemembers on active duty.
However, former active duty military
personnel (and certain reservists) separated from
active duty may be eligible for Unemployment
Compensation for Ex-Servicemembers
(UCX).
Spouses of military service personnel who voluntarily quit a job to accompany
their spouses on
account of a military transfer may be eligible for UC benefits, based on
the laws of the state
where the civilian spouse was employed.
Military service of
business owners, employees, and employees’ spouses may impact the state
unemployment tax rate that certain employers face. States may choose to create
provisions that
remove or limit these tax increases in certain situations. Individuals
Individuals should contact their state’s unemployment agency to obtain information on how to apply
apply for and receive unemployment benefits based upon military service. The U.S.
Department Department
of Labor maintains a website with links to each state’s agency at
[http://www.workforcesecurity.doleta.gov/map.asp]. .
This report will be updated as
events warrant.
events warrant.
Congressional Research Service
Unemployment Compensation (Insurance) and Military Service
Contents
Unemployment Compensation Benefit Eligibility
for Former Military Personnel
Unemployment Compensation for Ex-Servicemembers (UCX)1 provides income
support while former active duty military personnel or reservists2 released from active
duty search for work. The Emergency Unemployment Compensation Act of 1991 (P.L.
1
Established by the Ex-servicemen’s Unemployment Act of 1958 (P.L. 85-848, 5 U.S.C. §§
8521-8525) in 1958.
2
In this report, the terms reserves or reservists include the Army and Air National Guard and
their servicemembers.
CRS-2
102-164) provides that ex-servicemembers be treated the same as other unemployed
workers with respect to benefit levels, the waiting period for benefits and benefit
duration.3 Military personnel on active duty do not qualify for Unemployment
Compensation 4 (UC) or UCX benefits. The federal government funds these benefits
through the transfers from the appropriate military services’ budgets5 to the
Unemployment Trust Fund6 (UTF) to reimburse the appropriate states for the UCX
benefits distributed to unemployed ex-servicemembers. The DOL projects that for
FY2008, approximately $479 million in UCX benefits will be distributed to former
military personnel.
UCX Eligibility and Benefit Level. Ex-servicemembers generally apply for
UCX benefits in the state where they are searching for employment. UC eligibility
criteria and benefits vary by state. The ex-servicemembers must meet the same criteria
that civilian workers are required to meet for their UC benefit eligibility. Thus, two exservicemembers with the same earnings and work history may qualify for different
amounts of benefits if they file for UCX in different states. The equivalent military
measurement of wages and time in service are used to determine eligibility and benefit
levels.7
If the ex-servicemember was originally in the active duty military, he or she must
have left military service under honorable conditions and either completed a full term of
service or have been released early under a qualifying reason. If the ex-servicemember
was a reservist formerly on active duty, he or she must have been on active duty for at
3
Previously, in 1982, Congress had placed restrictions on benefits for ex-servicemembers (P.L.
97-362). In addition to a number of restrictive eligibility requirements, ex-servicemembers were
required to wait four weeks from the date of their separation from the service before they could
receive benefits. The maximum number of weeks of benefits an ex-servicemember could receive
based on employment in the military was 13 (as compared with 26 weeks under the regular UC
program for civilian workers).
4
In law, this program is called the Unemployment Compensation program. However, it is
commonly referred to as the Unemployment Insurance program, reflecting its social insurance
design. See CRS Report RL33362, Unemployment Insurance: Available Benefits and Legislative
Activity, by Julie M. Whittaker, for information on the UC program.
5
For example, if a former naval officer claimed UCX benefits, the Navy would transfer funds
into the UTF to pay for those benefits.
6
For details on the Unemployment Trust Fund, see CRS Report RS22077, Unemployment
Compensation (UC) and the Unemployment Trust Fund (UTF): Funding UC Benefits, by
Christine Scott and Julie Whittaker
7
The state in which the former servicemember files for a claim determines the UCX benefit level
and duration. The weekly and maximum amounts of UCX payable to an individual under the
UCX program are determined under the applicable state laws. The UCX benefit is required to
be the same amount, on the same terms, and subject to the same conditions as the state UC which
would be payable to the individual under the applicable state law. The individual’s federal
military service and federal military wages are assigned or transferred as employment and wages
covered by that state law, subject to the use of the applicable Schedule of Remuneration. That
is, for claims purposes, military wages are determined by the pay grade at separation from
military service. A wage table is provided by the federal government and then is equated to
civilian wages for each military pay grade.
CRS-3
least 90 continuous days. UCX benefits are not payable during periods in which the
ex-servicemember is eligible to receive certain allowances or educational assistance
allowances from the Survivors’ and Dependents’ Educational Assistance Program or the
Department of Veterans’ Affairs Vocational Rehabilitation and Education Program.
Participation in the Montgomery GI bill does not preclude receipt of UCX benefits;
however, having student status does limit UC benefit eligibility in most states and these
limitations would extend to those workers receiving UCX benefits. Many states exclude
workers while they attend school and some states include vacation periods in that
exclusion.
Self-Employed and Sole Proprietor Ex-Servicemembers. When an exservicemember was previously self-employed or was a sole-proprietor, the worker would
have been excluded from receiving UC benefits. After active duty, if the exservicemember is unemployed, the ex-servicemember would qualify for UCX benefits
based on military service. However, most states require that the worker be searching for
employment and would not cover a worker who was reestablishing self-employment or
a small business.
UCX Financing. The UCX benefit is funded by the federal government through
its federal account in the Unemployment Trust Fund (UTF)8. Each state is reimbursed by
the federal government for each unemployed worker whose base period wages included
federal military wages.
Civilian Spouses Who Quit Employment Because of
Military Spouse Transfers
Civilian spouses who quit their employment because their military spouse was
transferred generally will not qualify for UC benefits. Most state UC programs do not
award UC benefits to workers who quit their jobs because a spouse was transferred,
deeming this as a “voluntary quit.” The laws of several states — Colorado, Maryland,
Massachusetts, North Carolina, and Texas — include a specific disqualification for
claimants who quit work to relocate with a spouse.
In several states, the disqualification following a “voluntary quit” continues until the
claimant returns to work, completes a specified duration of work, and earns wages of a
specified amount. In other states, the disqualification is time-limited. These states
penalize the worker for quitting, but recognize that economic conditions may be such that
even a person who diligently seeks work may find none. The reasoning is that beyond a
certain point, if a diligent job seeker is still unemployed, such continuing unemployment
is attributable to labor market conditions, rather than their decision to quit. Thus, spouses
relocating to areas of high unemployment or limited opportunities may become eligible
for benefits, even if initially disqualified.
Transferred Spouse Exception (Unconditional on Military Service).
Twelve states allow workers who quit because of their spouse’s job transfer to receive UC
8
See CRS Report RS22077, Unemployment Compensation (UC) and the Unemployment Trust
Fund (UTF): Funding UC Benefits, by Christine Scott and Julie M. Whittaker, for an explanation
of how funds are transferred.
CRS-4
benefits. Table 1 lists these states, designating them in the column labeled “Spouse
Transfer” with a “Y.”
Military Spouse Exception. In addition to the 12 states allowing UC benefits
if a worker quits to accompany a spouse who has been transferred, 14 states have special
exceptions for workers who quit to join their transferred military spouse. These
exceptions are labeled as “Military only” in Table 1. Thus, a total of 26 states allow the
civilian spouse of a transferred military servicemember to receive UC benefits.
Table 1. Unemployment Compensation Benefit Eligibility for
Workers Who Voluntarily Quit Because of a Spousal Transfer
State
Alabama
Alaska
Arizona
Arkansas
California
Colorado
Connecticut
Delaware
District of Columbia
Florida
Georgia
Hawaii
Idaho
Illinois
Indiana
Iowa
Kansas
Kentucky
Louisiana
Maine
Maryland
Massachusetts
Michigan
Minnesota
Mississippi
Missouri
Spouse Transfer
Y
Y
Military only
Y
Military only
Military only
Military only
Military only
Y
Y
Y
Military only
Military only
State
Montana
Nebraska
Nevada
New Hampshire
New Jersey
New Mexico
New York
North Carolina
North Dakota
Ohio
Oklahoma
Oregon
Pennsylvania
Rhode Island
South Carolina
South Dakota
Tennessee
Texas
Utah
Vermont
Virginia
Washington
West Virginia
Wisconsin
Wyoming
Spouse Transfer
Military only
Y
Military only
Military only
Military only
Y
Military only
Y
Y
Y
Military only
Military only
Y
Source: CRS compilation from Comparison of State Unemployment Insurance Laws, 2008 (and errata),
and interim updates, U.S. Department of Labor, Employment and Training Administration, Office of
Workforce Security. Additional requirements may be imposed to qualify for these exceptions. Maryland’s
coverage began on June 1, 2008. Illinois’s coverage began July 16, 2008.
CRS-5
Impact of Miliary Service on Employers’
State Unemployment Taxes
State unemployment taxes are levied on employers based on a combination of
established rates and the employer’s past history of its workers using the UC system.
Generally, employers with a greater history of unemployed workers would have a worse
experience rating and would pay higher state unemployment taxes. Military service of
business owners or employees may impact the tax rate that certain employers face.
Furthermore, if workers who quit to join their transferred military spouse receive UC
benefits, this may impact the overall state unemployment tax burden of most, if not all,
of the state’s employers.
!
!
!
A business owner, if called up for active military service, may need to
layoff some or all of the business’s workers. Once the business owner
returns from military service, the revival of the business may mean that
the small business may face a new, higher state unemployment tax rate.
If the servicemember serves for less than two years, some of the worker’s
UCX benefit may be based on nonmilitary work. (These workers receive
a hybrid UC/UCX benefit.) In some states, their former (civilian)
employers may face a state unemployment tax increase as a result.
Workers who quit their jobs and move to accompany their military
spouse may receive UC benefits in 23 states. These states do not charge
UC benefits to employer accounts when workers voluntarily quit their
jobs to accompany a transferred military spouse. The benefits paid to a
worker accompanying a military spouse generally would not increase the
state unemployment taxes of the worker’s former employer. However,
these benefits are still charged to the state’s account within the UTF. As
a result, the cost of the benefits are passed onto the state’s employers as
a socialized cost and may increase the overall state unemployment tax
rate.
States may choose to create provisions that remove or limit these tax increases in
certain situations. For example:
!
!
!
In Illinois, business owners who are called to active duty from the reserve
and had to close their firms are not charged for the increases attributable
to UC benefits for the workers who lose their jobs on account of the
closure. When the business owner returns and reopens his or her
business, the business’s state unemployment tax rate is not increased.
In Texas, if an employee was called to active military service but then
qualifies for UC benefits, the employer does not face a higher state
unemployment tax rate. This is even if a portion of the UC/UCX benefit
is based on the former employee’s earnings at the previous employer.
Maine, South Dakota, Virginia, and Wyoming provide for the noncharging of benefits for unemployment directly resulting from
reinstatement of another employee upon his or her completion of
uniformed service duty. for Former Military Personnel.........................1
UCX Eligibility and Benefit Level ........................................................................................1
Self-Employed and Sole Proprietor Ex-Servicemembers .................................................2
UCX Financing.....................................................................................................................2
Civilian Spouses Who Quit Employment Because of Military Spouse Transfers ..........................2
Transferred Spouse Exception (Unconditional on Military Service) .......................................3
Military Spouse Exception ....................................................................................................3
Impact of Military Service on Employers’ State Unemployment Taxes ........................................4
Tables
Table 1. Unemployment Compensation Benefit Eligibility for Workers Who Voluntarily
Quit Because of a Spousal Transfer ..........................................................................................4
Contacts
Author Contact Information ........................................................................................................5
Congressional Research Service
Unemployment Compensation (Insurance) and Military Service
Unemployment Compensation Benefit Eligibility
for Former Military Personnel
Unemployment Compensation for Ex-Servicemembers (UCX)1 provides income support while
former active duty military personnel or reservists2 released from active duty search for work.
The Emergency Unemployment Compensation Act of 1991 (P.L. 102-164) provides that exservicemembers be treated the same as other unemployed workers with respect to benefit levels,
the waiting period for benefits, and benefit duration.3
Once entitlement to regular unemployment benefits are exhausted, ex-servicemembers may
qualify for both Emergency Unemployment Compensation (EUC08) and the Extended Benefit
(EB) payments. 4 All benefits (UCX, EUC08, and EB) are temporarily augmented by the weekly
$25 Federal Additional Compensation (FAC) payment.
The federal government funds these benefits through the transfers from the appropriate military
services’ budgets5 to the Unemployment Trust Fund6 (UTF) to reimburse the appropriate states
for the UCX benefits distributed to unemployed ex-servicemembers. For the 12 month period
ending March 2010, approximately $1,185 million in unemployment benefits (UCX, EUC08, EB,
and the $25 FAC) were distributed to former military personnel.
Military personnel on active duty do not qualify for regular state Unemployment Compensation
(UC) or UCX benefits because they are considered to be working.
UCX Eligibility and Benefit Level
Ex-servicemembers generally apply for UCX benefits in the state where they are searching for
employment. UC eligibility criteria and benefits vary by state. The ex-servicemembers must meet
the same criteria that civilian workers are required to meet for their UC benefit eligibility. Thus,
two ex-servicemembers with the same earnings and work history may qualify for different
amounts of benefits if they file for UCX in different states. The equivalent military measurement
of wages and time in service are used to determine eligibility and benefit levels. 7
1
2
Established by the Ex-servicemen’s Unemployment Act of 1958 (P.L. 85-848, 5 U.S.C. §§ 8521-8525) in 1958.
In this report, the terms reserves or reservists include the Army and Air National Guard and their servicemembers.
3
Previously, in 1982, Congress had placed restrictions on benefits for ex-servicemembers (P.L. 97-362). In addition to
a number of restrictive eligibility requirements, ex-servicemembers were required to wait four weeks from the date of
their separation from the service before they could receive benefits. The maximum number of weeks of benefits an exservicemember could receive based on employment in the military was 13 (as compared with 26 weeks under the
regular UC program for civilian workers).
4
For information on the EUC08 benefit, see CRS Report RS22915, Temporary Extension of Unemployment Benefits:
Emergency Unemployment Compensation (EUC08), by Katelin P. Isaacs, Julie M. Whittaker, and Alison M. Shelton.
For information on the Extended Benefit program, see CRS Report RL33362, Unemployment Insurance: Available
Unemployment Benefits and Legislative Activity, by Julie M. Whittaker, Alison M. Shelton, and Katelin P. Isaacs.
5
For example, if a former naval officer claimed UCX benefits, the Navy would transfer funds into the UTF to pay for
those benefits.
6
For details on the Unemployment Trust Fund, see CRS Report RS22077, Unemployment Compensation (UC) and
the Unemployment Trust Fund (UTF): Funding UC Benefits, by Julie M. Whittaker and Kathleen Romig.
7
The state in which the former servicemember files for a claim determines the UCX benefit level and duration. The
(continued...)
Congressional Research Service
1
Unemployment Compensation (Insurance) and Military Service
If the ex-servicemember was originally in the active duty military, he or she must have left
military service under honorable conditions and either completed a full term of service or have
been released early under a qualifying reason. If the ex-servicemember was a reservist formerly
on active duty, he or she must have been on active duty for at least 90 continuous days. UCX
benefits are not payable during periods in which the ex-servicemember is eligible to receive
certain allowances or educational assistance allowances from the Survivors’ and Dependents’
Educational Assistance Program or the Department of Veterans’ Affairs Vocational Rehabilitation
and Education Program. Participation in the Montgomery GI bill does not preclude receipt of
UCX benefits; however, having student status does limit UC benefit eligibility in most states and
these limitations would extend to those workers receiving UCX benefits. Many states exclude
workers while they attend school and some states include vacation periods in that exclusion.
Self-Employed and Sole Proprietor Ex-Servicemembers
When an ex-servicemember was previously self-employed or was a sole-proprietor, the worker
would have been excluded from receiving UC benefits. After active duty, if the ex-servicemember
is unemployed, the ex-servicemember would qualify for UCX benefits based on military service.
However, most states require that the worker be searching for employment and would not cover a
worker who was reestablishing self-employment or a small business. 8
UCX Financing
The UCX benefit is funded by the federal government through its federal account in the
Unemployment Trust Fund (UTF)9. Each state is reimbursed by the federal government for each
unemployed worker whose base period wages included federal military wages.
Civilian Spouses Who Quit Employment Because of
Military Spouse Transfers
Civilian spouses who quit their employment because their military spouse was transferred may
not qualify for UC benefits. Many state UC programs do not award UC benefits to workers who
(...continued)
weekly and maximum amounts of UCX payable to an individual under the UCX program are determined under the
applicable state laws. The UCX benefit is required to be the same amount, on the same terms, and subject to the same
conditions as the state UC that would be payable to the individual under the applicable state law. The individual’s
federal military service and federal military wages are assigned or transferred as employment and wages covered by
that state law, subject to the use of the applicable Schedule of Remuneration. That is, for claims purposes, military
wages are determined by the pay grade at separation from military service. A wage table is provided by the federal
government to calculate the equivalent civilian wages for each military pay grade.
8
An exception to this are those states that offer a Self-Employment Assistance (SEA) program. Eight states have active
SEA programs: Delaware, Maine, Maryland, New Jersey, New York, Oregon, Pennsylvania, and Washington.
Individuals enrolled in an SEA program receive weekly allowances. These allowances are the same as the individual’s
regular unemployment weekly benefit amount. Participants engaged full-time in activities relating to the establishment
of a business and becoming self-employed are considered to be unemployed. Provisions of state law relating to
availability for work, search for work, and refusal to accept work do not apply to these participants.
9
See CRS Report RS22077, Unemployment Compensation (UC) and the Unemployment Trust Fund (UTF):
Funding UC Benefits, by Julie M. Whittaker and Kathleen Romig, for an explanation of how funds are transferred.
Congressional Research Service
2
Unemployment Compensation (Insurance) and Military Service
quit their jobs because a spouse was transferred, deeming this as a “voluntary quit.” The laws of
three states (Maryland, Ohio, and Texas) go further and include a specific disqualification for
claimants who quit work to relocate with a spouse until certain additional income is generated.
However, Maryland and Texas both exempt military spouses from this disqualification.
The disqualification following a “voluntary quit” continues until the claimant returns to work,
completes a specified duration of work, and earns wages of a specified amount. In other states,
the disqualification is time-limited. These states penalize the worker for quitting, but recognize
that economic conditions may be such that even a person who diligently seeks work may find
none. The reasoning is that beyond a certain point, if a diligent job seeker is still unemployed,
such continuing unemployment is attributable to labor market conditions rather than their
decision to quit. Thus, spouses relocating to areas of high unemployment or limited opportunities
may become eligible for benefits even if initially disqualified.
Transferred Spouse Exception (Unconditional on Military Service)
Twenty-three states allow workers who quit because of their spouse’s job transfer to receive UC
benefits. Table 1 lists these states, designating them in the column labeled “Spouse Transfer”
with a “Y.”
Military Spouse Exception
In addition to the 23 states allowing UC benefits if a worker quits to accompany a spouse who has
been transferred, 15 states have special exceptions for workers who quit to join their transferred
military spouse. These exceptions are labeled as “Military only” or “Federal spouse” in Table 1 .
Thus, a total of 38 states allow the civilian spouse of a transferred military servicemember to
receive UC benefits.
Congressional Research Service
3
Unemployment Compensation (Insurance) and Military Service
Table 1. Unemployment Compensation Benefit Eligibility for Workers Who
Voluntarily Quit Because of a Spousal Transfer
State
Spouse Transfer
Alabama
State
Spouse Transfer
Montana
Military only
Alaska
Y
Nebraska
Y
Arizona
Y
Nevada
Y
Arkansas
Y
New Hampshire
Y
California
Y
New Jersey
Military only
Colorado
Y
New Mexico
Military only
Connecticut
Y
New York
Y
Delaware
Y
North Carolina
Y
District of Columbia
Military only
North Dakota
Florida
Military only
Ohio
Georgia
Military only
Oklahoma
Y
Hawaii
Y
Oregon
Y
Pennsylvania
Y
Idaho
Illinois
Y
Rhode Island
Indiana
Y
South Carolina
Iowa
Military only
South Dakota
Kansas
Y
Kentucky
Military only
Louisiana
Tennessee
Texas
Utah
Maine
Y
Maryland
Military only
Massachusetts
Y
Michigan
Military only
Vermont
Virginia
Washington
Military only
Y
West Virginia
Minnesota
Y
Wisconsin
Mississippi
Military only
Wyoming
Missouri
Military only
Military only
Federal spouse only
Source: CRS compilation from Comparison of State Unemployment Insurance Laws, 2010 (and errata), and interim
updates, U.S. Department of Labor, Employment and Training Administration, Office of Workforce Security.
Additional requirements may be imposed to qualify for these exceptions.
Impact of Military Service on Employers’ State
Unemployment Taxes
State unemployment taxes are levied on employers based on a combination of established rates
and the employer’s past history of its workers using the UC system. Generally, employers with a
Congressional Research Service
4
Unemployment Compensation (Insurance) and Military Service
greater history of unemployed workers would have a worse experience rating and would pay
higher state unemployment taxes. Military service of business owners or employees may impact
the tax rate that certain employers face. Furthermore, if workers who quit to join a transferred
military spouse receive UC benefits, this may impact the overall state unemployment tax burden
of most, if not all, of the state’s employers. Below are some examples of these situations.
•
A business owner, if called up for active military service, may need to lay off
some or all of the business’s workers. Once the business owner returns from
military service, the revival of the business may mean that the small business
may face a new, higher state unemployment tax rate.
•
If the servicemember serves for less than two years, some of the worker’s UCX
benefit may be based on nonmilitary work. (These workers receive a hybrid
UC/UCX benefit.) In some states, their former (civilian) employers may face a
state unemployment tax increase as a result.
•
Workers who quit their jobs and move to accompany their military spouse may
receive UC benefits in 38 states. These states do not charge UC benefits to
employer accounts when workers voluntarily quit their jobs to accompany a
transferred military spouse. The benefits paid to a worker accompanying a
military spouse generally would not increase the state unemployment taxes of the
worker’s former employer. However, these benefits are still charged to the state’s
account within the UTF. As a result, the cost of the benefits are passed on to the
state’s employers as a socialized cost and may increase the overall state
unemployment tax rate.
States may choose to create provisions that remove or limit these tax increases in certain
situations. For example:
•
In Illinois, business owners who are called to active duty from the reserve and
had to close their firms are not charged for the increases attributable to UC
benefits for the workers who lose their jobs on account of the closure. When the
business owner returns and reopens his or her business, the business’s state
unemployment tax rate is not increased.
•
In Texas, if an employee was called to active military service but then qualifies
for UC benefits, the employer does not face a higher state unemployment tax
rate.
•
Maine, South Dakota, Montana, Virginia, Washington, and Wyoming provide for
the non-charging of benefits for unemployment directly resulting from
reinstatement of another employee upon his or her completion of uniformed
service duty.
Author Contact Information
Julie M. Whittaker
Specialist in Income Security
jwhittaker@crs.loc.gov, 7-2587
Congressional Research Service
5