Unemployment Insurance: Legislative Issues in the 116th Congress

Unemployment Insurance: Legislative Issues in January 29, 2019
the 116th Congress
Julie M. Whittaker
The 116th the 116^th Congress Updated March 28, 2019 (R45478) Jump to Main Text of Report

Contents

• Overview of Unemployment Insurance Programs
• Unemployment Compensation Program
• UC Financing
• Unemployment Insurance Benefits and the Sequester
• FY2019 Sequester of Unemployment Insurance Benefits
• Unemployment Insurance and the Recent Partial Government Shutdown
• State UC Loans and Solvency Concerns
• Reemployment Services and Eligibility Assessments
• President's Budget Proposal for FY2020
• New Minimum Account Balance for State UTF Accounts
• Paid Family Leave Benefit
• UI Program Integrity
• Requirements to Use Particular Data Sources for Program Integrity
• Additional Integrity Proposals
• 2018 DOL Proposed Rule on UC Drug Testing
• Legislative Proposals in the 116^th Congress
• Unemployment Compensation for Excepted Federal Employees During a Government Shutdown
• Self-Employment and Relocation Assistance Benefits
• Reemployment Services and Eligibility Assessments

Appendixes

• Appendix. Extended Benefit Program

Summary

The 116^th Congress has begun to consider several issues related to two programs in the Congress has begun to consider several issues related to two programs in the
Specialist in Income
unemployment insurance (UI) system: Unemployment Compensation (UC) and Unemployment unemployment insurance (UI) system: Unemployment Compensation (UC) and Unemployment
Security
Compensation for Federal Employees (UCFE). The lapse in federal appropriations that occurred Compensation for Federal Employees (UCFE). The lapse in federal appropriations that occurred

from December 22, 2018, to January 25, 2019, created a partial government shutdown. As a from December 22, 2018, to January 25, 2019, created a partial government shutdown. As a
Katelin P. Isaacs
result, agencies without funding furloughed many federal employees; and many federal result, agencies without funding furloughed many federal employees; and many federal
Specialist in Income
employees excepted from furlough were working without pay during the lapse in appropriations. employees excepted from furlough were working without pay during the lapse in appropriations.
Security
Furloughed federal employees may be eligible for UCFE benefits. Private sector workers who are Furloughed federal employees may be eligible for UCFE benefits. Private sector workers who are

furloughed or laid off due to the partial government shutdown because they were employed by furloughed or laid off due to the partial government shutdown because they were employed by
government contractors may be eligible for regular UC benefits. But, according to guidance from government contractors may be eligible for regular UC benefits. But, according to guidance from

the U.S. Department of Labor (DOL), excepted federal employees who are performing services the U.S. Department of Labor (DOL), excepted federal employees who are performing services
(without pay) would generally be ineligible for UCFE benefits based on states(without pay) would generally be ineligible for UCFE benefits based on states’' definitions of definitions of “"unemployment.unemployment.”" In this In this
climate, there has been congressional interest in assisting furloughed and excepted federal employees through the UI system.climate, there has been congressional interest in assisting furloughed and excepted federal employees through the UI system.
UI legislative issues currently facing the UI legislative issues currently facing the 116th116^th Congress include the following: Congress include the following:
 the effects of the FY2019 sequester order on UI programs and benefits,the effects of the FY2019 sequester order on UI programs and benefits,
 the role of UI in providing temporary income replacement during a government shutdown,the role of UI in providing temporary income replacement during a government shutdown,
 state fiscal concerns related to financing UC benefits,state fiscal concerns related to financing UC benefits,


reemployment services and eligibility assessments (RESEA),

potential consideration of the UI proposals included in the Presidentpotential consideration of the UI proposals included in the President’s FY2019's FY2020 budget, and budget, and
 congressional oversight related to a proposed UC drug testing rule reissued by DOL after previously being congressional oversight related to a proposed UC drug testing rule reissued by DOL after previously being
disapproved using the Congressional Review Act.disapproved using the Congressional Review Act.
Thus far in the 116thIn the 116^th Congress, policymakers have introduced legislation related to UCFE benefits in response to the recent Congress, policymakers have introduced legislation related to UCFE benefits in response to the recent
partial government shutdown (S. 165partial government shutdown (S. 165, , H.R. 720H.R. 720, , and H.R. 725H.R. 725), and H.R. 1117), , and legislation to provide self-employment and relocation legislation to provide self-employment and relocation
assistance benefits (S. 136 and assistance benefits (S. 136 and H.R. 556), and legislation to amend Title III of the Social Security Act to extend RESEA to all UC claimants (H.R. 1759).

For a brief overview of UC, see CRS In Focus IF10336, The Fundamentals of Unemployment Compensation, The Fundamentals of Unemployment Compensation.

TH.R. 556).
For a brief overview of UC, see CRS In Focus IF10336, The Fundamentals of Unemployment Compensation.
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Contents
Overview of Unemployment Insurance Programs .......................................................................... 1
Unemployment Compensation Program ................................................................................... 1
UC Financing ...................................................................................................................... 2
Unemployment Insurance Benefits and the Sequester .................................................................... 2
FY2019 Sequester of Unemployment Insurance Benefits ........................................................ 3
Unemployment Insurance and the Recent Partial Government Shutdown ..................................... 3
State UC Loans and Solvency Concerns ......................................................................................... 5
President’s Budget Proposal for FY2019 ........................................................................................ 5
New Minimum Account Balance for State UTF Accounts ....................................................... 6
Mandatory RESEA Services ..................................................................................................... 6
Paid Family Leave Benefit ........................................................................................................ 6
UI Program Integrity ................................................................................................................. 7
Requirements to Use Particular Data Sources for Program Integrity ................................. 7
Additional Integrity Proposals ............................................................................................ 7
2018 DOL Proposed Rule on UC Drug Testing .............................................................................. 7
Legislative Proposals in the 116th Congress .................................................................................... 9
Unemployment Compensation for Excepted Federal Employees During a
Government Shutdown .......................................................................................................... 9
Self-Employment and Relocation Assistance Benefits ............................................................. 9

Appendixes
Appendix. Extended Benefit (EB) Program ................................................................................... 11

Contacts
Author Information ....................................................................................................................... 12
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he unemployment insurance (UI) system has two primary objectives: (1) to provide he unemployment insurance (UI) system has two primary objectives: (1) to provide
temporary, partial wage replacement for involuntarily unemployed workers and (2) to temporary, partial wage replacement for involuntarily unemployed workers and (2) to
T stabilize the economy during recessions. In support of these goals, several UI programs stabilize the economy during recessions. In support of these goals, several UI programs
provide benefits for eligible unemployed workers.provide benefits for eligible unemployed workers.
Overview of Unemployment Insurance Programs
In general, when eligible workers lose their jobs, the joint federal-state Unemployment In general, when eligible workers lose their jobs, the joint federal-state Unemployment
Compensation (UC) program may provide up to 26 weeks of income support through regular UC Compensation (UC) program may provide up to 26 weeks of income support through regular UC
benefit payments. UC benefits may be extended for up to 13 weeks or 20 weeks by the Extended benefit payments. UC benefits may be extended for up to 13 weeks or 20 weeks by the Extended
Benefit (EB) program if certain economic situations exist within the state.Benefit (EB) program if certain economic situations exist within the state.11 As of the date of this As of the date of this
publication, although both the UC and EB programs are authorized, no state is in an active EB publication, although both the UC and EB programs are authorized, no state is in an active EB
period.period.22 For an overview of EB, For an overview of EB, see the Appendix.
Unemployment Compensation Program
The Social Security Act of 1935 (P.L. 74-271) authorizes the joint federal-state UC program to The Social Security Act of 1935 (P.L. 74-271) authorizes the joint federal-state UC program to
provide unemployment benefits. Most states provide up to a maximum of 26 weeks of UC provide unemployment benefits. Most states provide up to a maximum of 26 weeks of UC
benefits.benefits.33 Former federal workers may be eligible for unemployment benefits through the Former federal workers may be eligible for unemployment benefits through the
Unemployment Compensation for Federal Employees (UCFE) program.Unemployment Compensation for Federal Employees (UCFE) program.44 Former U.S. military Former U.S. military
servicemembers may be eligible for unemployment benefits through the Unemployment servicemembers may be eligible for unemployment benefits through the Unemployment
Compensation for Ex-Compensation for Ex-servicemembersServicemembers (UCX) program. (UCX) program.55 The Emergency Unemployment The Emergency Unemployment
Compensation Act of 1991 (P.L. 102-164) provides that ex-servicemembers be treated the same Compensation Act of 1991 (P.L. 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 as other unemployed workers with respect to benefit levels, the waiting period for benefits, and
benefit duration.benefit duration.
Although federal laws and regulations provide broad guidelines on UC benefit coverage, Although federal laws and regulations provide broad guidelines on UC benefit coverage,
eligibility, and determination, the specifics regarding UC benefits are determined by each state. eligibility, and determination, the specifics regarding UC benefits are determined by each state.
This results in essentially 53 different programs.This results in essentially 53 different programs.66 Generally, UC eligibility is based on attaining Generally, UC eligibility is based on attaining
qualified wages and employment in covered work over a 12-month period (called a base period)

1 For detailed information on each of these programs, see CRS Report RL33362, Unemployment Insurance: Programs
and Benefits. Certain groups of workers may qualify for income support from additional unemployment insurance (UI)
programs, including Trade Adjustment Assistance (TAA), Reemployment Trade Adjustment Assistance (RTAA), and
Disaster Unemployment Assistance (DUA). Workers who lose their jobs because of international competition may
qualify for income support through the TAA program or the RTAA (for certain workers aged 50 or older). Workers
may be eligible to receive DUA benefits if they are not eligible for regular Unemployment Compensation (UC) and
their unemployment may be directly attributed to a declared natural disaster. More information on the TAA and RTAA
programs are in CRS Report R42012, Trade Adjustment Assistance for Workers. (The report is out of print, but is
available to congressional clients from the author upon request.)
2 For information on the expired Emergency Unemployment Compensation 2008 (EUC08) program, which provided
additional unemployment benefits depending on state economic conditions from July 2008 to December 2013, see CRS
Report R42444, Emergency Unemployment Compensation (EUC08): Status of Benefits Prior to Expiration.
3 For more details on these states with less than 26 weeks of UC available, see CRS Report R41859, Unemployment
Insurance: Consequences of Changes in State Unemployment Compensation Laws. In addition, the maximum UC
duration is 28 weeks in Montana and 30 weeks in Massachusetts. When EB benefits are available, any available UC
benefits above 26 weeks are treated effectively as if they were EB payments.
4 5 U.S.C. §§8501-8508.
5 5 U.S.C. §§8521-8525. For more information on the Unemployment Compensation for Ex-servicemembers (UCX)
program, see CRS Report RS22440, Unemployment Compensation (Insurance) and Military Service.
6 The District of Columbia, Puerto Rico, and the Virgin Islands are considered to be states under UC law.
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qualified wages and employment in covered work over a 12-month period (called a base period) prior to unemployment. All states require a worker to have earned a certain amount of wages or to prior to unemployment. All states require a worker to have earned a certain amount of wages or to
have worked for a certain period of time (or both) within the base period to be eligible to receive have worked for a certain period of time (or both) within the base period to be eligible to receive
any UC benefits. The methods states use to determine eligibility vary greatly. Most state benefit any UC benefits. The methods states use to determine eligibility vary greatly. Most state benefit
formulas replace approximately half of a claimantformulas replace approximately half of a claimant’'s average weekly wage up to a weekly s average weekly wage up to a weekly
maximum.maximum.77 Additionally, each state Additionally, each state’'s UC law requires individuals to have lost their jobs through s UC law requires individuals to have lost their jobs through
no fault of their own, and recipients must be able to work, available for work, and actively no fault of their own, and recipients must be able to work, available for work, and actively
seeking work.seeking work.88 These eligibility requirements help ensure that UC benefits are directed toward These eligibility requirements help ensure that UC benefits are directed toward
workers with significant labor market experience and who are unemployed because of economic workers with significant labor market experience and who are unemployed because of economic
conditions.conditions.
UC Financing
The UC program is financed by federal taxes under the Federal Unemployment Tax The UC program is financed by federal taxes under the Federal Unemployment Tax Act9Act⁹ (FUTA) (FUTA)
and by state payroll taxes under each stateand by state payroll taxes under each state’'s State Unemployment Tax Act (SUTA). The 0.6% s State Unemployment Tax Act (SUTA). The 0.6%
effective net FUTA tax paid by employers on the first $7,000 of each employeeeffective net FUTA tax paid by employers on the first $7,000 of each employee’'s earnings s earnings
(equaling no more than $42 per worker per year) funds federal and state administrative costs, (equaling no more than $42 per worker per year) funds federal and state administrative costs,
loans to insolvent state UC accounts, the federal share (50%) of EB payments, and state loans to insolvent state UC accounts, the federal share (50%) of EB payments, and state
employment services.employment services.10
10 SUTA taxes on employers are limited by federal law to funding regular UC benefits and the state SUTA taxes on employers are limited by federal law to funding regular UC benefits and the state
share (50%) of EB payments. Federal law requires that the state tax be on share (50%) of EB payments. Federal law requires that the state tax be on at least the first $7,000 the first $7,000
of each employeeof each employee’'s earnings and that the maximum state tax rate be at least 5.4%. Federal law s earnings and that the maximum state tax rate be at least 5.4%. Federal law
also requires each employeralso requires each employer’'s state tax rate to be based on the amount of UC paid to former s state tax rate to be based on the amount of UC paid to former
employees (known as employees (known as “"experience ratingexperience rating”"). Within these broad requirements, each state has great ). Within these broad requirements, each state has great
flexibility in determining its SUTA structure. Generally, the more UC benefits paid out to its flexibility in determining its SUTA structure. Generally, the more UC benefits paid out to its
former employees, the higher the tax rate of the employer, up to a maximum established by state former employees, the higher the tax rate of the employer, up to a maximum established by state
law. Funds from FUTA and SUTA are deposited in the appropriate accounts within the law. Funds from FUTA and SUTA are deposited in the appropriate accounts within the
Unemployment Trust Fund (UTF).Unemployment Trust Fund (UTF).
Unemployment Insurance Benefits and
the Sequester
the Sequester The sequester order required by the Budget Control Act of 2011 (BCA; P.L. 112-25) and The sequester order required by the Budget Control Act of 2011 (BCA; P.L. 112-25) and
implemented on March 1, 2013 (after being delayed by P.L. 112-240implemented on March 1, 2013 (after being delayed by P.L. 112-240), affected some but not all types of UI expenditures.¹¹), affected some but not all

7 For details on UC eligibility and benefits, see CRS Report RL33362, Unemployment Insurance: Programs and
Benefits.
8 In some cases a worker may be eligible for benefit based upon quitting a job for a “good cause” reason. In all states,
individuals who leave their work voluntarily must meet the state’s good cause requirements if they are not to be
disqualified from receiving UC. In many states, good cause is explicitly restricted to reasons connected with the work,
attributable to the employer, or involving fault on the part of the employer. (For those states, see Table 5.5 in U.S.
Department of Labor (DOL), 2017 Comparison of State Unemployment Insurance Laws, available at
https://workforcesecurity.doleta.gov/unemploy/pdf/uilawcompar/2017/nonmonetary.pdf.)
9 23 U.S.C. §§3301-11.
10 The Federal Unemployment Tax Act (FUTA) imposes a 6.0% gross tax rate on the first $7,000 paid annually by
employers to each employee. Employers in states with programs approved by the federal government and with no
delinquent federal loans may credit 5.4 percentage points against the 6.0% tax rate, making the minimum net federal
unemployment tax rate 0.6%. Details on how delinquent loans affect the net FUTA tax are in CRS Report RS22954,
The Unemployment Trust Fund (UTF): State Insolvency and Federal Loans to States.
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types of UI expenditures.11 Regular UC, UCX, and UCFE payments are not subject to the Regular UC, UCX, and UCFE payments are not subject to the
sequester reductions. EB,sequester reductions. EB,1212 and most forms of administrative funding and most forms of administrative funding, are subject to the sequester are subject to the sequester
reductions.reductions.13
13 FY2019 Sequester of Unemployment Insurance Benefits
The FY2019 sequestration order requires a 6.2% reduction in all nonexempt nondefense The FY2019 sequestration order requires a 6.2% reduction in all nonexempt nondefense
mandatory expenditures, but no sequestration reductions are applicable to discretionary programs, mandatory expenditures, but no sequestration reductions are applicable to discretionary programs,
projects, and activities.projects, and activities.1414 As a result, EB expenditures are required to be reduced 6.2% (only on As a result, EB expenditures are required to be reduced 6.2% (only on
the federal share of EB benefits) for weeks of unemployment during FY2019.the federal share of EB benefits) for weeks of unemployment during FY2019.1515 As of January 22, As of January 22,
2019, EB has not been activated in any state during FY2019.2019, EB has not been activated in any state during FY2019.16
16 Unemployment Insurance and the Recent Partial
Government Shutdown
The lapse in federal appropriations that occurred from December 22, 2018The lapse in federal appropriations that occurred from December 22, 2018, until January 25, 2019, until January 25, 2019,
caused a partial government shutdown. As a result, during this lapse in appropriations, agencies caused a partial government shutdown. As a result, during this lapse in appropriations, agencies
without funding furloughed federal employees; and many federal employees excepted from without funding furloughed federal employees; and many federal employees excepted from
furlough were working without pay.furlough were working without pay.17
17 Furloughed federal employees may be eligible for UCFE benefits.Furloughed federal employees may be eligible for UCFE benefits.1818 States are required to operate States are required to operate
the UCFE program under the same terms and conditions that apply to regular state UC.the UCFE program under the same terms and conditions that apply to regular state UC.19
19 Therefore, UCFE eligibility is determined under the laws of the state in which an individualTherefore, UCFE eligibility is determined under the laws of the state in which an individual’s
's official duty station in federal civilian service is located. Federal employees who are in furlough official duty station in federal civilian service is located. Federal employees who are in furlough
status on account of a government shutdown are generally treated by state law as laid-off with an

11 See CRS Report R42972, Sequestration as a Budget Enforcement Process: Frequently Asked Questions.
12 And EUC08, when available it was available (including any benefit payments delayed from prior fiscal years).
13 See CRS Report R43133, The Impact of Sequestration on Unemployment Insurance Benefits: Frequently Asked
Questions for additional information on the impact of sequestration on UI benefits, generally, and specifically for
sequestration in FY2013 and FY2014. Please see CRS Report R43993, Unemployment Insurance: Legislative Issues in
the 114th Congress for additional information on the implications of the sequester order for FY2015 and FY2016.
Please see CRS Report R44836, Unemployment Insurance: Legislative Issues in the 115th Congress for additional
information on the implications of the sequester order for FY2017 and FY2018.
14 Office of Management and Budget (OMB), OMB Sequestration Preview Report to the President and Congress for
Fiscal Year 2019, February 12, 2018, https://www.whitehouse.gov/wp
content/uploads/2018/02/Preview_Sequestration_Report_February_2018.pdf.
15 For details, see Employment and Training Administration (ETA), U.S. Department of Labor (DOL), Unemployment
Insurance Program Letter, UIPL 1-19, December 12, 2018, https://wdr.doleta.gov/directives/corr_doc.cfm?DOCN=
4536.
16 For the current EB trigger notice, select “Extended Benefits Trigger Notice” at https://ows.doleta.gov/unemploy/
claims_arch.asp.
17 See guidance on the recent lapse in appropriations from the Office of Management and Budget, available at
https://www.whitehouse.gov/omb/information-for-agencies/agency-contingency-plans/. Also see guidance from the
Office of Personnel Management on “Pay and Benefits for Employees Affected by the Lapse in Appropriations” (CPM
2019-06), January 27, 2019, available at https://www.chcoc.gov/content/pay-and-benefits-employees-affected-lapse-
appropriations-1.
18 Unemployment Compensation for Federal Employees (UCFE) is authorized under 5 U.S.C. §§8501-8508.
19 See 5 U.S.C. §8502(b).
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status on account of a government shutdown are generally treated by state law as laid-off with an expectation of recall. Depending on state laws and regulations, the state may have an option to expectation of recall. Depending on state laws and regulations, the state may have an option to
not require federal employees to search for work given an expected recall.not require federal employees to search for work given an expected recall.20
20 However, according to guidance from U.S. Department of Labor (DOL), excepted federal However, according to guidance from U.S. Department of Labor (DOL), excepted federal
employees who are performing services (but working without pay) would generally be ineligible employees who are performing services (but working without pay) would generally be ineligible
for UCFE benefits based on statesfor UCFE benefits based on states’' definitions of definitions of “"unemployment.unemployment.”21
"²¹ Private sector workers who are furloughed or laid off due to the partial government shutdown Private sector workers who are furloughed or laid off due to the partial government shutdown
because they were employed by government contractors because they were employed by government contractors or other businesses may be eligible for regular UC benefits. may be eligible for regular UC benefits.
UC eligibility for these workers would be based on the requirements set out under the state laws UC eligibility for these workers would be based on the requirements set out under the state laws
in the state where they had worked.in the state where they had worked.
In this climate, there has been congressional interest in assisting furloughed and excepted federal In this climate, there has been congressional interest in assisting furloughed and excepted federal
employees through the UI system. For example, as described below in the section on employees through the UI system. For example, as described below in the section on
"“Unemployment Compensation for Excepted Federal Employees During a Government
Shutdown,” Shutdown," there are proposals to provide new authority to pay UCFE benefits to excepted there are proposals to provide new authority to pay UCFE benefits to excepted
federal workersfederal workers.
who are working without pay. The most recent lapse in federal appropriations that began December 22, 2018, ended on January The most recent lapse in federal appropriations that began December 22, 2018, ended on January
25, 2019, with the enactment of H.J.Res. 2825, 2019, with the enactment of H.J.Res. 28.22.²² Because retroactive pay for furloughed and Because retroactive pay for furloughed and
excepted federal employees was authorized under S. 24, the Government Employee Fair excepted federal employees was authorized under S. 24, the Government Employee Fair
Treatment Act of 2019 (enacted January 16, 2019), UCFE payments made to federal employee Treatment Act of 2019 (enacted January 16, 2019), UCFE payments made to federal employee
claimants during this lapse in appropriations may be deemed an overpayment, subject to state UC claimants during this lapse in appropriations may be deemed an overpayment, subject to state UC
laws regarding overpayment recovery. According to guidance from the Office of Personnel laws regarding overpayment recovery. According to guidance from the Office of Personnel
Management on this issueManagement on this issue:23 23
The state UI agency will determine whether or not an overpayment exists and, generally, The state UI agency will determine whether or not an overpayment exists and, generally,
the recovery of the UCFE overpayment is a matter for state action under its law; however, the recovery of the UCFE overpayment is a matter for state action under its law; however,
some state UI laws require the employer to recover such overpayment by collecting the some state UI laws require the employer to recover such overpayment by collecting the
overpayment amount from the employee. The Federal and state agencies will need to
overpayment amount from the employee. The Federal and state agencies will need to coordinate to determine the required action in accordance with the individual state UI law. coordinate to determine the required action in accordance with the individual state UI law.
Federal agencies are encouraged to develop lists or spreadsheets that can be provided to Federal agencies are encouraged to develop lists or spreadsheets that can be provided to
the state(s) containing the employees’ names, the state(s) containing the employees' names, social security numbers,social security numbers, and the and the amounts amounts
and periods of time covered by the retroactive payment.

20 See Office of Personnel Management, “Unemployment Insurance Questions and Answers for Federal Workers,”
December 2018, available at https://www.opm.gov/policy-data-oversight/pay-leave/furlough-guidance/unemployment-
compensation-for-federal-employees-fact-sheet-december-2018.pdf.
21 See ETA, U.S. DOL, Unemployment Insurance Program Letter, UIPL 31-13, “Impacts of the Federal Government
Shutdown and Unemployment Compensation for Federal Employees and State Administrative Funding for State UI
Programs,” Section A(3) of the Attachment (“Questions and Answers: Unemployment Insurance and the Federal
Government Shutdown”), October 11, 2013, available at https://wdr.doleta.gov/directives/corr_doc.cfm?DOCN=7589;
and also ETA. U.S. DOL, “E-Blast to State Unemployment Insurance Agencies,” January 16, 2019, available at
https://oui.doleta.gov/unemploy/2019_shutdown/docs/E-Blast_to_State_Unemployment_Insurance_Agencies_v3.pdf.
22 H.J.Res. 28 (enacted January 25, 2019) is a continuing resolution (CR) that provides continuing FY2019
appropriations to several federal agencies through February 15, 2019.
23 Office of Personnel Management, “Pay and Benefits for Employees Affected by the Lapse in Appropriations” (CPM
2019-06), January 27, 2019, available at https://www.chcoc.gov/content/pay-and-benefits-employees-affected-lapse-
appropriations-1.
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and periods of time covered by the retroactive payment. State UC Loans and  Solvency Concerns
If a recession is deep enough and if state unemployment tax (SUTA) revenue is inadequate for If a recession is deep enough and if state unemployment tax (SUTA) revenue is inadequate for
long periods of time, states may have insufficient funds to pay for UC benefits. Federal law, long periods of time, states may have insufficient funds to pay for UC benefits. Federal law,
which requires states to pay these benefits, provides a loan mechanism within the UTF which requires states to pay these benefits, provides a loan mechanism within the UTF
framework that an insolvent state may use to meet its UC benefit payment obligations.framework that an insolvent state may use to meet its UC benefit payment obligations.2424 States States
must pay back these loans. If the loans are not paid back quickly (depending on the timing of the must pay back these loans. If the loans are not paid back quickly (depending on the timing of the
beginning of the loan period), states may face interest charges, and statesbeginning of the loan period), states may face interest charges, and states’' employers may face employers may face
increased net FUTA rates until the loans are repaid.increased net FUTA rates until the loans are repaid.25
25 The U.S. Virgin Islands is the only jurisdiction with an outstanding loan. As of January 18, 2019, The U.S. Virgin Islands is the only jurisdiction with an outstanding loan. As of January 18, 2019,
it had an outstanding loan of $68.4 million from the federal accounts within the UTF.it had an outstanding loan of $68.4 million from the federal accounts within the UTF.2626 At the end At the end
of 2017, fewer than half of states (24) had accrued enough funds in their accounts to meet or of 2017, fewer than half of states (24) had accrued enough funds in their accounts to meet or
exceed the minimally solvent standard of an average high cost multiple (AHCM) of 1.0 in order exceed the minimally solvent standard of an average high cost multiple (AHCM) of 1.0 in order
to be prepared for a recession.27
President’s Budget Proposal for FY2019
The President’s budget for FY2019 proposes changes to several aspects of the UI system.28 It
would create a new required standard for state account balances within the UTF. The President’s
FY2019 budget also proposes to make funding for Reemployment Services and Eligibility
Assessments (RESEA) permanent beginning in FY2019, and to make these assessments
mandatory for 50% of UC beneficiaries.29 Additionally, the proposal would create a new benefit
entitlement for paid parental leave financed through state unemployment taxes. Finally, the
President’s budget for FY2019 proposes a set of additional integrity measures, including
offsetting Social Security Disability Insurance (SSDI) benefits for concurrent receipt of UI
benefits.

24 Federal UC law does not restrict the states from using loan resources outside of the UTF. Depending on state law,
states may have other funding measures available and may be able to use funds from outside of the UTF to pay the
benefits (such as issuing bonds).
25 Details on how states may borrow federal funds to pay for UC benefits are in CRS Report RS22954, The
Unemployment Trust Fund (UTF): State Insolvency and Federal Loans to States.
26 U.S. Department of the Treasury, Bureau of Public Debt, Title XII Advance Activities Schedule, January 18, 2019, at
http://www.treasurydirect.gov/govt/reports/tfmp/tfmp_advactivitiessched.htm.
27 DOL defines the AHCM as the ratio of actual UTF account balances to the average of the three highest years of
benefit payments experienced by the state over the past 20 years. Presumably, the average of the three highest years’
outlays would be a good indicator of potential expected UC payments if another recession were to occur. Under these
assumptions, if a state had saved enough funds to pay for an average high year of UC benefit activity, its AHCM would
be at least 1.0. See Division of Fiscal and Actuarial Services, Office of Unemployment Insurance, U.S. Department of
Labor, State Unemployment Insurance Trust Fund Solvency Report 2018, Washington, DC, March 2018,
https://oui.doleta.gov/unemploy/docs/trustFundSolvReport2018.pdf.
28 The President’s detailed budget proposal for UC in FY2019 is accessible at https://www.dol.gov/sites/default/files/
budget/2019/CBJ-2019-V1-07.pdf. The President’s budget for FY2018 included substantively similar UC proposals
and is accessible at https://www.dol.gov/sites/default/files/CBJ-2018-V1-07.pdf.
29 Permanent authority for RESEA was enacted under Section 30206 of P.L. 115-123, the Bipartisan Budget Act of
2018 (enacted February 9, 2018).
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New Minimum Account Balance for State UTF Accounts
The President’s budget proposal for FY2019to be prepared for a recession.²⁷ Reemployment Services and Eligibility Assessments

Beginning in FY2015, DOL funded state efforts "addressing individual reemployment needs of UI claimants, and working to prevent and detect UI overpayments" through the voluntary Reemployment Services and Eligibility Assessment (RESEA) program.²⁸ RESEA provides funding to states to conduct in-person interviews with selected UI claimants to (1) assure that claimants are complying with the eligibility rules, (2) determine if reemployment services are needed for the claimant to secure future employment, (3) refer the individual to reemployment services as necessary, and (4) provide labor market information that addresses the claimant's specific needs. Section 30206 of P.L. 115-123 codified the authority for DOL to administer a RESEA program.²⁹ It also set out various requirements for states to use certain types of evidence-based interventions for UI claimants under RESEA as well as allocates discretionary funding for RESEA across three categories (base funding, outcome payments, and research and technical assistance). Under this law, state RESEA programs must include reasonable notice and accommodations to participating UI beneficiaries.

President's Budget Proposal for FY2020

The President's budget for FY2020 proposes changes to several aspects of the UI system.³⁰ It would create a new required standard for state account balances within the UTF and a new benefit entitlement for paid parental leave financed through state unemployment taxes. The President's FY2020 budget also proposes a set of additional integrity measures, including the required use of certain databases to confirm UC eligibility and requiring Social Security Disability Insurance (SSDI) benefits offset UI benefits.

New Minimum Account Balance for State UTF Accounts The President's budget proposal for FY2020 would require states to maintain a minimum level of would require states to maintain a minimum level of
solvency in their UTF account balances to be at least solvency in their UTF account balances to be at least 50%half (0.5) of the state of the state’'s AHCM. The proposal s AHCM. The proposal
would alter the rules for calculating the net FUTA rate, requiring a higher net FUTA rate on a would alter the rules for calculating the net FUTA rate, requiring a higher net FUTA rate on a
state’state's employers if that state maintained an AHCM of less than 0.5 on January 1 of two or more s employers if that state maintained an AHCM of less than 0.5 on January 1 of two or more
consecutive years. The additional FUTA revenue would be deposited into the state UTF account consecutive years. The additional FUTA revenue would be deposited into the state UTF account
and would be terminated once the state met the 0.5 AHCM criteria.30
Mandatory RESEA Services
The President’s budget proposal for FY2019 would create permanent and mandatory RESEA
program funding, beginning in 2019.31 States would be required to provide reemployment
services and eligibility assessments to 50% of UC claimants as well as to 100% of UCX
claimants.32 (Just prior to the February 12, 2018, release of the President’s budget proposal for
2019, Section 30206 of P.L. 115-123, the Bipartisan Budget Act of 2018 (enacted February 9,
2018) codified RESEA.)33
and would be terminated once the state met the 0.5 AHCM criteria.³¹ Paid Family Leave Benefit
The PresidentThe President’'s budget proposal for s budget proposal for FY2019FY2020 would require states to establish a paid parental would require states to establish a paid parental
leave benefit by 2020, using the UC program as its leave benefit by 2020, using the UC program as its base for an administrative framework.administrative framework.3432 States would be States would be
required to provide six weeks of benefits to a worker on leave or otherwise absent from work for required to provide six weeks of benefits to a worker on leave or otherwise absent from work for
the birth or adoption of the workerthe birth or adoption of the worker’'s child.s child.3533 States would have discretion to determine the States would have discretion to determine the
parameters of eligibility and financing for this new paid parental leave benefit.

30 For the current AHCM in each state, see the last column of Table 1 in Division of Fiscal and Actuarial Services,
Office of Unemployment Insurance, U.S. Department of Labor, State Unemployment Insurance Trust Fund Solvency
Report 2018, Washington, DC, March 2018, https://oui.doleta.gov/unemploy/docs/trustFundSolvReport2018.pdf.
31 Since 2005 and until the enactment of P.L. 115-123, the Bipartisan Budget Act of 2018 (February 9, 2018), DOL
provided discretionary grants to state workforce agencies to fund employment-related assistance to UI recipients
through Reemployment and Eligibility Assessments (REAs).
32 Under current law, due to changes made by the Emergency Unemployment Compensation Act of 1991 (P.L. 102-
164), states are required to treat former military servicemembers the same as other unemployed workers with respect to
UC benefit levels, the waiting period for benefits, and benefit duration. For details on UCX, see CRS Report RS22440,
Unemployment Compensation (Insurance) and Military Service.
33 See the section on “The Bipartisan Budget Act of 2018 (P.L. 115-123)” in CRS Report R44836, Unemployment
Insurance: Legislative Issues in the 115th Congress, for a summary of the enacted RESEA provisions.
34 For information on a previous attempt to create a paid benefit for the birth or adoption of a child through the UC
program, see CRS In Focus IF10643, Unemployment Compensation (UC) and Family Leave.
35 It is not clear if this proposal creates any new entitlement to job-protected leave itself; rather, it appears to create a
new entitlement to income replacement while an individual is taking parental leave. For information on states that
currently operate state paid family leave insurance programs, including California, Rhode Island, New Jersey, and New
York as well as states that have enacted paid family leave insurance programs, but which are not yet fully implemented
and not paying benefits (e.g., the District of Columbia, Massachusetts, and Washington State), see CRS Report
R44835, Paid Family Leave in the United States.
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parameters of eligibility and financing for this new paid parental leave benefit. UI Program Integrity UI Program Integrity
Requirements to Use Particular Data Sources for Program Integrity
The PresidentThe President’s 2019's 2020 budget would require states to use three specific data sources to confirm an budget would require states to use three specific data sources to confirm an
individual’individual's eligibility for UC benefits: State Information Data Exchange System (SIDESs eligibility for UC benefits: State Information Data Exchange System (SIDES), the
, administered by Information Technology Support Center (ITSC) and DOL); the National Directory for New Hires (NDNHNational Directory for New Hires (NDNH), and the Prisoner Update Processing System.36
Additional Integrity Proposals
, administered by the Department of Health and Human Services); and the Prisoner Update Processing System (PUPS, administered by the Social Security Administration).³⁴ Additional Integrity Proposals The proposal would create several additional integrity measuresThe proposal would create several additional integrity measures. These include the following:
 , includinggiving the Secretary of Labor the authority to implement new corrective action giving the Secretary of Labor the authority to implement new corrective action
measures in response to poor state administrative performance within the measures in response to poor state administrative performance within the
program;program;
 allowing states to retain allowing states to retain up to 5%a percentage of UC overpayments for program integrity use; of UC overpayments for program integrity use;
 requiring states to deposit all UC penalty and interest payments into a special requiring states to deposit all UC penalty and interest payments into a special
state fund, with these funds required to be used for improving state UI state fund, with these funds required to be used for improving state UI
administration as well as providing reemployment services for UI claimants;administration as well as providing reemployment services for UI claimants;37
and
 35 and offsetting SSDI benefits to account for concurrent receipt of UI benefits.offsetting SSDI benefits to account for concurrent receipt of UI benefits.38
362018 DOL Proposed Rule on UC Drug Testing
Section 2105 of the Middle Class Tax Relief and Job Creation Act of 2012 (P.L. 112-96; February Section 2105 of the Middle Class Tax Relief and Job Creation Act of 2012 (P.L. 112-96; February
22, 2012) amended federal law to allow states to conduct two types of drug testing. First, it 22, 2012) amended federal law to allow states to conduct two types of drug testing. First, it
expanded the longstanding state option to disqualify UC applicants who were discharged from expanded the longstanding state option to disqualify UC applicants who were discharged from
employment with their most recent employer (as defined under state law) for unlawful drug use employment with their most recent employer (as defined under state law) for unlawful drug use
by allowing states to drug test these applicants to determine UC benefit eligibility or by allowing states to drug test these applicants to determine UC benefit eligibility or
disqualification. Second, it allowed states to drug test UC applicants for whom suitable work (as disqualification. Second, it allowed states to drug test UC applicants for whom suitable work (as
defined under state law) is available only in an occupation that regularly conducts drug testing, to defined under state law) is available only in an occupation that regularly conducts drug testing, to
be determined under new regulations issued by the Secretary of Labor.be determined under new regulations issued by the Secretary of Labor.
As required byAs required by  P.L. 112-96, on August 1, 2016, DOL promulgatedP.L. 112-96, on August 1, 2016, DOL promulgated  20 C.F.R. Part 62020 C.F.R. Part 620,39 ,³⁷ a new a new
rule to implement the provisions of the law relating to the drug testing of UC applicants for whom rule to implement the provisions of the law relating to the drug testing of UC applicants for whom
suitable work (as defined under state law) is available only in an occupation that regularly suitable work (as defined under state law) is available only in an occupation that regularly
conducts drug testing.

36 States currently have the federal authority to use these data sources, but their use is not mandatory.
37 In addition, under this proposal, states with high improper payment rates would be required to spend a portion of the
UC penalty and interest payments funds on program integrity activities.
38 For a discussion of legislative proposals on this issue introduced in the 114th Congress, see the section on
“Concurrent Receipt of SSDI and UI Benefits” in CRS Report R43993, Unemployment Insurance: Legislative Issues in
the 114th Congress. For general background on the issue of concurrent receipt of SSDI and UI, see CRS Report
R43471, Concurrent Receipt of Social Security Disability Insurance (SSDI) and Unemployment Insurance (UI):
Background and Legislative Proposals.
39 See https://www.govinfo.gov/content/pkg/FR-2016-08-01/pdf/2016-17738.pdf.
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conducts drug testing. Amid concerns voiced by stakeholders about the 2016 DOL rule, Congress repealed this UC drug Amid concerns voiced by stakeholders about the 2016 DOL rule, Congress repealed this UC drug
testing rule using the Congressional Review Act (CRA) via H.J.Res. 42testing rule using the Congressional Review Act (CRA) via H.J.Res. 42//P.L. 115-17P.L. 115-17.40.³⁸ On On
November 5, 2018,November 5, 2018,  DOL published a Notice of Proposed Rulemaking (NPRM)DOL published a Notice of Proposed Rulemaking (NPRM)  to reissue the rule to reissue the rule
identifying occupations that regularly conduct drug testing for purposes of Section 2105 ofidentifying occupations that regularly conduct drug testing for purposes of Section 2105 of  P.L. P.L.
112-96112-96.41.³⁹ The CRA prohibits an agency from reissuing the rule in The CRA prohibits an agency from reissuing the rule in “"substantially the same formsubstantially the same form”
" or issuing a or issuing a “"new rule that is substantially the samenew rule that is substantially the same”" as the disapproved rule, as the disapproved rule, “"unless the reissued unless the reissued
or new rule is specifically authorized by a law enacted after the date of the joint resolution or new rule is specifically authorized by a law enacted after the date of the joint resolution
disapproving the original rule.disapproving the original rule.”" Notably, this is the first time an agency has proposed to reissue a Notably, this is the first time an agency has proposed to reissue a
rule after the original version was disapproved under the CRA.rule after the original version was disapproved under the CRA.42
40 According to the 2018 NPRM, DOL has addressed the reissue requirements of the CRA by According to the 2018 NPRM, DOL has addressed the reissue requirements of the CRA by
proposing:43
proposing⁴¹ a substantially different and more flexible approach to the statutory requirements than the a substantially different and more flexible approach to the statutory requirements than the
2016 Rule, enabling States to enact legislation to require drug testing for a far larger group 2016 Rule, enabling States to enact legislation to require drug testing for a far larger group
of UC applicants than the previous Rule permitted. This flexibility is intended to respect of UC applicants than the previous Rule permitted. This flexibility is intended to respect
the diversity of States’ economies and the different roles played by employment drug
the diversity of States' economies and the different roles played by employment drug testing in those economies.testing in those economies.

Comments on the proposed 2018 rule were required to be submitted by January 4, 2019.⁴²

Legislative Proposals in the 116^th Congress Comments on the proposed 2018 rule were required to be submitted by January 4, 2019.44

40 For examples of these stakeholder concerns, see CRS Insight IN10909, Recent Legislative and Regulatory
Developments in States’ Ability to Drug Test Unemployment Compensation Applicants and Beneficiaries. For
information on the Congressional Review Act, see CRS Report R43992, The Congressional Review Act (CRA):
Frequently Asked Questions.
41 ETA, DOL, “Federal-State Unemployment Compensation Program; Establishing Appropriate Occupations for Drug
Testing of Unemployment Compensation Applicants Under the Middle Class Tax Relief and Job Creation Act of
2012,” 83 Federal Register 55311-55318, November 5, 2018.
42 For more information on potential implications for this reissued rule stemming from the disapproval of the 2016 rule
under the CRA, see CRS Insight IN10996, Reissued Labor Department Rule Tests Congressional Review Act Ban on
Promulgating “Substantially the Same” Rules.
43 See DOL, “Federal-State Unemployment Compensation Program,” p. 55313, p. 55312.
44 This deadline occurred during a partial government shutdown. While DOL is funded through the end of FY2019, the
National Archives and Records Administration (NARA), which maintains the Federal Register, was not and is subject
to the partial government shutdown. NARA has stated in its contingency plan that “most NARA public websites will
remain available, but will not be updated or monitored. For archives.gov and most other NARA websites, information
will not be updated, web transactions will not be processed, and NARA will not respond to inquiries that are submitted
during a funding lapse” (p. 7) and “NARA together with GPO will publish an edition of the Federal Register each work
day that includes only those documents related to the protection of life and property. In the event that some agencies
retain funding while NARA is subject to a lapse, the Office of the Federal Register will publish additional documents
for funded agencies, without limiting those agencies to documents meeting the life and property exception” (p. 10) of
National Archives and Records Administration, Operations in the absence of appropriations, NARA 103, Washington,
DC, January 14, 2019, https://www.archives.gov/files/contingency-plan/contingency-plan.pdf. As of January 28, 2019,
it is not yet clear how this lapse in appropriations will affect, if at all, the comment period for this DOL UC drug testing
rule.
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Legislative Proposals in the 116th Congress
Unemployment Compensation for Excepted Federal Employees
During a Government Shutdown
On January 16, 2019, Senator Richard Blumenthal introduced S. 165, the Federal Unemployment On January 16, 2019, Senator Richard Blumenthal introduced S. 165, the Federal Unemployment
Compensation Equity Act of 2019.Compensation Equity Act of 2019.45 This proposal would amend UCFE law and create a new This proposal would amend UCFE law and create a new
permanent UCFE eligibility category for excepted federal employees who are unpaid but required permanent UCFE eligibility category for excepted federal employees who are unpaid but required
to work during a government shutdown due to a lapse in appropriations. During any shutdown to work during a government shutdown due to a lapse in appropriations. During any shutdown
beginning on or after December 22, 2018, all excepted federal workers would be deemed eligible beginning on or after December 22, 2018, all excepted federal workers would be deemed eligible
for UCFE benefits. Additionally, these employees would not be subject to a one-week waiting for UCFE benefits. Additionally, these employees would not be subject to a one-week waiting
period (otherwise often required under state laws) before UCFE benefits were to be paid.period (otherwise often required under state laws) before UCFE benefits were to be paid.
On January 23, 2019, Representative Debbie Dingell introduced H.R. 725, the Pay Federal On January 23, 2019, Representative Debbie Dingell introduced H.R. 725, the Pay Federal
Workers Act.Workers Act.46 This proposal would also provide UCFE benefits in a similar manner to S. 165 This proposal would also provide UCFE benefits in a similar manner to S. 165, ,
including permanently amending 5 U.S.C. Chapter 85 to provide federal authority for these including permanently amending 5 U.S.C. Chapter 85 to provide federal authority for these
benefits.benefits.
On January 23, 2019, Representative Anthony Brown introduced H.R. 720On January 23, 2019, Representative Anthony Brown introduced H.R. 720..47 This proposal would This proposal would
deem excepted federal employees during a government shutdown to be eligible for UCFE during deem excepted federal employees during a government shutdown to be eligible for UCFE during
FY2019. The authority to provide UCFE to these excepted workers would expire at the end of FY2019. The authority to provide UCFE to these excepted workers would expire at the end of
FY2019.
Self-Employment and Relocation Assistance Benefits
FY2019.

On February 8, 2019, Representative Katie Hill introduced H.R. 1117, the Shutdown Fairness Act of 2019. This proposal would deem excepted federal employees and unpaid military servicemembers during a government shutdown to be eligible for UCFE or UCX during FY2019. The authority to provide UCFE to these excepted workers would expire at the end of FY2019.

Self-Employment and Relocation Assistance Benefits On January 15, 2019, Senator Ron Wyden and Representative Danny Davis introduced On January 15, 2019, Senator Ron Wyden and Representative Danny Davis introduced S. 136 and S.
136/H.R. 556, the Economic Ladders to End Volatility and Advance Training and Employment H.R. 556, the Economic Ladders to End Volatility and Advance Training and Employment
Act of 2019 (the ELEVATE Act)Act of 2019 (the ELEVATE Act).. Among other provisions, this proposal would establish new Among other provisions, this proposal would establish new
self-employment and relocation assistance benefits for unemployed workers to be administered self-employment and relocation assistance benefits for unemployed workers to be administered
by the Social Security Administration, in consultation with DOL. The self-employment assistance by the Social Security Administration, in consultation with DOL. The self-employment assistance
benefits would provide weekly income replacement (half of prior earnings up to the maximum benefits would provide weekly income replacement (half of prior earnings up to the maximum
weekly benefit amount in the state) for up to of 26 weeks to individuals. They would be available weekly benefit amount in the state) for up to of 26 weeks to individuals. They would be available
to individuals who are (1) eligible for any type of UI benefit; or ineligible for any type of UI to individuals who are (1) eligible for any type of UI benefit; or ineligible for any type of UI
benefit, but became involuntarily unemployed over the previous 12 weeks; or were previously benefit, but became involuntarily unemployed over the previous 12 weeks; or were previously
self-employed, but lost a hiring contract, and (2) have a viable business plan approved by their self-employed, but lost a hiring contract, and (2) have a viable business plan approved by their
state state Department of Labordepartment of labor, workforce board, or the Small Business Administration., workforce board, or the Small Business Administration.48
43 Additionally, Section 3 of S. 136 and H.R. 556 would provide up to $2,000 (or more, depending Additionally, Section 3 of S. 136 and H.R. 556 would provide up to $2,000 (or more, depending
on family size) to fund to up to 90 percent of certain relocation expenses for eligible individuals on family size) to fund to up to 90 percent of certain relocation expenses for eligible individuals
and their families. In order to be eligible for this relocation assistance, an individual must be a (1)and their families. In order to be eligible for this relocation assistance, an individual must be a (1)

45 Bill text was not available on congress.gov at the time of publication.
46 Bill text was not available on congress.gov at the time of publication.
47 Bill text was not available on congress.gov at the time of publication.
48 This proposal would create a new authority to provide self-employment assistance benefits under a new Title XIII
Part B of the Social Security Act. This new authority would be distinct from Self-Employment Assistance programs
currently authorized under federal law and set up by states. See CRS Report R41253, The Self-Employment Assistance
(SEA) Program.
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 dislocated worker,dislocated worker,4944 (2) long-term unemployed individual, (2) long-term unemployed individual,5045 or (3) underemployed individual; or (3) underemployed individual;51
46 and also have filed a claim for relocation assistance and obtained suitable work with an and also have filed a claim for relocation assistance and obtained suitable work with an
expectation of obtaining such work in a new geographic region.

49 As defined in Section 3 of the Workforce Innovation and Opportunity Act (P.L. 113-128).
50 As defined by the newly-created Director of the Office of Reemployment Assistance, in consultation with the
Secretary of Labor and in accordance with criteria set out under the proposed Section 1323 of the Social Security Act.
51 “As so determined” under the proposed Section 1325(4)(A)(iii) of the Social Security Act.
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Appendix. Extended Benefit (EB) Program
The EB expectation of obtaining such work in a new geographic region. Reemployment Services and Eligibility Assessments

On March 14, 2019, Representative Stephanie Murphy introduced H.R. 1759, the Building on Reemployment Improvements to Deliver Good Employment (BRIDGE) for Workers Act.⁴⁷ This proposal would extend eligibility to any claimant of unemployment benefits, including those profiled as likely to exhaust benefits (rather than limiting eligibility to those who were profiled as likely to exhaust benefits).

Appendix. Extended Benefit Program The Extended Benefit (EB) program was established by the Federal-State Extended Unemployment Compensation program was established by the Federal-State Extended Unemployment Compensation
Act of 1970 (EUCA; P.L. 91-373) (26 U.S.C. §3304, note). EUCA may extend receipt of Act of 1970 (EUCA; P.L. 91-373) (26 U.S.C. §3304, note). EUCA may extend receipt of
unemployment benefits (extended benefits) at the state level if certain economic conditions exist unemployment benefits (extended benefits) at the state level if certain economic conditions exist
within the state. As of the date of this publication, EB is not active in any state.within the state. As of the date of this publication, EB is not active in any state.52
48 Extended Benefit Triggers
The EB program is triggered when a stateThe EB program is triggered when a state’'s insured unemployment rate (IUR) or total s insured unemployment rate (IUR) or total
unemployment rate (TUR) reaches certain levels.unemployment rate (TUR) reaches certain levels.5349 All states must pay up to 13 weeks of EB if All states must pay up to 13 weeks of EB if
the IUR for the previous 13 weeks is at least 5% and is 120% of the average of the rates for the the IUR for the previous 13 weeks is at least 5% and is 120% of the average of the rates for the
same 13-week period in each of the two previous years. States may choose to enact two other same 13-week period in each of the two previous years. States may choose to enact two other
optional thresholds. (States may choose one, two, or none.) If the state has chosen one or more of optional thresholds. (States may choose one, two, or none.) If the state has chosen one or more of
the EB trigger options, it would provide the following:the EB trigger options, it would provide the following:
 Option 1—up to an additional 13 weeks of benefits if the stateOption 1—up to an additional 13 weeks of benefits if the state’'s IUR is at least s IUR is at least
6%, regardless of previous years6%, regardless of previous years’' averages. averages.
 Option 2—up to an additional 13 weeks of benefits if the stateOption 2—up to an additional 13 weeks of benefits if the state’'s TUR is at least s TUR is at least
6.5% and is at least 110% of the state6.5% and is at least 110% of the state’'s average TUR for the same 13 weeks in s average TUR for the same 13 weeks in
either of the previous two years; up to an additional 20 weeks of benefits if the either of the previous two years; up to an additional 20 weeks of benefits if the
state’state's TUR is at least 8% and is at least 110% of the states TUR is at least 8% and is at least 110% of the state’'s average TUR for the s average TUR for the
same 13 weeks in either of the previous two years.same 13 weeks in either of the previous two years.
EB benefits are not EB benefits are not “grandfathered”"grandfathered" (phased out) when a state triggers (phased out) when a state triggers “off”"off" the program. When a the program. When a
state triggers state triggers “off”"off" of an EB period, all EB benefit payments in the state cease immediately of an EB period, all EB benefit payments in the state cease immediately
regardless of individual entitlement.54

52 For the current EB trigger notice, select “Extended Benefits Trigger Notice” at https://ows.doleta.gov/unemploy/
claims_arch.asp.
53 The total unemployment rate (TUR) is the three-month average of the ratio of unemployed workers to all workers
(employed and unemployed) in the labor market. The TUR is essentially a three-month average version of the
unemployment rate published by the Bureau of Labor Statistics (BLS) and based on data from the BLS’s monthly
Current Population Survey (CPS). The insured unemployment rate (IUR) is the ratio of UC claimants divided by
individuals in UC-covered jobs. In addition, the IUR uses a different base of workers in its calculations as compared
with the TUR. The IUR excludes several groups used in TUR calculations: self-employed workers, unpaid family
workers, workers in certain not-for-profit organizations, and several other, primarily seasonal, categories of workers. In
addition to those unemployed workers whose last jobs were in the excluded employment category, the IUR excludes
the following: those who have exhausted their UC benefits (even if they are receiving EB benefits); new entrants or
reentrants to the labor force; disqualified workers whose unemployment is considered to have resulted from their own
actions rather than from economic conditions; and eligible unemployed persons who do not file for benefits. As a
result, the IUR in a state is often calculated to be much lower than its TUR.
54 EB benefits on interstate claims are limited to two extra weeks unless both the worker’s state of residence (e.g.,
Texas) and the worker’s state of previous employment (e.g., Louisiana) are in an EB period.
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The EB benefit amount is equal to the eligible individual’s weekly regular UC benefits. Under
permanent law, FUTA finances half (50%) of the EB payments and 100% of EB administrative
costs.55 States fund the other half (50%) of EB benefit costs through their SUTA.56

Author Information

Julie M. Whittaker
Katelin P. Isaacs
Specialist in Income Security
Specialist in Income Security




Disclaimer
This document was prepared by the Congressional Research Service (CRS). CRS serves as nonpartisan
shared staff to congressional committees and Members of Congress. It operates solely at the behest of and
under the direction of Congress. Information in a CRS Report should not be relied upon for purposes other
than public understanding of information that has been provided by CRS to Members of Congress in
connection with CRS’s institutional role. CRS Reports, as a work of the United States Government, are not
subject to copyright protection in the United States. Any CRS Report may be reproduced and distributed in
its entirety without permission from CRS. However, as a CRS Report may include copyrighted images or
material from a third party, you may need to obtain the permission of the copyright holder if you wish to
copy or otherwise use copyrighted material.


55regardless of individual entitlement.⁵⁰

The EB benefit amount is equal to the eligible individual's weekly regular UC benefits. Under permanent law, FUTA finances half (50%) of the EB payments and 100% of EB administrative costs.⁵¹ States fund the other half (50%) of EB benefit costs through their SUTA.⁵²

Author Contact Information

Julie M. Whittaker, Specialist in Income Security ([email address scrubbed], [phone number scrubbed])

Katelin P. Isaacs, Specialist in Income Security ([email address scrubbed], [phone number scrubbed])

Footnotes

1.

For detailed information on each of these programs, see CRS Report RL33362, Unemployment Insurance: Programs and Benefits. Certain groups of workers may qualify for income support from additional unemployment insurance (UI) programs, including Trade Adjustment Assistance (TAA), Reemployment Trade Adjustment Assistance (RTAA), and Disaster Unemployment Assistance (DUA). Workers who lose their jobs because of international competition may qualify for income support through the TAA program or the RTAA (for certain workers aged 50 or older). Workers may be eligible to receive DUA benefits if they are not eligible for regular Unemployment Compensation (UC) and their unemployment may be directly attributed to a declared natural disaster. More information on the TAA and RTAA programs are in CRS Report R42012, Trade Adjustment Assistance for Workers. (The report is out of print, but is available to congressional clients from the author upon request.)

2.

For information on the expired Emergency Unemployment Compensation 2008 (EUC08) program, which provided additional unemployment benefits depending on state economic conditions from July 2008 to December 2013, see CRS Report R42444, Emergency Unemployment Compensation (EUC08): Status of Benefits Prior to Expiration.

3.

For more details on these states with less than 26 weeks of UC available, see CRS Report R41859, Unemployment Insurance: Consequences of Changes in State Unemployment Compensation Laws. In addition, the maximum UC duration is 28 weeks in Montana and 30 weeks in Massachusetts. When EB benefits are available, any available UC benefits above 26 weeks are treated effectively as if they were EB payments.

4.

5 U.S.C. §§8501-8508.

5.

5 U.S.C. §§8521-8525. For more information on the Unemployment Compensation for Ex-Servicemembers (UCX) program, see CRS Report RS22440, Unemployment Compensation (Insurance) and Military Service.

6.

The District of Columbia, Puerto Rico, and the Virgin Islands are considered to be states under UC law.

7.

For details on UC eligibility and benefits, see CRS Report RL33362, Unemployment Insurance: Programs and Benefits.

8.

In some cases a worker may be eligible for benefit based upon quitting a job for a "good cause" reason. In all states, individuals who leave their work voluntarily must meet the state's good cause requirements if they are not to be disqualified from receiving UC. In many states, good cause is explicitly restricted to reasons connected with the work, attributable to the employer, or involving fault on the part of the employer. (For those states, see Table 5.5 in U.S. Department of Labor (DOL), 2017 Comparison of State Unemployment Insurance Laws, available at https://workforcesecurity.doleta.gov/unemploy/pdf/uilawcompar/2017/nonmonetary.pdf.)

9.

23 U.S.C. §§3301-11.

10.

The Federal Unemployment Tax Act (FUTA) imposes a 6.0% gross tax rate on the first $7,000 paid annually by employers to each employee. Employers in states with programs approved by the federal government and with no delinquent federal loans may credit 5.4 percentage points against the 6.0% tax rate, making the minimum net federal unemployment tax rate 0.6%. Details on how delinquent loans affect the net FUTA tax are in CRS Report RS22954, The Unemployment Trust Fund (UTF): State Insolvency and Federal Loans to States.

11.

See CRS Report R42972, Sequestration as a Budget Enforcement Process: Frequently Asked Questions.

12.

And EUC08, when it was available (including any benefit payments delayed from prior fiscal years).

13.

See CRS Report R43133, The Impact of Sequestration on Unemployment Insurance Benefits: Frequently Asked Questions for additional information on the impact of sequestration on UI benefits, generally, and specifically for sequestration in FY2013 and FY2014. Please see CRS Report R43993, Unemployment Insurance: Legislative Issues in the 114th Congress for additional information on the implications of the sequester order for FY2015 and FY2016. Please see CRS Report R44836, Unemployment Insurance: Legislative Issues in the 115th Congress for additional information on the implications of the sequester order for FY2017 and FY2018.

14.

Office of Management and Budget (OMB), OMB Sequestration Preview Report to the President and Congress for Fiscal Year 2019, February 12, 2018, at https://www.whitehouse.gov/wp content/uploads/2018/02/Preview_Sequestration_Report_February_2018.pdf.

15.

For details, see Employment and Training Administration (ETA), U.S. Department of Labor (DOL), Unemployment Insurance Program Letter, UIPL 1-19, December 12, 2018, at https://wdr.doleta.gov/directives/corr_doc.cfm?DOCN=4536.

16.

For the current EB trigger notice, select "Extended Benefits Trigger Notice" at https://ows.doleta.gov/unemploy/claims_arch.asp.

17. See guidance on the recent lapse in appropriations from the Office of Management and Budget, available at https://www.whitehouse.gov/omb/information-for-agencies/agency-contingency-plans/. Also see guidance from the Office of Personnel Management on "Pay and Benefits for Employees Affected by the Lapse in Appropriations" (CPM 2019-06), January 27, 2019, available at https://www.chcoc.gov/content/pay-and-benefits-employees-affected-lapse-appropriations-1. 18.

Unemployment Compensation for Federal Employees (UCFE) is authorized under 5 U.S.C. §§8501-8508.

19.

See 5 U.S.C. §8502(b).

20.

See Office of Personnel Management, "Unemployment Insurance Questions and Answers for Federal Workers," December 2018, available at https://www.opm.gov/policy-data-oversight/pay-leave/furlough-guidance/unemployment-compensation-for-federal-employees-fact-sheet-december-2018.pdf.

21.

See ETA, U.S. DOL, Unemployment Insurance Program Letter, UIPL 31-13, "Impacts of the Federal Government Shutdown and Unemployment Compensation for Federal Employees and State Administrative Funding for State UI Programs," Section A(3) of the Attachment ("Questions and Answers: Unemployment Insurance and the Federal Government Shutdown"), October 11, 2013, available at https://wdr.doleta.gov/directives/corr_doc.cfm?DOCN=7589; and also ETA. U.S. DOL, "E-Blast to State Unemployment Insurance Agencies," January 16, 2019, available at https://oui.doleta.gov/unemploy/2019_shutdown/docs/E-Blast_to_State_Unemployment_Insurance_Agencies_v3.pdf.

22.

H.J.Res. 28 (enacted January 25, 2019) is a continuing resolution (CR) that provides continuing FY2019 appropriations to several federal agencies through February 15, 2019.

23.

Office of Personnel Management, "Pay and Benefits for Employees Affected by the Lapse in Appropriations" (CPM 2019-06), January 27, 2019, available at https://www.chcoc.gov/content/pay-and-benefits-employees-affected-lapse-appropriations-1.

24.

Federal UC law does not restrict the states from using loan resources outside of the UTF. Depending on state law, states may have other funding measures available and may be able to use funds from outside of the UTF to pay the benefits (such as issuing bonds).

25.

Details on how states may borrow federal funds to pay for UC benefits are in CRS Report RS22954, The Unemployment Trust Fund (UTF): State Insolvency and Federal Loans to States.

26.

U.S. Department of the Treasury, Bureau of Public Debt, Title XII Advance Activities Schedule, January 18, 2019, at http://www.treasurydirect.gov/govt/reports/tfmp/tfmp_advactivitiessched.htm.

27.

DOL defines the AHCM as the ratio of actual UTF account balances to the average of the three highest years of benefit payments experienced by the state over the past 20 years. Presumably, the average of the three highest years' outlays would be a good indicator of potential expected UC payments if another recession were to occur. Under these assumptions, if a state had saved enough funds to pay for an average high year of UC benefit activity, its AHCM would be at least 1.0. See Division of Fiscal and Actuarial Services, Office of Unemployment Insurance, U.S. Department of Labor, State Unemployment Insurance Trust Fund Solvency Report 2019, February 2019, at https://oui.doleta.gov/unemploy/docs/trustFundSolvReport2019.pdf.

28.

Since FY2005, the U.S. Department of Labor has provided some type of reemployment services through discretionary appropriations. For additional background, see CRS Report R43044, Expediting the Return to Work: Approaches in the Unemployment Compensation Program and Employment and Training Administration, U.S. Department of Labor, Unemployment Insurance Program Letter, UIPL 3-17, December 8, 2016, p. 2, available at https://wdr.doleta.gov/directives/attach/UIPL/UIPL_03-17.pdf.

29.

The law created a new Section 306 of the Social Security Act. Just over a month later, on March 23, 2018, the Consolidated Appropriations Act, FY2018 (P.L. 115-141), provided $2.6 billion from the UTF for grants to states for the administration of state unemployment insurance laws as authorized under title III of the Social Security Act (including not less than $120 million for RESEA and UC improper payment reviews, and to provide reemployment services and referrals to training, as appropriate) and provided that such activities would not be subject to the newly created Section 306 of the Social Security Act for that fiscal year (FY2018).

30.

The President's detailed budget proposal for UC in FY2020 is accessible at https://www.dol.gov/general/budget. The President's budget for FY2019 included substantively similar UC proposals and is accessible at https://www.dol.gov/general/budget/index-2019.

31.

Ten states did not already meet this solvency measure according to the last column of Table 1 in Division of Fiscal and Actuarial Services, Office of Unemployment Insurance, U.S. Department of Labor, State Unemployment Insurance Trust Fund Solvency Report 2019, Washington, DC, February 2019, at https://oui.doleta.gov/unemploy/docs/trustFundSolvReport2019.pdf.

32.

For information on a previous attempt to create a paid benefit for the birth or adoption of a child through the UC program, see CRS In Focus IF10643, Unemployment Compensation (UC) and Family Leave.

33.

It is not clear if this proposal creates any new entitlement to job-protected leave itself; rather, it appears to create a new entitlement to income replacement while an individual is taking parental leave. For information on states that currently operate state paid family leave insurance programs, including California, Rhode Island, New Jersey, and New York as well as states that have enacted paid family leave insurance programs, but which are not yet fully implemented and not paying benefits (e.g., the District of Columbia, Massachusetts, and Washington State), see CRS Report R44835, Paid Family Leave in the United States.

34.

States currently have the federal authority to use these data sources, but their use is not mandatory.

35.

In addition, under this proposal, states with high improper payment rates would be required to spend a portion of the UC penalty and interest payments funds on program integrity activities.

36.

For general background on the issue of concurrent receipt of SSDI and UI, see CRS Report R43471, Concurrent Receipt of Social Security Disability Insurance (SSDI) and Unemployment Insurance (UI): Background and Legislative Proposals.

37.

See https://www.govinfo.gov/content/pkg/FR-2016-08-01/pdf/2016-17738.pdf.

38.

For examples of these stakeholder concerns, see CRS Insight IN10909, Recent Legislative and Regulatory Developments in States' Ability to Drug Test Unemployment Compensation Applicants and Beneficiaries. For information on the Congressional Review Act, see CRS Report R43992, The Congressional Review Act (CRA): Frequently Asked Questions.

39.

ETA, DOL, "Federal-State Unemployment Compensation Program; Establishing Appropriate Occupations for Drug Testing of Unemployment Compensation Applicants Under the Middle Class Tax Relief and Job Creation Act of 2012," 83 Federal Register 55311-55318, November 5, 2018, at https://www.federalregister.gov/documents/2018/11/05/2018-23952/federal-state-unemployment-compensation-program-establishing-appropriate-occupations-for-drug.

40.

 For more information on potential implications for this reissued rule stemming from the disapproval of the 2016 rule under the CRA, see CRS Insight IN10996, Reissued Labor Department Rule Tests Congressional Review Act Ban on Promulgating "Substantially the Same" Rules.

41.

See DOL, "Federal-State Unemployment Compensation Program," pp. 55312-55313.

42.

This deadline occurred during a partial government shutdown. While DOL was funded during the partial government shutdown through the end of FY2019, the National Archives and Records Administration (NARA), which maintains the Federal Register, was not and was subject to the partial government shutdown. NARA stated in its contingency plan that "most NARA public websites will remain available, but will not be updated or monitored. For archives.gov and most other NARA websites, information will not be updated, web transactions will not be processed, and NARA will not respond to inquiries that are submitted during a funding lapse" (p. 7) and "NARA together with GPO will publish an edition of the Federal Register each work day that includes only those documents related to the protection of life and property. In the event that some agencies retain funding while NARA is subject to a lapse, the Office of the Federal Register will publish additional documents for funded agencies, without limiting those agencies to documents meeting the life and property exception" (p. 10) of National Archives and Records Administration, Operations in the absence of appropriations, NARA 103, Washington, DC, January 14, 2019. https://www.archives.gov/files/contingency-plan/contingency-plan.pdf. According to the docket folder summary, the comment period for this DOL UC drug testing rule closed on January 4, 2019, https://www.regulations.gov/document?D=ETA-2018-0004-0001.

43.

This proposal would create a new authority to provide self-employment assistance benefits under a new Title XIII Part B of the Social Security Act. This new authority would be distinct from Self-Employment Assistance programs currently authorized under federal law and set up by states. See CRS Report R41253, The Self-Employment Assistance (SEA) Program.

44.

As defined in Section 3 of the Workforce Innovation and Opportunity Act (P.L. 113-128).

45.

As defined by the newly-created Director of the Office of Reemployment Assistance, in consultation with the Secretary of Labor and in accordance with criteria set out under the proposed Section 1323 of the Social Security Act.

46.

"As so determined" under the proposed Section 1325(4)(A)(iii) of the Social Security Act.

47.

Bill text was not available on congress.gov at the time of publication.

48.

For the current EB trigger notice, select "Extended Benefits Trigger Notice" at https://ows.doleta.gov/unemploy/claims_arch.asp.

49.

The total unemployment rate (TUR) is the three-month average of the ratio of unemployed workers to all workers (employed and unemployed) in the labor market. The TUR is essentially a three-month average version of the unemployment rate published by the Bureau of Labor Statistics (BLS) and based on data from the BLS's monthly Current Population Survey (CPS). The insured unemployment rate (IUR) is the ratio of UC claimants divided by individuals in UC-covered jobs. In addition, the IUR uses a different base of workers in its calculations as compared with the TUR. The IUR excludes several groups used in TUR calculations: self-employed workers, unpaid family workers, workers in certain not-for-profit organizations, and several other, primarily seasonal, categories of workers. In addition to those unemployed workers whose last jobs were in the excluded employment category, the IUR excludes the following: those who have exhausted their UC benefits (even if they are receiving EB benefits); new entrants or reentrants to the labor force; disqualified workers whose unemployment is considered to have resulted from their own actions rather than from economic conditions; and eligible unemployed persons who do not file for benefits. As a result, the IUR in a state is often calculated to be much lower than its TUR.

50.

EB benefits on interstate claims are limited to two extra weeks unless both the worker's state of residence (e.g., Texas) and the worker's state of previous employment (e.g., Louisiana) are in an EB period.

51. The Tax Relief, Unemployment Insurance Reauthorization, and Job Creation Act of 2010, P.L. 111-312, as amended The Tax Relief, Unemployment Insurance Reauthorization, and Job Creation Act of 2010, P.L. 111-312, as amended
(the final time by P.L. 112-240), made technical changes to certain triggers in the EB program. See CRS Report (the final time by P.L. 112-240), made technical changes to certain triggers in the EB program. See CRS Report
R41859, R41859, Unemployment Insurance: Consequences of Changes in State Unemployment Compensation Laws. The . The
authorization for the temporary EB trigger modifications expired the week ending on or before December 31, 2013.authorization for the temporary EB trigger modifications expired the week ending on or before December 31, 2013.
56 52. P.L. 111-5, the American Recovery and Reinvestment Act of 2009 (most recently amended by P.L. 112-240, the P.L. 111-5, the American Recovery and Reinvestment Act of 2009 (most recently amended by P.L. 112-240, the
American Taxpayer Relief Act of 2012), temporarily changed the federal-state funding arrangement for the EB American Taxpayer Relief Act of 2012), temporarily changed the federal-state funding arrangement for the EB
program. The FUTA financed 100% of EB benefits from February 17, 2009, through December 31, 2013. The one program. The FUTA financed 100% of EB benefits from February 17, 2009, through December 31, 2013. The one
exception to the 100% federal financing was for those exception to the 100% federal financing was for those “"non-sharablenon-sharable”" EB benefits (work not subject to FUTA taxes EB benefits (work not subject to FUTA taxes
such as state and local government employment). Those non-sharable benefits continued to be 100% financed by the such as state and local government employment). Those non-sharable benefits continued to be 100% financed by the
former employers.
Congressional Research Service
R45478 · VERSION 1 · NEW
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former employers.

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