Unemployment Insurance:
Programs and Benefits
Julie M. Whittaker
Specialist in Income Security
Katelin P. Isaacs
Analyst in Income Security
January 26, 2015
Congressional Research Service
7-5700
www.crs.gov
RL33362
Unemployment Insurance: Programs and Benefits
Summary
The federal-state Unemployment Compensation (UC) program provides income support to
eligible workers through the payment of UC benefits during a spell of unemployment. UC
benefits are available for a maximum duration of up to 26 weeks in most states. Unemployment
benefits may be extended for up to 13 or 20 weeks by the Extended Benefit (EB) program under
certain state economic conditions.
Certain groups of workers who lose their jobs because of international competition may qualify
for income support through Trade Adjustment Act (TAA) programs. Unemployed workers may be
eligible to receive Disaster Unemployment Assistance (DUA) benefits if they are not eligible for
regular UC and if their unemployment may be directly attributed to a declared major disaster.
Former U.S. military servicemembers may be eligible for unemployment benefits through the
unemployment compensation for ex-servicemembers (UCX) program. The Emergency
Unemployment 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 benefit duration.
For an explanation of the impact of sequestration on unemployment insurance benefits, see CRS
Report R43133, The Impact of Sequestration on Unemployment Insurance Benefits: Frequently
Asked Questions, by Katelin P. Isaacs and Julie M. Whittaker.
For information on the temporary, now-expired Emergency Unemployment Compensation
(EUC08) program, which provided additional unemployment benefits depending on state
economic conditions during the period of July 2008 to December 2013, see CRS Report R42444,
Emergency Unemployment Compensation (EUC08): Status of Benefits Prior to Expiration, by
Katelin P. Isaacs and Julie M. Whittaker.
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Unemployment Insurance: Programs and Benefits
Contents
Introduction ...................................................................................................................................... 1
Unemployment Compensation ........................................................................................................ 2
Authorization ............................................................................................................................. 3
Appropriation and Outlays ........................................................................................................ 3
Administration ........................................................................................................................... 3
Eligibility for Regular Unemployment Compensation .............................................................. 3
Broad Federal Guidelines Result in Different State Requirements ..................................... 3
Base Period .......................................................................................................................... 4
Qualifying Wages or Employment ...................................................................................... 5
Data Collection Considerations ........................................................................................... 5
Determination and Duration of Regular Unemployment Compensation .................................. 6
UC Benefit Financing: Unemployment Taxes on Employers ................................................... 8
Federal Unemployment Tax Act .......................................................................................... 8
State Unemployment Tax Acts ............................................................................................ 9
Outstanding Loans from the Federal Unemployment Account ......................................... 12
Extended Benefit Program ............................................................................................................. 12
How an Extended Benefit Period Is Activated (and Deactivated) ........................................... 13
Special Rule ...................................................................................................................... 13
Additional Eligibility Requirements for EB ............................................................................ 14
Methods for Determining 20 Weeks of Full-Time Insured Employment .......................... 14
Unemployment Insurance and the Sequester ................................................................................. 15
FY2015 Sequester of UI Benefits ............................................................................................ 15
Tables
Table 1. State Unemployment Compensation Benefit Amounts, July 2014 .................................... 6
Table 2. State Unemployment Taxes: Taxable Wage Base and Rates, July 2014 ............................ 9
Table 3. Revenue and Expenditures Associated with
Unemployment Compensation, FY2001-FY2014 ...................................................................... 11
Contacts
Author Contact Information........................................................................................................... 16
Congressional Research Service
Unemployment Insurance: Programs and Benefits
Introduction
Certain benefits may be available to unemployed workers to provide them with income support
during a spell of unemployment. The cornerstone of this income support is the joint federal-state
Unemployment Compensation (UC) program, which may provide income support through the
payment of UC benefits for up to a maximum of 26 weeks.1 Other programs that may provide
workers with income support are more specialized. They may target special groups of workers, be
automatically triggered by certain economic conditions, be temporarily created by Congress with
a set expiration date, or target typically ineligible workers through a disaster declaration.
UC benefits may be extended at the state level by the permanent Extended Benefit (EB) program
if high unemployment exists within the state. Once regular unemployment benefits are exhausted,
the EB program may provide up to an additional 13 or 20 weeks of benefits, depending on worker
eligibility, state law, and economic conditions in the state. The EB program is funded 50% by the
federal government and 50% by the states.2
Former U.S. military servicemembers may be eligible for unemployment benefits through the
unemployment compensation for ex-servicemembers (UCX) program. The Emergency
Unemployment 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 benefit duration. (Please see CRS Report RS22440, Unemployment
Compensation (Insurance) and Military Service, by Julie M. Whittaker.)
If an unemployed worker is not eligible to receive UC benefits and the worker’s unemployment
may be directly attributed to a declared major disaster, that worker may be eligible to receive
Disaster Unemployment Assistance (DUA) benefits under the Stafford Act. The federal disaster
declaration will include information on whether DUA benefits are available. For information on
Disaster Unemployment Assistance, see CRS Report RS22022, Disaster Unemployment
Assistance (DUA), by Julie M. Whittaker.
Certain groups of workers who lose their jobs because of international competition may qualify
for additional or supplemental support through Trade Adjustment Act (TAA) programs or (for
certain workers aged 50 or older) through Reemployment Trade Adjustment Assistance (RTAA).
This report does not describe the TAA or RTAA programs. (Please see CRS Report R42012,
Trade Adjustment Assistance for Workers, by Benjamin Collins for information on these
programs.)
1 Currently, Arkansas provides up to 25 weeks; Michigan, Missouri, and South Carolina provide up to 20 weeks; and
the maximum duration of Unemployment Compensation (UC) in Florida, Georgia, Kansas, and North Carolina is
variable, based on the state unemployment rate. 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, by Katelin P. Isaacs. Two states have a maximum UC duration of more 26 weeks: Montana (up to
28 weeks) and Massachusetts (up to 30 weeks); however, UC duration is capped at 26 weeks when benefits from the
Extended Benefit (EB) program are available in these states.
2 A temporary, now-expired unemployment insurance program, the Emergency Unemployment Compensation
(EUC08) program, began in July 2008 and ended in December 2013. For details on EUC08, see CRS Report R42444,
Emergency Unemployment Compensation (EUC08): Status of Benefits Prior to Expiration, by Katelin P. Isaacs and
Julie M. Whittaker.
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Unemployment Insurance: Programs and Benefits
Within the unemployment insurance system, there are also two programs that provide alternative
benefits in lieu of benefits through the UC program: the Short-Time Compensation (STC) or
“work sharing” program and the Self-Employment Assistance (SEA) program. For details on
STC, see CRS Report R40689, Compensated Work Sharing Arrangements (Short-Time
Compensation) as an Alternative to Layoffs, by Julie M. Whittaker. For details on SEA, see CRS
Report R41253, The Self-Employment Assistance (SEA) Program, by Katelin P. Isaacs.
Some, but not all, types of unemployment insurance expenditures are subject to sequestration
under the Budget Control Act of 2011 (P.L. 112-25, as amended).3 UC, UCX, and UC benefits for
federal employees (UCFE) payments are exempt from the sequester, but EB, EUC08 (when
previously authorized), and most forms of administrative funding are subject to the sequester
reductions. For details on the impact of sequestration on unemployment insurance benefits, see
CRS Report R43133, The Impact of Sequestration on Unemployment Insurance Benefits:
Frequently Asked Questions, by Katelin P. Isaacs and Julie M. Whittaker.
This report describes two kinds of unemployment benefits in detail: regular UC and EB. The
report explains their basic eligibility requirements, benefits, and financing structures.
Unemployment Compensation
UC is a joint federal-state program financed by federal taxes under the Federal Unemployment
Tax Act (FUTA) and by state payroll taxes under the State Unemployment Tax Acts (SUTA). The
UC program has a direct impact on almost every business in the United States as most businesses
are subject to state and federal unemployment taxes. An estimated $5.1 billion in federal
unemployment taxes and $49.9 billion in state unemployment taxes will be collected in FY2014.
In FY2014, states will spend a projected $37.2 billion on regular UC benefits. Approximately
132.1 million jobs are covered by the UC program. As of December 2014, approximately 2.5
million unemployed workers received regular state UC benefits in a week and the 12-month
average weekly UC benefit was $315.
Originally, the intent of the UC program, among other things, was to help counter economic
fluctuations such as recessions.4 This intent is reflected in the current UC program’s funding and
benefit structure. When the economy grows, UC program revenue rises through increased tax
revenues while UC program spending falls as fewer workers are unemployed. The effect of
collecting more taxes than are spent dampens demand in the economy. This also creates a surplus
of funds or a “cushion” of available funds for the UC program to draw upon during a recession.
In a recession, UC tax revenue falls and UC program spending rises as more workers lose their
jobs and receive UC benefits. The increased amount of UC payments to unemployed workers
dampens the economic effect of earnings losses by injecting additional funds into the economy.
3 For details on the sequester under the Budget Control Act of 2011, as amended, see CRS Report R42050, Budget
“Sequestration” and Selected Program Exemptions and Special Rules, coordinated by Karen Spar.
4 See, for example, President Franklin Roosevelt’s remarks at the signing of the Social Security Act at
http://www.ssa.gov/history/fdrstmts.html#signing.
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Unemployment Insurance: Programs and Benefits
Authorization
The underlying framework of the UC system is contained in the Social Security Act. Title III of
the act authorizes grants to states for the administration of state UC laws, Title IX authorizes the
various components of the federal Unemployment Trust Fund (UTF), and Title XII authorizes
advances or loans to insolvent state UC programs.
Appropriation and Outlays
The federal government provides funds for federal and state UC program administration, the
federal share of EB payments, and federal loans to insolvent state UC programs.5 In FY2014,
states were projected to receive an estimated $4.3 billion from the federal government for the
administration of their UC programs.6
Administration
The U.S. Department of Labor (DOL) administers the federal portion of the UC system, which
operates in each state, the District of Columbia, Puerto Rico, and the Virgin Islands. Federal law
sets broad rules that the 53 state programs must follow.7 These include the broad categories of
workers that must be covered by the program, the method for triggering the EB program, the floor
on the highest state unemployment tax rate to be imposed on employers (5.4%), and how the
states will repay UTF loans. If the states do not follow these rules, their employers may lose a
portion of their state unemployment tax credit when their federal income tax is calculated. The
federal tax pays for both federal and state administrative costs, the federal share of the EB
program, loans to insolvent state UC accounts, and state employment services.8
Eligibility for Regular Unemployment Compensation
Broad Federal Guidelines Result in Different State Requirements
Whereas federal laws and regulations provide broad guidelines on UC benefit coverage,
eligibility, and benefit determination, the specifics of regular UC benefits are determined by each
state. This results in essentially 53 different programs. States determine UC benefit eligibility,
payments, and duration through state laws and program regulations. Generally, UC eligibility is
5 When it was authorized, the EUC08 program also was federally funded. For more details on EUC08 financing, see
CRS Report R42444, Emergency Unemployment Compensation (EUC08): Status of Benefits Prior to Expiration, by
Katelin P. Isaacs and Julie M. Whittaker.
6 In FY2014, states were not estimated to receive any funding for the federal share of EB payments; however, states
were estimated to receive $5.4 billion for the temporary, now-expired EUC08 program in FY2014. U.S. Department of
Labor, UI Outlook, FY2015 Midsession Review, July 2014, available at http://www.workforcesecurity.doleta.gov/
unemploy/content/midsession_review.asp.
7 The District of Columbia, Puerto Rico, and the Virgin Islands are considered to be states in UC law.
8 For more information on job search assistance and job search training for unemployed workers, see CRS Report
R43301, Programs Available to Unemployed Workers through the American Job Center Network, by Benjamin
Collins, David H. Bradley, and Katelin P. Isaacs.
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Unemployment Insurance: Programs and Benefits
based on attaining qualified wages and employment in covered work over a 12-month period
(called a base period) prior to unemployment.
Base Period
The base period is the time period during which wages earned or hours/weeks worked are
examined to determine a worker’s monetary entitlement to UC. Almost all states use the first four
of the last five completed calendar quarters preceding the filing of the claim as their base period.
This may result in a lag of up to five months between the end of the base period and the date a
worker becomes unemployed. As a result there are some instances when workers with substantial
labor market attachment are ineligible for UC benefits. In particular, recent entrants to the
workforce, or re-entrants, may be ineligible under this definition. Federal law allows states to
develop expanded definitions of the base period.
A list of states’ base periods can be found at http://ows.doleta.gov/unemploy/pdf/uilawcompar/
2014/monetary.pdf in Table 3-2.
Alternative Base Period
More than two-thirds of states allow the use of an alternative base period (ABP) for workers
failing to qualify under the regular base period. For example, if the worker fails to qualify using
wages and employment in the first four of the last five completed calendar quarters, then the state
might use wages and employment in the last four completed calendar quarters.
Extended Base Period
Many states allow workers who have no wages in the current base period to use older wages and
employment under certain conditions. These conditions typically involve illness or injury. For
example, a worker who was injured on the job and who has collected workers’ compensation
benefits may use wages and employment preceding the date of the worker’s injury to establish
eligibility.
Base Period Provisions in the 2009 Stimulus Package
The 2009 stimulus package (P.L. 111-5) provided up to $7 billion to states as an incentive to
make changes to their unemployment programs. States had to apply for these funds by August 22,
2011, and no payment could occur after September 30, 2011. A total of $4.4 billion of the $7
billion fund was distributed to states. By law, the remaining $2.6 billion became unrestricted
funds within the Federal Unemployment Account of the UTF.
One-third of a state’s share of this amount was contingent on state law allowing use of a base
period that included the most recently completed calendar quarter before the start of the benefit
year for the purpose of determining UC eligibility. The remaining two-thirds of a state’s share of
the $7 billion was contingent on qualifying for the first one-third payment (by adopting an
alternative base period definition), plus adopting two of four additional provisions.9
9 For more information on unemployment modernization provisions in the American Recovery and Reinvestment Act
(continued...)
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Unemployment Insurance: Programs and Benefits
Qualifying Wages or Employment
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 monetarily eligible to receive any UC
benefits. The methods that states use to determine monetary eligibility vary greatly.
Multiple of High-Quarter Wages. Under this method, workers must earn a certain dollar amount
in the quarter with the highest earnings of their base period. Workers must also earn total base-
period wages that are a multiple—typically 1.5—of the high-quarter wages. For example, if a
worker earns $5,000 in the high quarter, the worker must earn at least another $2,500 in the rest
of the base period. States require earnings in more than one quarter to minimize the likelihood
that workers with earnings in only one quarter receive benefits. Although the worker might be
monetarily eligible based upon the earnings accrued in one quarter, these “multiple of high
quarter wages” states do not deem those workers to be substantially attached to the labor market.
Multiple of Weekly Benefit Amount. Under this method, the state first computes the worker’s
weekly benefit amount. The worker must have earned a multiple—often 40—of this amount
during the base period. For example, if a worker’s weekly benefit amount equals $100, then the
worker will need base period earnings of 40 times $100, or $4,000, before any UC would be paid.
Most states also require wages in at least two quarters. Some states have weighted schedules that
require varying multiples for varying weekly benefits. Some states allow a reduced weekly
benefit amount to meet the multiple requirement.
Flat Qualifying Amount. States using this method require a certain dollar amount of total wages to
be earned during the base period. This method is used by most states with an annual-wage
requirement for determining the weekly benefit and by some states with a high-quarter
wage/weekly benefit requirement.
Weeks/Hours of Employment. Under this method, the worker must have worked a certain number
of weeks/hours at a certain weekly/hourly wage.
Data Collection Considerations
The wide variation seen in state UC program laws and regulations also exists among the states’
data collections. All states collect information on earnings by quarter for each worker. A handful
of states collect information on the number of weeks worked during the base period. Even fewer
states collect information on the numbers of hours worked during a quarter. As a result, most
states use information on quarters worked, quarterly earnings, and cumulative earnings in
determining eligibility and the amount of benefit.10 It does not appear that any state uses both
hours of work and weeks of work in the base period calculation.
(...continued)
of 2009 (P.L. 111-5), please see CRS Report R40368, Unemployment Insurance Provisions in the American Recovery
and Reinvestment Act of 2009, by Julie M. Whittaker.
10 The U.S. DOL 2014 Comparison of State Unemployment Insurance Laws reports that the following states used the
measure of “weeks” in determination of eligibility or benefit amount: New Jersey, Ohio, and Pennsylvania. Only
Washington appears to use the number of hours worked in eligibility or benefit determination.
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Unemployment Insurance: Programs and Benefits
Determination and Duration of Regular
Unemployment Compensation
Generally, benefits are based on wages for covered work over a 12-month period (the “base
period” or “alternative base period,” described above). Most state benefit formulas replace half of
a claimant’s average weekly wage up to a weekly maximum. All states disregard some earnings
during unemployment as an incentive to take short-term or part-time work while searching for a
permanent position. Generally, the worker’s UC payment equals the difference between the
weekly benefit amount and earnings.
In December 2014, approximately 2.5 million unemployed workers received regular state UC
benefits in a week. In June 2014, the average weekly benefit was $314.11 Table 1 lists the
minimum and maximum UC benefit amounts for each state. Weekly maximums as of July 2014
ranged from $133 (Puerto Rico) to $679 (Massachusetts) and, in states that provide dependents’
allowances, up to $1,019 (Massachusetts). Among individuals receiving benefits, the average
regular UC benefit duration in December 2014 was 16.4 weeks.
Table 1. State Unemployment Compensation Benefit Amounts, July 2014
(in dollars)
Minimum Weekly
Minimum If
Maximum Weekly
Maximum If
UC Benefit
Dependents’
UC Benefit
Dependents’
Amount
Allowancea
Amountb
Allowancea
Alabama 45
—
265
—
Alaska 56
128
370
442
Arizona 123
—
240
—
Arkansas 81
—
451
—
California 40
—
450
—
Colorado 25
—
532
—
Connecticut 15 30 590 665
Delaware 20
—
330
—
District of Columbia
50
—
359
—
Florida 32
—
275
—
Georgia 44
—
330
—
Hawai 5
—
544
—
Idaho 72
—
383
—
Illinois 51
77
418
569
Indiana 37
—
390
—
11 UC benefits are available for up to 26 weeks in most states—exceptions include up to 30 weeks in Massachusetts; up
to 28 weeks in Montana; up to 25 weeks in Arkansas; up to 20 weeks in Michigan, Missouri, and South Carolina; up to
12-23 weeks in Florida, depending on the state unemployment rate; up to 14-20 weeks in Georgia, depending on the
state unemployment rate; up to 16-26 weeks in Kansas, depending on the state unemployment rate; and up to 12-20
weeks in North Carolina, depending on the state unemployment rate. For more details on states with reduced maximum
durations in their UC programs, see CRS Report R41859, Unemployment Insurance: Consequences of Changes in State
Unemployment Compensation Laws, by Katelin P. Isaacs.
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Unemployment Insurance: Programs and Benefits
Minimum Weekly
Minimum If
Maximum Weekly
Maximum If
UC Benefit
Dependents’
UC Benefit
Dependents’
Amount
Allowancea
Amountb
Allowancea
Iowa 62
75
416
511
Kansas 118
—
474
—
Kentucky 39
—
415
—
Louisiana 10
—
247
—
Maine 67
100
386
579
Maryland 50
90
430
—
Massachusetts 33 49 679 1,019
Michigan 117
147
362
—
Minnesota 25
—
412
640
Mississippi 30
— 235 —
Missouri 35
—
320
—
Montana 134
—
471
—
Nebraska 70
—
372
—
Nevada 16
—
412
—
New Hampshire
32
—
427
—
New Jersey
87
100
636
—
New Mexico
75
112
406
456
New York
68
—
405
—
North Carolina
15
—
350
—
North Dakota
43
—
594
—
Ohio 116
—
418
564
Oklahoma 16
— 440 —
Oregon 128
—
549
—
Pennsylvania 70 78 573 581
Puerto
Rico 7 — 133 —
Rhode Island
41
91
566
707
South Carolina
42
—
326
—
South Dakota
28
—
352
—
Tennessee 30 — 275 —
Texas 63
—
454
—
Utah 26
—
487
—
Vermont 58
—
436
—
Virginia 60
—
378
—
Virgin Islands
33
—
468
—
Washington 151 — 637 —
West Virginia
24
—
424
—
Wisconsin 54
— 370 —
Wyoming 34
—
475
—
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Unemployment Insurance: Programs and Benefits
Source: Congressional Research Service (CRS) table compiled from Significant Provisions of State Unemployment
Insurance Laws, July 2014, U.S. Department of Labor, Employment and Training Administration, at
http://www.workforcesecurity.doleta.gov/unemploy/content/sigpros/2010-2019/July2014.pdf.
a. The figures for minimum and maximum benefits include dependents’ al owances for the maximum number
of dependents.
b. If a state has dependents’ al owances and only one amount is given, the maximum is the same with or
without the allowance.
UC Benefit Financing: Unemployment Taxes on Employers
UC benefits are financed through employer taxes.12 The federal taxes on employers are under the
authority of the Federal Unemployment Tax Act (FUTA), and the state taxes are under the
authority given by the State Unemployment Tax Acts (SUTA). These taxes are deposited in the
appropriate accounts within the Unemployment Trust Fund (UTF).
Federal Unemployment Tax Act
The net FUTA tax rate on employers in states with UC programs that are in compliance with all
federal rules is 0.6% on the first $7,000 of each worker’s earnings per year. The FUTA tax rate for
employers is 6.0% on the first $7,000 of each worker’s earnings, but a 5.4% credit against the
federal FUTA tax is available to employers in states with complying UC programs, bringing the
net FUTA tax down to 0.6%.13 The 0.6% FUTA tax funds both federal and state administrative
costs as well as the federal share of the EB program, loans to insolvent state UC accounts, and
state employment services. Federal law defines which jobs a state UC program must cover,
provides rules concerning state borrowing from the UTF, and provides broad guidelines
concerning benefit eligibility, in order for the state’s employers to avoid paying the maximum
FUTA tax rate (6.0%) on the first $7,000 of each employee’s annual pay. The U.S. DOL projects
that $5.1 billion in FUTA taxes will be collected in FY2014.
Federal law requires that a state must cover jobs in firms that pay at least $1,500 in wages during
any calendar quarter or employ at least one worker in each of 20 weeks in the current or prior
year. The FUTA tax is not paid by government or nonprofit employers, but state programs must
cover government workers and all workers in nonprofits that employ at least four workers in each
of 20 weeks in the current or prior year.14
Congress first passed a temporary FUTA surtax in 1976 and since 1983 the surtax had been
applied as 0.2% on the first $7,000 of employee wages for a net total FUTA tax rate of 0.8%. P.L.
111-92 was the last law to extend the authorization of the FUTA surtax (through June 2011).
Since July 1, 2011, the authorization of the 0.2% FUTA surtax has lapsed.
12 For a more detailed description of UC financing, see CRS Report RS22077, Unemployment Compensation (UC) and
the Unemployment Trust Fund (UTF): Funding UC Benefits, by Julie M. Whittaker.
13 In tax year 2014, seven states and the Virgin Islands had a state tax credit reduction applied to the calculation of the
Federal Unemployment Tax Act (FUTA) tax. This tax credit reduction ranged from 1.2% to 1.7%. For more details, see
CRS Report RS22954, The Unemployment Trust Fund (UTF): State Insolvency and Federal Loans to States, by Julie
M. Whittaker.
14 Employers that are required to provide unemployment insurance coverage but are not required to pay the FUTA tax
generally reimburse state governments for the benefit payments related to their workers. The federal government
reimburses states for expenditures related to federal workers.
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Unemployment Insurance: Programs and Benefits
State Unemployment Tax Acts
States levy their own payroll taxes (SUTA taxes) on employers to fund regular UC benefits and
the state share of the EB program. The state unemployment tax rate on an employer is
“experience rated” in all states, that is, the SUTA rate is based on the amount of UC paid to
former employees. Generally, the more UC benefits paid to its former employees, the higher the
tax rate of the employer, up to a maximum established by state law. The experience rating is
intended to ensure an equitable distribution of UC program taxes among employers in
relationship to their use of the UC program, and to encourage a stable workforce. State ceilings
on taxable wages in July 2014 ranged from the $7,000 FUTA federal ceiling (3 states) to $41,300
(Washington State). The minimum SUTA rates ranged from 0.00% (4 states) to 2.80%
(Pennsylvania) in tax year 2014. Maximum SUTA rates ranged from 5.4% (10 states) to 12.27%
(Massachusetts) in tax year 2014. A projected $49.9 billion in SUTA taxes will be collected in
FY2014.
State UC revenue is deposited in the U.S. Treasury. These deposits are counted as federal revenue
in the budget. State accounts within the UTF are credited for this revenue. The U.S. Treasury
reimburses states from the appropriate UTF state accounts for their benefit payments. These
payments do not require an annual appropriation, but the reimbursements do count as federal
budget outlays.
Table 2. State Unemployment Taxes: Taxable Wage Base and Rates, July 2014
2014 Wages Subject
2014 Minimum State
2014 Maximum State
State
to Tax ($)
Unemployment Tax (%)a
Unemployment Tax (%)a
Alabama 8,000
0.95 7.10
Alaska 37,400
1.00 5.40
Arizona 7,000
0.03 7.17
Arkansas 12,000 1.20 7.10
California 7,000
1.50 6.20
Colorado 11,700 0.66 8.90
Connecticut 15,000 1.90
6.80
Delaware 18,500 0.30 8.20
DC 9,000
1.80
7.20
Florida 8,000
0.59
5.40
Georgia 9,500
0.02 5.40
Hawai 40,400
0.60 6.00
Idaho 35,200
0.54
5.40
Illinois 12,960
0.55
8.55
Indiana 9,500
0.52
7.62
Iowa 26,800
0.00
8.00
Kansas 8,000
0.11
9.40
Kentucky 9,600
1.00 10.00
Louisiana 7,700
0.10 6.20
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Unemployment Insurance: Programs and Benefits
2014 Wages Subject
2014 Minimum State
2014 Maximum State
State
to Tax ($)
Unemployment Tax (%)a
Unemployment Tax (%)a
Maine 12,000
0.73
6.80
Maryland 8,500
0.30 7.50
Massachusetts 14,000
1.26
12.27
Michigan 9,500
0.06
10.30
Minnesota 29,000 0.10 9.10
Mississippi 14,000 0.39 5.40
Missouri 13,000
0.00 9.75
Montana 29,000
0.42 6.12
Nebraska 9,000
0.00 5.40
Nevada 27,400
0.25 5.40
New Hampshire
14,000
0.05
7.00
New Jersey
31,500
1.20
7.00
New Mexico
23,400
0.10
5.40
New York
10,300
1.50
8.90
North Carolina
21,400
0.07
6.91
North Dakota
33,600
0.16
9.76
Ohio 9,000
0.30
8.50
Oklahoma 18,700 0.20 7.30
Oregon 35,000
1.80 5.40
Pennsylvania 8,750 2.80 10.89
Puerto Rico
7,000
2.40
5.40
Rhode Island
20,600b 1.69 9.79
South Carolina
12,000
0.09
7.81
South Dakota
14,000
0.00
9.50
Tennessee 9,000 0.15 10.00
Texas 9,000
0.51
7.41
Utah 30,800
0.40
7.40
Vermont 16,000 1.30 8.40
Virginia 8,000
0.52
6.62
Virgin Islands
22,500
1.50
6.00
Washington 41,300 0.14
5.82
West Virginia
12,000
1.50
7.50
Wisconsin 14,000 0.27 9.80
Wyoming 24,500 0.48 10.00
Source: CRS table compiled from Significant Provisions of State Unemployment Insurance Laws, July 2014, U.S.
Department of Labor, Employment and Training Administration, at http://www.workforcesecurity.doleta.gov/
unemploy/content/sigpros/2010-2019/July2014.pdf.
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a. Tax rates apply only to experience-rated employers; states apply different rates to new employers. These
rates reflect tax year 2014.
b. Applies to most employers. For employers subject to the highest SUTA tax rates (i.e., in the highest tax
group), however, the taxable wage base is $22,100.
Generally, during economic expansions, FUTA and SUTA revenue collections will exceed UC
outlays. During economic recessions, revenues generally will be less than UC outlays. For
example, UTF outlays significantly exceeded trust fund revenue in FY2001-FY2004, and again
starting in FY2008. From FY2005 to FY2007, UC revenue exceeded total UC outlays. Beginning
in FY2014, DOL estimated that revenue again exceeded outlays. Table 3 lists the total revenue
and outlays associated with the UC program from FY2001 through FY2014 (estimated).
Table 3. Revenue and Expenditures Associated with
Unemployment Compensation, FY2001-FY2014
(in billions of dollars)
2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014a
UC
Revenue,
Total
27.8 27.5 33.2 39.3 41.8 43.0 41.0 39.4 37.8 44.7 55.9 64.8 54.5 55.0
Federal Unemployment
Tax (FUTA)
6.9 6.6 6.5 6.6 6.7 7.1 7.3 7.2 6.7 6.4 6.6 5.4 5.5 5.1
State Unemployment
Taxes (SUTA)
20.8 20.9 26.7 32.7 35.1 35.9 33.7 32.2 31.1 38.3 49.3 59.4 49.0 49.9
UC Outlays, Totalb
28.1 50.9 54.3 42.5 32.6 31.5 32.7 43.0 119.7 156.4 113.5 90.4 66.5 43.9
Regular
Benefits
(UC)
27.3 42.0 42.0 36.9 31.2 30.2 31.4 38.1 75.3 63.0 48.5 44.3 39.6 37.2
Extended Benefits (EB)
c
0.16 0.32 0.16 c 0.02 0.02 0.02 4.1 8.0 11.9 4.9 0.11 0.0
Emergency
Unemployment
— 7.9 11 4.1 — — — 3.6 32.7 72.1 52.7 39.6
25.4 5.4
Compensation (EUC08)
Federal
Additional
— — — — — — — — 6.5 11.7 1.9 0.0 0.0 0.0
Compensation (FAC)
UCFE/UCXd
0.5 0.5 0.6 0.8 0.8 0.8 0.7 0.7 1.0 1.3 1.6 1.4 1.1 1.0
Trade
Benefits
0.3 0.3 0.4 0.5 0.6 0.5 0.6 0.6 0.1 0.2 0.2 0.2 0.2 0.4
Administrative
Costs
3.6 3.7 4.1 3.9 3.8 3.9 3.7 3.9 4.3 5.5 5.0 4.9 4.8 4.3
Source: U.S. Department of Labor, UI Outlook, January 2001-July 2014, and updates.
a. Estimated for FY2014.
b. Outlay rows may not sum to total due to rounding error.
c. Less than $5 million.
d. UC benefits for federal employees (UCFE) and former military servicemembers (UCX).
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Outstanding Loans from the Federal Unemployment Account
If a state trust fund account becomes insolvent, a state may borrow federal funds.15 DOL
maintains a list of all states with loans and includes the loan amounts.16 States are charged interest
on loans that are not repaid by the end of the fiscal year in which they were obtained.17
Extended Benefit Program
The EB 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
unemployment benefits (Extended Benefits) at the state level if certain economic situations exist
within the state.
The EB program is triggered when a state’s insured unemployment rate (IUR)18 or total
unemployment rate (TUR)19 reaches certain levels. 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
same 13-week period in each of the two previous years. There are two other optional thresholds
that states may choose. (States may choose one, two, or none.) If the state has chosen a given
option, they would provide the following:
• Option 1: an additional 13 weeks of benefits if the state’s IUR is at least 6%,
regardless of previous years’ averages.
• Option 2: an additional 13 weeks of benefits if the state’s TUR is at least 6.5%
and is at least 110% of the state’s average TUR for the same 13 weeks in either of
the previous two years; an additional 20 weeks of benefits if the TUR is at least
8% and is at least 110% of the state’s average TUR for the same 13 weeks in
either of the previous two years.20
15 For detailed information on loans to the states within the UTF, see CRS Report RS22954, The Unemployment Trust
Fund (UTF): State Insolvency and Federal Loans to States, by Julie M. Whittaker.
16 See http://www.workforcesecurity.doleta.gov/unemploy/budget.asp#tfloans.
17 The American Recovery and Reinvestment Act of 2009 (P.L. 111-5; the 2009 stimulus package) temporarily waived
interest payments, and no interest accrued on interest payments that came due from the time the stimulus package was
enacted (February 17, 2009) until December 31, 2010. Although states did not pay interest during this period, they were
still required to repay the principal on the underlying loans according to the schedule provided in federal law.
18 The insured unemployment rate (IUR) is the ratio of UC claimants divided by individuals in UC-covered jobs. The
IUR is substantially different from the total unemployment rate (TUR) because it excludes several important groups:
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, the insured unemployed rate excludes the following: those who have exhausted their UC
benefits (even if they receive 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.
19 The TUR is the ratio of unemployed workers to all workers (employed and unemployed) in the labor market. The
TUR is essentially a weekly 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.
20 P.L. 111-312 made some technical changes to certain triggers in the EB program. P.L. 111-312, as amended, allowed
states to temporarily use lookback calculations based on three years of unemployment rate data (rather than the
permanent-law lookback of two years of data) as part of their mandatory IUR and optional TUR triggers if states would
have otherwise triggered off or not been on a period of EB benefits. Using a two-year vs. a three-year EB trigger
(continued...)
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Each state’s IUR and TUR are determined by the state of residence (agent state) of the
unemployed worker rather than by the state of employment (liable state). EB benefits are not
“grandfathered” when a state triggers “off” the program. When a state triggers “off” of an EB
period, all EB benefit payments in the state cease immediately regardless of individual
entitlement.21
How an Extended Benefit Period Is Activated (and Deactivated)
The timing of when an EB period is activated depends on whether the trigger is based on the
state’s IUR or TUR.
• If EB is activated based upon the IUR (triggers “on”), the EB period is
immediately in effect. Few states trigger on to EB using an IUR based measure.
• If EB is activated based upon the TUR, the activation is subject to a different
requirement. By law, a state triggering on to an EB period based upon a TUR
based trigger will begin to offer those benefits on the third week after the first
week for which there is a state “on” indicator.22
The analogous rules apply for deactivating an EB period.
• If an EB period is deactivated based upon the state failing to meet IUR based
trigger requirements (triggers “off”), the EB period is immediately ended.
• If an EB period triggers off based upon a state failing to meet TUR based trigger
requirements, the EB period will end on the third week after the first week for
which there is a state “off” indicator.23
Special Rule
By federal law, no EB period shall last for a period of less than 13 consecutive weeks, and no EB
period may begin before the 14th week after the close of a prior EB period with respect to such
state.24
The Department of Labor produces trigger notices indicating which states qualify for EB
benefits—as well as EUC08 benefits when the program was authorized—and provides the
beginning and ending dates of payable periods for each qualifying state. The trigger notices
covering state eligibility for these programs can be found at http://ows.doleta.gov/unemploy/
claims_arch.asp. The IUR statistics change weekly, as they are based upon weekly programmatic
(...continued)
lookback was an important adjustment because some states were likely to trigger off of their EB periods despite high,
sustained—but not increasing—unemployment rates. This temporary option to use three-year EB trigger lookbacks
expired on or before the week of December 31, 2013.
21 EB benefits on interstate claims are limited to two extra weeks unless both the agent state (e.g., Texas) and liable
state (e.g., Louisiana) are in an EB period.
22 Section 203(a)(1) of P.L. 91-373, as amended.
23 Section 203(a)(2) of P.L. 91-373, as amended.
24 Section 203(b) of P.L. 91-373, as amended.
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data. The TUR statistics change monthly, as they are based upon monthly Local Area
Unemployment Statistics (LAUS) data.25
Additional Eligibility Requirements for EB
The EB program imposes additional federal restrictions on individual eligibility for benefits
beyond the state requirements for regular UC. The EB program requires that a worker make a
“systematic and sustained” work search. Furthermore, the worker may not receive benefits if he
or she refused an offer of “suitable” work, which is defined as “any work within such individual’s
capabilities.” In addition, P.L. 97-35, among other items, amended the EUCA to require that
claimants work at least 20 weeks of full-time insured employment or equivalent in insured wages
during their base period.
Methods for Determining 20 Weeks of Full-Time Insured Employment
States use one, two, or three different methods for determining an “equivalent” to 20 weeks of
full-time insured employment. These methods are described in both law (Section 202(a)(5) of the
EUCA) and regulation (20 CFR 615.4(b)). In practice, states that require any of these three
methods for receipt of regular UC benefits and do not allow for exceptions to those requirements
do not need to establish that the worker meets the 20 weeks of full-time insured employment. The
three methods are listed below:
• earnings in the base period equal to at least 1.5 times the high-quarter wages; or
• earnings in the base period of at least 40 times the most recent weekly benefit
amount, and if this alternative is adopted, it shall use the weekly benefit amount
(including dependents’ allowances) payable for a week of total unemployment
(before any reduction because of earnings, pensions or other requirements) that
applied to the most recent week of regular benefits; or
• earnings in the base period equal to at least 20 weeks of full-time insured
employment, and if this alternative is adopted, the term “full-time” shall have the
meaning provided by the state law.
The base period may be the regular base period or, if applicable in the state, the period may be the
alternative base period or the extended base period if that determined the regular UC benefit.
The underlying reasoning behind the requirements seems to be the following:
• Because there are 13 weeks in a quarter, 1.5 times the high-quarter wage is
roughly equivalent to 1.5 times 13 weeks of wages or about 20 weeks of wages.
(Many states require high quarterly earnings of under $2,000, which works out to
less than $4/hour under full-time assumptions. This is less than the federal
minimum wage of $7.25/hour.)
• Similarly, because the weekly benefit amount is roughly equivalent to half the
average weekly wage, 40 times the weekly benefit amount is roughly equivalent
to 20 weeks of wages.
25 The release schedule for LAUS data may be found at http://www.bls.gov/lau/lausched.htm.
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Unemployment Insurance and the Sequester26
The sequester order required by the Budget Control Act of 2011 (P.L. 112-25) and first
implemented on March 1, 2013 (delayed by P.L. 112-240),27 affected some, but not all, types of
unemployment insurance expenditures:
• Exempt from sequester are UC, UCX, and UCFE payments.
• Subject to sequester are EB, EUC08 (when authorized), and most forms of
administrative funding.
FY2015 Sequester of UI Benefits28
For FY2015, the sequester order from the Office of Management and Budget requires a 7.3%
reduction in all nonexempt nondefense mandatory expenditures, including EB benefits.29 With the
expiration of the EUC08 program at the end of 2013, EB benefits are the only type of UI benefit
subject to the FY2015 sequester. No EB benefits have been available in any state in FY2015 as of
the week of January 18, 2015.30
Any EB benefit payments in FY2015 must be reduced by 7.3% for weeks of unemployment
beginning on October 4, 2014, through September 26, 2015.31 This reduction only applies to the
federal share of EB benefits, which is 50% (states finance the other 50% of EB benefits). States
generally would be responsible for paying the amount of the EB benefit subject to sequester (i.e.,
making up the 7.3% reduction in FY2015). However, under federal law, a state may choose to
reduce EB benefits by the amount sequestered if the state changes its state unemployment law
and the reduction is equivalent to the sequester reduction.
26 For additional details on the sequester of certain components of the unemployment insurance system, see CRS
Report R43133, The Impact of Sequestration on Unemployment Insurance Benefits: Frequently Asked Questions, by
Katelin P. Isaacs and Julie M. Whittaker.
27 For additional details on the sequester, see CRS Report R42050, Budget “Sequestration” and Selected Program
Exemptions and Special Rules, coordinated by Karen Spar.
28 For details on the sequester of UI benefits in FY2013 and FY2014, see CRS Report R43133, The Impact of
Sequestration on Unemployment Insurance Benefits: Frequently Asked Questions, by Katelin P. Isaacs and Julie M.
Whittaker.
29 Office of Management and Budget (OMB), OMB Sequestration Preview Report to the President and Congress for
Fiscal Year 2015, Washington, DC, March 10, 2014, http://www.whitehouse.gov/sites/default/files/omb/assets/
legislative_reports/sequestration/sequestration_preview_report_march2014.pdf.
30 See U.S. Department of Labor, Employment and Training Administration, Extended Benefit Trigger Notice, 2015-1,
http://www.workforcesecurity.doleta.gov/unemploy/trigger/2015/trig_011815.html.
31 Employment and Training Administration, U.S. Department of Labor, Unemployment Insurance Program Letter
(UIPL) 2-15, October 15, 2014, http://wdr.doleta.gov/directives/attach/UIPL/ UIPL-2-15_Acc.pdf.
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Author Contact Information
Julie M. Whittaker
Katelin P. Isaacs
Specialist in Income Security
Analyst in Income Security
jwhittaker@crs.loc.gov, 7-2587
kisaacs@crs.loc.gov, 7-7355
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