Updated February 26, 2018
Unemployment Compensation (UC) and Family Leave
In general, unemployed workers who voluntarily exit the
workforce for the care of a family member—including the
birth, adoption, or care of a child—would be ineligible for
unemployment compensation (UC) based upon their lack of
availability for work. Yet some of these individuals may be
eligible for UC benefits once they are available for work.
From 2000 until 2004, states had the ability to create a
program using UC funds to provide benefits to individuals
on leave or otherwise unemployed after the birth or
adoption of a child (i.e., to use UC to support workers on
parental leave). No state created such a program.
The joint federal-state UC program provides income
support through UC benefit payments. Although there are
broad requirements under federal law regarding UC
benefits and financing, the specifics are set out under each
state’s laws. States administer UC benefits with U.S.
Department of Labor (DOL) oversight, resulting in 53
different UC programs operated in the states, the District of
Columbia, Puerto Rico, and the Virgin Islands. The UC
program’s two main objectives are to (1) provide temporary
partial wage replacement to involuntarily unemployed
workers and (2) stabilize the economy during recessions.
To receive UC benefits, claimants must meet state
eligibility requirements, including
loss of job through no fault of their own or had to quit
job for a “good cause” reason.
a sufficient, recent work and earnings history.
must be able, available, and actively searching for work.
Although federal law establishes these broad requirements,
state law and regulations determine the specific thresholds
and definitions. DOL produces a compilation of state laws
and regulations, including state definitions of each of the
terms. See DOL, 2017 Comparison of State Unemployment
Insurance Laws, at https://workforcesecurity.doleta.gov/
UC and Paid Family Leave
Although the Family and Medical Leave Act of 1993
(FMLA; P.L. 103-3, as amended) provides eligible workers
with a federal entitlement to unpaid leave for a limited set
of family caregiving needs (including the care of and
bonding with a new child), no federal law requires privatesector employers to provide paid leave of any kind.
may combine state family leave insurance benefits with
unpaid leave. At the state level, there has been interest in
using the UC program to provide income support to
workers on unpaid leave covered by the FMLA. Currently,
states do not have the authority to provide UC benefits to
workers who are absent from work or unemployed as a
result of family caregiving responsibilities.
For more information on states that offer paid family leave
insurance, see CRS Report R44835, Paid Family Leave in
the United States.
Why UC Benefits Are Not Available to
an Individual Not Working Because of
the Birth or Adoption of a Child?
Depending on the state’s UC laws and regulations, there are
three potential reasons why UC benefits may not be
available to an individual who is unemployed or on a leave
of absence because of the birth or adoption of a child. The
individual may be
1. ineligible or disqualified because he or
she is categorically excluded in state UC
law or regulation,
2. disqualified because the reason the
individual left a job is not considered for
good cause, or
3. ineligible because he or she is not able,
available, and actively searching for
Specific State UC Law
To be eligible for UC benefits, individuals generally must
be laid off from a job and unemployed with respect to a
given week. Under some state UC laws, workers taking
family leave or other leaves of absence because of an
inability to work due to medical reasons may be considered
categorically ineligible for UC benefits.
Did Not Quit for “Good Cause”
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. Some states specifically consider
quitting due to family obligations stemming from the illness
or disability of an immediate family member a good cause.
(For those states, see Table 5.5 in DOL, 2017 Comparison
of State Unemployment Insurance Laws, at
Currently, employees may access paid family leave if
offered by an employer, and some workers in certain states
Unemployment Compensation (UC) and Family Leave
Not Meeting the Able, Available, and Actively
Searching for Work Criteria
All states require that individuals be able, available, and
actively conducting a job search to qualify for UC benefits.
Individuals taking unpaid family leave due to family
caregiving needs may not meet this availability standard
and would, therefore, be ineligible for UC during that time.
Once an individual is available for work (as defined by the
state), he or she may become eligible for benefits if the
underlying cause of unemployment had been considered for
good cause (i.e., has not disqualified the worker).
The Birth and Adoption UC Regulation
(BAA-UC, “Baby UI”) [Repealed]
Although as many as 15 states introduced legislation to
provide for BAA-UC, their efforts were met with strong
opposition from business interests, and little headway was
made toward implementation of BAA-UC. No state passed
such a BAA-UC law. In Massachusetts, a three-year BAAUC pilot program was enacted by the legislature as an
amendment to a supplemental budget bill, but was vetoed
on August 20, 2000. It was returned with instructions to
consider Governor Cellucci’s own proposal: an employer
tax credit of 50% of wages (up to $2,550 per employee)
paid to employees on leave, with infants or newly adopted
children. The state’s legislature adjourned without taking up
the governor’s proposal.
For a short time, beginning in 2000 under the Clinton
Administration, states had the ability to create a program to
provide UC benefits to individuals on parental leave or who
were unemployed after the birth or adoption of a child. In
qualifying for UC under this program, the individual would
not have been required to be able and available for work in
the sense traditionally used by DOL and the states. Instead,
parents of newborns and newly adopted children would
have been viewed as meeting the federal able-and-available
requirements (as implemented through state laws) under the
premise that the parents’ long-term attachment to the
workforce would be strengthened and promoted by the
payment of UC benefits. On June 13, 2000, DOL published
the Birth and Adoption UC (BAA-UC) Final Rule in the
Federal Register at 65 Federal Register 37210, at
On June 26, 2000, a lawsuit was filed in federal court
seeking to bar the Clinton Administration from
implementing BAA-UC program regulations (see LPA, Inc.
v. Chao, 211 F.Supp. 2d 160 (D.D.C. 2002)). The lawsuit
was rejected by a federal district court in the District of
Columbia on July 24, 2002, by which time the
Administration had changed. The court ruled that the
plaintiffs lacked standing to challenge the rule since no
state had implemented a BAA-UC experiment.
The BAA-UC Experiment
The final regulation establishing the voluntary BAA-UC
experiment, colloquially referred to as “Baby UI,” went into
effect on August 14, 2000. The regulation allowed states to
use their UC programs to provide UC benefits to parents
who take unpaid leave under the FMLA or other approved
unpaid leave or otherwise take time off from employment
after the birth or adoption of a child.
The BAA-UC experiment was removed from federal
regulations by a final rule published in the Federal Register
on October 9, 2003, effective November 10, 2003. (See
U.S. Department of Labor, “CFR Part 604, Unemployment
Compensation—Trust Fund Integrity Rule; Birth and
Adoption Unemployment Compensation; Removal of
Regulations; Final Rule,” 68 Federal Register 58539,
October 9, 2003, at https://www.gpo.gov/fdsys/pkg/FR2003-10-09/pdf/03-25507.pdf.)
States were required to elect the voluntary program by
enacting legislation to make BAA-UC a part of their UC
programs. DOL provided model legislation to the states in
U.S. Department of Labor, Unemployment Insurance
Program Letter No. 26-00, on May 31, 2000, at
Controversy and Lawsuit
The BAA-UC experiment was highly controversial.
Opponents argued that the program changed the
fundamental purpose of the UC system by (1) changing the
definition of able and available for work and (2) potentially
negatively impacting the solvency of state UC programs
(i.e., through additional program expenditures). Proponents
supported using the program as a tool for expanding the use
of family and medical leave. (For examples of the
assertions, see the U.S. Congress, House Committee on
Ways and Means, Subcommittee on Human Resources,
Unemployment Compensation and the Family and Medical
Leave Act, 106th Cong., 2nd sess., March 9, 2000, 106-114,
On December 4, 2002, after a review of the BAA-UC Final
Rule as part of a DOL-wide review of all regulations, the
Bush Administration proposed a repeal of the BAA-UC
regulation. DOL concluded that the BAA-UC experiment
was poor policy and a misapplication of federal UC law
relating to able-and-available requirements.
Paid Parental Leave in the President’s
The President’s budget proposal for FY2019 would require
states to establish a paid parental leave benefit by 2020
using the UC program as its administrative framework.
States would be required to provide six weeks of benefits to
a worker on leave or otherwise absent from work for the
birth or adoption of the worker’s child. States would have
discretion to determine the parameters of eligibility and
financing for this new paid parental leave benefit. (The
same parental leave proposal was also included in the
President’s budget proposal for FY2018.)
Julie M. Whittaker, Specialist in Income Security
Katelin P. Isaacs, Analyst in Income Security
Unemployment Compensation (UC) and Family Leave
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.
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