Unemployment Benefits - Opportunities for Extension and Modernization

In many states, Unemployment Benefit Programs have left low-wage workers, women and part-time workers struggling to qualify for the program. Other growing segments of the workforce also fall through the cracks, including temporary workers, older workers and immigrant workers. Unemployment Insurance is designed to protect families from devastating financial hardship as a result of temporary job loss; however, many of the state rules have been outdated for decades.

The Unemployment Insurance Benefit program was basically designed for the workforce of the Great Depression. The workforce today is very different – and includes women heads of household, for example. Women are more likely to leave a job to care for a dependent – and are left without income protection when they make this choice. One in five US workers works part-time. However, 23 states including Kentucky, Rhode Island, and Texas, do not allow UI benefits for unemployed part-time workers.

The American Recovery and Reinvestment Act (ARRA) provided opportunity to extend benefit timelines to address devastating effects of record unemployment rates nation-wide. ARRA also created incentives to encourage states to modernize their programs. The ARRA unemployment provisions provide 34-53 weeks of Emergency Unemployment Compensation (EUC), full federal funding for another 13-20 weeks of Extended Benefits (a program normally funded 50 percent by the states), an increase of $25 per week in both state and federal UI benefits, and a 15-month 65-percent COBRA subsidy for jobless workers.

The ARRA also included the Unemployment Insurance Modernization Act (UIMA), which provided $7 billion in financial incentives to close gaps in state unemployment insurance benefit programs that make it difficult for working people to claim benefits. States have until August 2011 to submit applications for incentive funding to the DOL. States qualify for 1/3 of the UIMA funding if it has in place a policy called “alternative base period. ” Most states still use an old formula that excludes workers’ earnings in the most recent quarter. The alternative base period considered the most recent earnings of the individual worker when setting the unemployment benefit payment. To qualify for the remaining 2/3 ARRA incentive funding, a state must provide benefits to workers in at least two of four categories:

• PT workers denied benefits because the state has been requiring them to seek FT work.
• Individuals who leave work for a compelling reason (including domestic violence, caring for a sick relative, relocating for a spouses job)
• Workers with dependent family members who would qualify for up to $15 more in weekly benefits per dependent
• Permanently laid-off workers who require access to training to improve their skills with the help of an extra 26 additional weeks EB

Some states, including California, Colorado, Georgia, and Maryland, have undertaken modernization efforts in the wake of the ARRA Unemployment Insurance Modernization Act. The National Employment Law Project (NELP) provides technical assistance and coordination around modernization efforts. NELP’s website includes state-by-state analysis, Modernization Model Legislation, analysis of reforms undertaken to date and is a clearing house of information related to Unemployment Benefit extension and modernization. http://www.nelp.org/