Unemployment Insurance: Recent Legislation

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New Federal legislation made all States eligible to provide temporary emergency unemployment compensation benefits, financed entirely by Federal funds, for 13 or 20 additional weeks to unemployed workers who had exhausted their benefits. The emergency benefits program is effective from November 17, 1991, to June 13, 1992. Liberalized provisions were also included for ex-Servicemembers, nonprofessional school employees, and railroad workers. This legislation is Public law 102-164, as amended, enacted on November 15 and December 4, 1991, respectively.

On February 7, 1992, further legislation was enacted (Public law 102-244) that extended the expiration date of emergency benefits from June 13 to July 4, 1992, and provided an additional 13 weeks of federally funded benefits to workers eligible under Public Law 102-164, as amended.

In the 1970's, a permanent Federal-State program of extended benefits was established for workers who exhaust their entitlement to regular State benefits during periods of high unemployment. The program is financed equally from Federal and State funds. Extended benefits are "triggered" into effect when a State's unemployment rate among insured workers averages 5 percent or more over a 13-week period and is at least 20 percent higher than the rate for the same period in the two preceding years. If the insured unemployment rate reaches 6 percent, a State may by law disregard the 2-percent requirement in initiating extended benefits. Once triggered, extended benefit provisions remain in effect for at least 13 weeks. When a State's benefit period ends, extended benefits to individual workers also end--even for workers who have received less than their potential entitlement and are still unemployed. Further, once a State's benefit period ends, another Statewide period cannot begin for at least 13 weeks.

Most eligibility conditions for extended benefits and the amount of weekly benefits payable are determined by State law. However, under Federal law, a claimant applying for extended benefits must have had 20 weeks in full-time employment (or the equivalent in insured wages) and must meet special work requirements. A worker who has exhausted his or her regular benefits is eligible for a 50-percent increase in duration of benefits for a maximum of 13 weeks of extended benefits. There is, however, an overall maximum of 39 weeks of regular and extended benefits, Extended benefits are payable at the same rate as the weekly amount under the regular State program. (For a more comprehensive overview of the unemployment insurance program, see "Social Security Programs in the United States," Social Security Bulletin, September 1991, pp. 20-28).

1991-92 LEGISLATION

Because of the way extended benefits are triggered into effect, only nine jurisdictions qualified for them during the economic downturn of 1991: Alaska, Maine, Massachusetts, Michigan, Oregon, Puerto Rico, Rhode Island, Vermont, and West Virginia. Thus, there was broad interest in considering legislation to change how the extended benefits program is activated.

The extended benefits program is based on the insured unemployment rate (IUR)--the number of unemployed workers eligible for benefits in a State as a percent of the number of persons in unemployment-insurance covered employment in that State. By definition, the IUR does not include workers who have exhausted their benefits but are still unemployed. It was thought that the IUR worked well until the proportion of unemployed persons receivirig unemployment insurance dropped well below 100 percent--to about percent. Another problem with the IUR is that it has the effect of deactivating extended benefits in a State when substantial numbers of workers are exhausting their benefits, which reduces insured unemployment and therefore the IUR.

To correct this situation, Congress considered legislation that would base extended benefits on the total unemployment rate (TUR), rather than the insured unemployment rate. …