Changes in Unemployment Insurance Legislation in 2000

Kenyon, Robert, Jr., Lancaster, Loryn, Monthly Labor Review

Some States increased their maximum weekly benefit amounts and others modified the voluntary quit provision for situations involving domestic abuse; in the Federal arena, there were two legislative enactments and one rule issued

During 2000, there were two Federal legislative enactments that affected the Federal-State unemployment insurance program. The "Consolidated Appropriations Act, 2001" (P.L. 106-554) amends Federal law to treat Indian tribes similar to State and local governments. Briefly, services performed in the employ of tribes generally will no longer be subject to the Federal Unemployment Tax Act tax and, with some specified exceptions, will be required to be covered under State unemployment insurance laws. Further, tribes must be offered the reimbursement option and if a tribe fails to make required payments to the State's unemployment insurance fund or payments of interest or penalty, then the tribe will become liable for the Federal unemployment tax and the State may remove tribal services from State coverage. States also will lose the Federal share of extended benefits with respect to services performed for tribes. States with Indian tribes will be required to amend their laws to implement these requirements which were effective December 21, 2000.

The "Victims of Trafficking and Violence Protection Act of 2000" (P.L. 106-386) requires the Secretary of Labor, in consultation with the Attorney General, to conduct a national study to identify State unemployment insurance laws that address the separation from employment due to circumstances resulting from domestic violence and the receipt (or nonreceipt) of unemployment compensation, and to report to the Congress the results of the study along with recommendations in October 2001.

The U.S. Department of Labor issued the Birth and Adoption-Unemployment Compensation (BAA-UC) final rule, which was effective August 14, 2000. This ruling allows States (that choose to do so or on an experimental basis) to provide unemployment insurance as a partial wage replacement to employees who desire to take approved leave or otherwise leave their employment following the birth or placement for adoption of a child. States will have the latitude to define eligibility requirements for work history and benefit levels. While 15 State legislatures addressed the Birth and Adoption-Unemployment Compensation ruling in some manner during 2000, none had enacted the experimental effort by the year's end. However, several States have indicated that they may take up this issue in 2001.

Some States made significant changes to their unemployment insurance laws during 2000. For instance, Maryland, Utah, and Virginia increased their maximum weekly benefit amounts through legislation; in some other States, the weekly benefit amounts increase automatically. Delaware, Nebraska, New Jersey, and Rhode Island have made an exception to the voluntary quit provision for a separation from work in situations caused by domestic abuse. Michigan moved up its wage record system conversion date to October 2000 from December 2001. Tennessee, Vermont, and Virginia amended their waiting week provisions. Colorado, Kentucky, and South Carolina amended their pension deduction provisions. Reference to the Standard Industrial Classification system has been replaced by the North American Industry Classification System in three States--Alaska, Washington, and South Dakota.

Following is a summary of some significant changes in State unemployment insurance laws during 2000.

Alabama

Administration. Excess revenue generated by disclosing information to a consumer reporting agency will be deposited into the Employment Security Administration Fund, rather than the unemployment trust fund, with continuous appropriation for the administration of the State law.

Nonprofit organizations may place escrow funds into interest bearing accounts, which are used by the Department of Industrial Relations, for payment of unemployment insurance.

Financing. The termination date of a special assessment of 0.06 percent of all wages has extended from March 31, 2002, to March 31, 2004. The 0.06-percent reduction in regular contribution rates has extended to March 31, 2004.

Alaska

Administration. References to the Standard Industrial Classification system are replaced by the North American Industry Classification System.

The provision that defines what constitutes that an individual is in State-approved training in order to not be denied benefits is now under the Workforce Investment Act.

Benefits. Disqualification for misconduct connected with work is now limited to the insured worker's last work.

Arizona

Taxation. Beginning January 1, 2001, through December 31, 2007 (or, if earlier, when the Federal unemployment tax is reduced to 6 percent), the required income rates will decrease by 0.1 percent; the required income rate is used to adjust employer tax rates.

Beginning January 1, 2001, through December 31, 2007, a job training employer tax will be imposed on employers. This tax replaces State general fund monies as the funding source for the existing Arizona job training program. The monies will be collected by the Department of Economic Security and deposited in the job training fund.

Unexpended or unencumbered monies in the job training fund, upon repeal of the job training program in 2008, will revert to the unemployment compensation fund if the monies were …

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Publication information: Article title: Changes in Unemployment Insurance Legislation in 2000. Contributors: Kenyon, Robert, Jr. - Author, Lancaster, Loryn - Author. Journal title: Monthly Labor Review. Volume: 124. Issue: 1 Publication date: January 2001. Page number: 29. © 1999 U.S. Bureau of Labor Statistics. COPYRIGHT 2001 Gale Group.

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