Changes in State Unemployment Insurance Legislation in 2008: Federal Enactments Extend Benefits, Providing Federal Funds to the States to Cover Costs; State Enactments Include New Minimum and Maximum Weekly Benefit Amounts and New Confidentiality and Disclosure Guidelines
Lancaster, Loryn, Monthly Labor Review
During 2008, there were five Federal legislative enactments and one final rule that affected the Federal-State unemployment compensation program.
Title IV of the Supplemental Appropriations Act, 2008 (P.L. 110-252) established the Emergency Unemployment Compensation (EUC08) program. Effective from July 2008 through March 2009, up to 13 weeks of benefits are available under this program to eligible jobless workers in all States. Individuals with benefits remaining in their EUC08 accounts at the end of March can collect those benefits through June 2009. This enactment also provided $110 million in grants to States for administrative costs of the unemployment insurance program. These benefits and administrative costs are entirely Federally financed.
The Social Security Income Extension for Elderly and Disabled Refugees Act of 2008 (P.L. 110-328) amended the Internal Revenue Code of 1986 to provide for the collection of certain unemployment compensation debts resulting from fraud using the Treasury Offset Program (through offset of Federal income tax refunds).
The Emergency Economic Stabilization Act, 2008 (P.L. 110-343) included a 1-year extension of the 0.2-percent Federal Unemployment Tax Act (FUTA) surtax through 2009.
The Unemployment Compensation Extension Act of 2008 (P.L. 110-449) expanded the current EUC08 program to provide up to 7 additional weeks of unemployment compensation to eligible individuals in all States. This enactment also expanded the EUC08 program by providing a second tier of benefits of up to 13 additional weeks for eligible individuals in those States with high unemployment rates. These benefits are available for weeks of unemployment beginning on or after November 21, 2008, through March 31, 2009, and no EUC08 payment may be made for any week of unemployment beginning after August 27, 2009. These benefits are entirely Federally funded.
The Worker, Retiree, and Employer Recovery Act of 2008 (P.L. 110-458) repealed the provision in the Pension Protection Act of 2006 (P.L. 109-280) that amended the Federal Unemployment Tax Act concerning treatment of pensions, retirement pay, annuities, or other similar payments. The 2008 legislation provides that unemployment compensation will not be reduced as a result of any payments of pension, retirement pay, annuity or other similar payments that may not be included in the gross income of the individual for the taxable year in which it was paid because it was part of a rollover distribution.
The Department of Labor issued a final rule (effective January 6, 2009) amending its regulations governing combined-wage claims under the unemployment compensation program. This rule amends the definition of "paying State" as follows: any "single State" in which the claimant had base period wages and employment, and in which the claimant qualifies for unemployment benefits, may be a "paying State."
The unemployment insurance confidentiality or disclosure final rule (effective October 27, 2006) required State laws to meet the rule requirements within 2 years. As of October 27, 2008, all State laws met the confidentiality or disclosure requirements.
Following is a summary of some significant changes in State unemployment insurance laws that occurred during 2008:
Financing. The quarterly 0.06-percent special assessment used to fund the Employment Security Enhancement Fund, applicable to certain employers, and the current tax rate structure for determining an employer's contribution rate, are extended from March 31, 2008, to September 30, 2010.
Up to $7,940,119 of Reed Act monies may be withdrawn from the Unemployment Compensation Trust Fund for administrative purposes, effective from May 29, 2008, to September 30, 2009. Whatever amount is withdrawn will not change the Employer Tax Schedules for the calendar year beginning January 1, 2010.
The State Unemployment Tax Act (SUTA) dumping prevention provisions that mandate transfer of experience by requiring that the rates of both employers be recalculated and made effective in accordance with the date such transfer or transfers occurred were modified. …