Apr 14 | Legislation to Reform UI
Updated: Apr 26, 2021
Senators Wyden and Bennet have released a proposal to permanently reform the Unemployment Insurance System. This is much needed work and we are glad to see two of our closest allies taking it on. While the proposal does not go far enough, it is an important start for the Fix UI discussion on the Hill. If passed and voted into law, the plan, as currently written, would be enacted by January 1, 2023. Both Senators' teams are open to feedback on the draft.
What does it do? You can read the full 100+ page discussion draft or the full draft summary here. Overall it aims to solve some of the problems we saw in this pandemic, by reforming the Extended Benefits program based on economic triggers and setting federal standards for state run UI systems that are more inclusive and robust.
Section 1: Extended Benefits:
Makes the Extended Benefits program (13 extra weeks of UI during times of high unemployment) completely federally funded. (Making this more like PEUC)
Changes Extended Benefits period triggers. There are a variety of triggers, but the predominate one is a 5.5% unemployment rate at the national or state level.
Adds more weeks of Extended Benefits (up to 52) with higher unemployment rates.
Allows people to stay at their EB payment amount even if their benefit year expires. (This would hopefully solve a huge problem people are facing right now with state's dropping their benefit amounts because their benefit year ended.)
Allows people to finish out the weeks they are entitled to even if their state's unemployment rate goes down.
Section 2: New Rules for State Unemployment Systems:
Requires states to offer at least 26 weeks of benefits (7 states offer less than 26 currently and some are currently talking about lowering this number.)
Weekly benefit amounts must replace 75% of the claimant’s average weekly earnings in the claimant’s highest quarter of earnings during the base period, up to the state’s maximum benefit amount.
The state maximum benefit amount must be equal to at least 2/3 of state’s average weekly wage. (For example: In NYS this would raise the max benefit from $504 to $1000)
Limits how much a state can reduce benefits based on part time work (therefore incentivizes part-time work, making a transition into recovery easier.)
States cannot deny people unemployment who are part-time workers or quit their job for compelling reasons (including domestic violence or sexual harassment, illness or disability of a family member, relocation of the individual’s workplace or the individual’s spouse, loss of child care, unusual risk to health or safety, and irregular work schedules or unpredictable pay).
Requires states to look at previous quarters for benefit amount eligibility if the claimant was unable to work recently.
Eliminates the waiting week.
Requires states to waive overpayments if the overpayment wasn't the fault of the claimant.
Requires work share programs for those with drastically reduced hours.
Expands eligibility to lower income workers by lowering the previous income amount required to be eligible for unemployment.
Expands eligibility to certain students and more with the ABC test.
Requires state systems to be more accessible.
Provides an addition $25 per dependent per week for unemployed individuals.
Creates Emergency Enhanced Unemployment Compensation which increases the wage replacement of unemployment benefits to 100% during public health emergencies or major disasters. (This is a boost similar to the FPUC.)
Establishes a federally financed Jobseeker Allowance program, providing 26 weeks of $250/week for self employed workers, workers just joining the workforce, and other jobless workers ineligible for unemployment. This program is also eligible for the EB extensions. (This program is similar to PUA.)
Interesting caveat for self employed: When unemployment is above 7.5 percent, individuals claiming a Jobseeker Allowance who have a documented history of self-employment may claim a supplement to their weekly Jobseeker Allowance such that their total Jobseeker Allowance replaces roughly 75% of their average weekly earned income in the most recently completed tax year.
Section 3: This section requires the Department of Labor to develop federal technology capabilities for administering unemployment compensation programs. The language specifies that the technology capabilities must include capabilities to administer the Jobseeker Allowance. More on this can be read here. It also suggests how states will pay for these enhanced programs with new regulations.
More can be read on all of the details of this proposal here. This link contains the full discussion text and a summary of it.
What is it missing?
"While most of the provisions of the Wyden/Bennet plan are solid, it still leaves much of the work and responsibility in the hands of state unemployment systems. This is worrisome. State systems are inequitable, underfunded, and entrenched in protocol that purposefully disenfranchises workers. We are pushing to fully federalize UI. We also believe workers should be eligible regardless of immigration status. And we are looking into whether the proposed EB triggers are the strongest possible solution. We want to ensure whatever triggers are decided on take into account hard-hit communities, especially people of color and low income workers as well as hard hit industries." -Stephanie Freed, Executive Director, ExtendPUA.org
There are several field experts releasing their own proposals for how to Fix UI. You can read one of those proposals released last week by Arindrajit Dube here. We are part of a coalition of organizations that will be releasing another detailed plan in the next month or so.
This permanent reform is going to require a fight and all of our voices will be needed. Our website actions still focus on further relief at the moment, but they will be updated as this proposal progresses.
Are we just forgetting about further relief?
NO. The pandemic is not over and while many groups have shifted their focus to permanent reform, ExtendPUA.org remains committed to fighting for the relief we need to survive this pandemic. Most of these reform proposals are long term asks and we all have to survive until then. We must ensure people who are unemployed due to the pandemic are set up to recover whether Congress passes UI reform legislation or not. Plus, even if this legislation passes, it does not have to be enacted until 2023.
What do we still need as relief?
We need benefits extended (with additional weeks for all programs including PUC) past September. They should be extended via automatic stabilizers, but if not, they should at least be extended through the end of the year. Our economy and job market are not on track to recover by September 6th. We need these benefits extended in July to avoid panic and lapses.
Tax relief on unemployment for 2020 & 2021.
A refundable tax credit for all of those who were unemployed in the fall of 2020 to compensate for the lack of FPUC.
Health insurance subsidies, discounts, and open enrollment extended past September.
Job training and placement programs.
Are we missing something on this relief list? Join the conversation and let us know what you need here.
Please take action at ExtendPUA.org. All of our actions are updated with new talking points based on the relief list above, and, as always, they are easy! You can easily email your legislators with a quick click and send form and so much more.
Plus keep an eye out for more on the reform conversation by following us on Twitter @ExtendPUA or by subscribing to our mailing list.