The following is part of a bulletin going out to our clients. Since this is such a front of mind topic, I thought I'd post here as well so everyone can get an update.
Situation
With federal Unemployment Insurance (UI) extensions set to expire at the end of this month, the Senate Finance Committee introduced a legislative proposal on February 11, 2010, to reauthorize UI provisions. Included in the HIRE Act (Hiring Incentives to Restore Employment) proposal is a three month extension of federal Emergency Unemployment Compensation (EUC), Federal Additional Compensation (FAC), and federal funding of state Extended Benefits (EB). The estimated cost for these reauthorizations is $22 billion.
In addition, Senate Majority Leader Harry Reid (D-NV), has stated he will bring a smaller version of the Senate Finance Committee bill to the Senate floor on February 22, 2010.
What Employers Need to Know
The UI assistance measures originally implemented under the American Reinvestment and Recovery Act (ARRA) were extended through February 28, 2010, due to reauthorizations signed into law on December 19, 2009. A summary of UI provisions currently in effect are as follows:
Emergency Unemployment Compensation (EUC) – Persons who exhaust their 26 weeks of regular unemployment benefits may establish or augment eligibility for up to four tiers of EUC. The reauthorization does not add any additional weeks of EUC; it simply extends the date an EUC claim may be established. The program continues to be 100% federally funded from Treasury general revenue. The following table illustrates available EUC benefits.
|
EUC Program |
Available Weeks |
Trigger |
|
Tier I |
Up to 20 weeks |
All States |
|
Tier II |
Up to 14 weeks |
All States |
|
Tier III |
Up to 13 weeks |
*States with TUR > 6% or IUR > 4% |
|
Tier IV |
Up to 6 weeks |
*States with TUR >8.5% or IUR > 6% |
State Extended Benefits (EB) Full Federal Funding – Normally, the funding for state EB is shared – 50% by the states and 50% by the federal government - but was temporarily changed to 100% federal funding under ARRA. The December 2009 reauthorization pushes back the expiration of full federal funding from Treasury general revenue to the end of February 2010.
Note: By law, government entities and Indian tribes are not covered under normal federally shared or temporary full funding of state EB, and will liable for any EB paid to their unemployed workers.
Federal Additional Compensation (FAC) – A $25 supplement continues to be added to all weekly UI benefits paid, be they regular, EUC or EB. The financing of FAC will continue to be 100% federally funded from Treasury general revenue.
Next Steps
The HIRE Act proposal will not change any of the core UI elements noted above. It will simply push back the expiration date to May 31, 2010.
Tammy Mullin