Lori Roberts, Senior Manager of the TALX Government Relations group explains the “fix” in HR 4213 related to part-time or temporary work.

The federal UI extension legislation signed by President Obama on July 22, 2010 (HR 4213), contains a provision to "fix" an unintended consequence regarding regular UI benefits and federal EUC (Emergency Unemployment Compensation) in instances where claimants had part-time or temporary employment.  Under the newly enacted legislation, states have four options to continue payment of EUC instead of regular UI in certain instances.  Please note, the state agency chooses the option; claimants do not choose the option.

The unintended consequence can occur when an EUC claimant can establish a second benefit year and is eligible for regular UI due to part-time or temporary work.  Under the second benefit year claim, many claimants were qualifying for a lower weekly unemployment benefit amount than they received for EUC or their original regular UI claim, because the part-time/temporary earnings were lower than their earnings used to establish the original claim.

In order to "fix" this unintended consequence, Section 502 of HR 4213 provides for the following options for continued payment of EUC instead of regular UI

If—

‘‘(A) an individual has been determined to be entitled to emergency unemployment compensation with respect to a benefit year,‘‘(B) that benefit year has expired,‘‘(C) that individual has remaining entitlement to emergency unemployment compensation with respect to that benefit year, and‘‘(D) that individual would qualify for a new benefit year in which the weekly benefit amount of regular compensation is at least either $100 or 25 percent less than the individual’s weekly benefit amount in the benefit year referred to in subparagraph (A), then the State shall determine eligibility for compensation as provided in paragraph (2).

“(A)The State shall, if permitted by State law, establish a new benefit year, but defer the payment of regular compensation with respect to that new benefit year until exhaustion of all emergency unemployment compensation payable with respect to the benefit year referred to in paragraph (1)(A); ‘‘(B) The State shall, if permitted by State law, defer the establishment of a new benefit year (which uses all the wages and employment which would have been used to establish a benefit year but for the application of this paragraph), until exhaustion of all emergency unemployment compensation payable with respect to the benefit year referred to in paragraph(1)(A); ‘‘(C) The State shall pay, if permitted by State law— ‘‘(i) regular compensation equal to the weekly benefit amount established under the new benefit year, and‘‘(ii) emergency unemployment compensation equal to the difference between that weekly benefit amount and the weekly benefit amount for the expired benefit year; or ‘‘(D) The State shall determine rights to emergency unemployment compensation without regard to any rights to regular compensation if the individual elects to not file a claim for regular compensation under the new benefit year.’’.

Three key points to keep in mind about the "fix" and the options: 1) A "fix" is only applicable to claimants whose regular weekly UI benefit amount in the new benefit year would be at least either $100 or 25% less than their original weekly UI amount; 2) the legislative provisions are not retroactive and only apply to claimants whose benefit years expire after the date the legislation was enacted (July 22, 2010); and 3) only state UI agencies may choose one of the four available options, not claimants; a state must only choose one option and apply it to all applicable claimants.