Performance Goal ETA 4.2: Payments to Unemployed Workers

Facilitate timely and accurate payments to unemployed workers.

Other Information:

Rising unemployment has put enormous strain on the safety net for workers’ incomes provided by states’ UI trust funds. Yet clearly, millions of workers and their families would have suffered even more without this program, and spending by those receiving benefit payments has helped to stabilize economic activity. The federal-state UI program, authorized by Title III of the Social Security Act, provides temporary, partial wage replacement to unemployed workers, providing them with income support when work is unavailable or impossible to find. To be eligible for benefits, unemployed workers must have worked recently, be involuntarily unemployed, and be able and available for work. Providing Services for the Unemployed -- The federal role in UI is to set broad policy for the program, establish performance measures and standards, provide technical assistance to states, monitor state performance, ensure conformity and compliance of state laws and operations with federal law, and fund the administration of state and federal UI programs. While states must meet minimum federal eligibility standards, an unemployed worker in one state may not be eligible under another state’s law. In order to provide incentives to states to enact specific reforms that expand UI benefit eligibility, such as eligibility of part-time workers, Congress made $7 billion available to states in UI Modernization Incentive Payments. The UI program is the entry point for unemployed workers to One-Stop Career Centers, where they receive services that speed their return to work and enhance their long-term economic security. Therefore, as a strategy for improving program performance nationwide, UI funds states’ Reemployment and Eligibility Assessments: in-person interviews with selected UI beneficiaries to promote quicker reemployment and to ensure continuing eligibility requirements are met. Other performance improvements for UI have been established: additional tools and resources to help states prevent tax and benefit fraud and reduce benefit overpayments; the National Directory of New Hires to improve detection of fraud and improper payments; and electronic collection of job separation information from employers to improve the accuracy of eligibility determinations and speed initial payments to beneficiaries. In addition, UI has developed a set of legislative proposals – the Unemployment Compensation Integrity Act of 2010 – that will give states new tools and additional resources to prevent, detect, and collect improper UI benefit payments and delinquent employer tax contributions. There is no federal cost associated with this proposal, which is expected to reduce overpayments by $2.6 billion and increase tax revenues by $318 million over 10 years. UI is also participating in the Department of Labor-Department of Treasury multiagency initiative to strengthen and coordinate federal and state efforts to enforce statutory prohibitions and to identify and deter employee misclassification as independent contractors. Misclassification is used by some employers to avoid UI taxes as well as to avoid paying the minimum wage or overtime required by the federal Fair Labor Standards Act.

Stakeholder(s):

• Unemployed Workers

Indicator(s):

Indicator:1

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