Self-Employment Assistance

The U.S. Department of Labor announced last week the availability of $35 million in funds to develop, enhance and promote Self-Employment Assistance programs in all 50 states, the District of Columbia, Puerto Rico and the U.S. Virgin Islands. In addition, guidance released today clarifies that states may enroll participants who are currently receiving or eligible for federally funded Emergency Unemployment Compensation and Extended Benefits.

This announcement is the latest in a series of innovative reforms to the Unemployment Insurance program made possible through the Middle Class Tax Relief and Job Creation Act of 2012, which was signed by President Obama in February.

"Self-Employment Assistance has proven to be a valuable tool in helping many unemployed Americans realize the dream of business ownership," said Secretary of Labor Hilda L. Solis. "These grants will help states improve and expand the program while strengthening the economy and creating new jobs as more startups launch and grow."

Participants in these voluntary programs are provided with financial assistance equal to their Unemployment Insurance benefits while they receive important entrepreneurial training and resources to help launch their own businesses. In order to allow participants to devote full-time attention to creating new businesses that have the potential to create additional jobs, state work search requirements are waived.

Veterans Retraining Assistance Program

The U.S. Department of Labor’s Employment and Training Administration on May 8, 2012 issued guidance on the implementation and application process for the Veterans Retraining Assistance Program (VRAP), section 211 of the VOW to Hire Heroes Act of 2011 in Training and Employment Notice NO. 43-11. The Veterans Retraining Assistance Program directs the Department of Labor in conjunction with the Department of Veterans Affairs, to pay for up to 12 months of training in high demand jobs for veterans between the ages of 35 and 60.
A veteran must apply for the program before October 1, 2013, have proof of the period of last service and must be:

• between the ages 35 and 60;
• unemployed;
• not participating in any other Federal or state job training program for at least 6 months;
• not be dishonorably discharged;
• not eligible for any other VA education benefit program; and
• not in receipt of VA compensation due to Individual Employability;

Veterans who would like to participate in the Veterans Retraining Assistance Program will be able to apply online at http://benefits.va.gov/vow/.

Re-Employment Grants

The U.S. Department of Labor awarded nearly $65.5 million in grants to 40 states, Puerto Rico and the District of Columbia to implement and/or continue re-employment and eligibility assessments for Unemployment Insurance beneficiaries.

"Today's grant announcement will allow states to provide personalized assessments for recipients of Unemployment Insurance to help them get back on their feet faster," said Labor Secretary Hilda L. Solis.

The funds will be used to conduct in-person assessments in One-Stop Career Centers. The assessments include the development of a re-employment plan for claimants, the provision of labor market information that is appropriate to the claimants' locations and employment prospects, a complete review of claimants' eligibility for Unemployment Insurance benefits, and a referral to re-employment services and/or training provided by the One-Stop Career Centers separate that is from the UI program. 

This is the eighth year that the Labor Department has awarded grants through its Re-employment and Eligibility Assessment initiative. Recent evaluations of REA programs have shown that REAs reduce the number of weeks UI benefits are claimed by expediting the re-employment of the UI claimants. This evidence justifies expanding the use of REAs as provided for in the federal Emergency Unemployment Compensation program, which is authorized by the Middle Class Tax Relief and Job Creation Act of 2012.

"These grants allow us to bring UI beneficiaries into the One-Stop Career Center where they are introduced to all of the re-employment services that are available. REA participants get the best available help needed to find good jobs," said Jane Oates, assistant secretary of labor for employment and training.

Fewer filed tor Unemployment Insurance

Fewer Americans filed for unemployment benefits last week, a welcome sign after claims had previously risen four weeks in a row.  About 365,000 people filed for their first week of jobless benefits, a significant drop from 392,000 claims filed the week before, the Labor Department said.

Jobless claims are considered a key measure of the job market, strongly correlated with the number of layoffs in the economy. While last week's drop was seen as an encouraging sign, it's also too soon to tell whether claims are returning to a downward trend.

Initial claims can be volatile, especially in the spring when Easter and schools on spring break often throw off the seasonal adjustments.  That's because many states allow school contract workers -- like bus drivers and cafeteria workers -- to apply for unemployment benefits if school is out of session temporarily. Easter falls on a different week each year, as do school breaks, making it hard for economists to adjust for this phenomenon.  Economists prefer to look at a four-week moving average, which increased to 383,500 last week, up marginally from the previous week's average.

Meanwhile, 3,276,000 people filed for their second week of unemployment benefits or more in the week ended April 21, the most recent data available. That marks a 53,000 decrease from the prior week.

NASWA Testifies on New UI Law

On Wednesday, April 25th, the Human Resources Subcommittee of the House Committee on Ways and Means held a hearing to review the implementation of the reforms to the unemployment insurance system contained in the Middle Class Tax Relief and Job Creation Act of 2012 (P.L. 112-96).  Darrel Gates, Deputy Commissioner, New Hampshire Department of Employment Security, represented NASWA and discussed the progress of implementing the new law and made a number of recommendations described below.

• If the program (EUC08) is continued beyond the end of the year -- with the goal of an eventual phase out -- NASWA recommends it should be accomplished by either adjusting the unemployment rate triggers for the tiers, the number of weeks in each tier, or eliminate tiers in reverse order with the last tier being the first to be eliminated.
• States applaud Congress for funding Reemployment Activities -- known as RES and REA’s. States are moving aggressively to meet with roughly 9 million workers by the end of the year to comply with the "in-person" requirement. But the process could be easier if USDOL recognized basic technology, such as the telephone and video conferencing that allow for "virtual" in-person meetings.
• NASWA recommends early intervention of reemployment services as soon as a claimant files for UI. Providing these services in week one -- rather than week 27 -- yields the greatest return for the unemployed, employers and taxpayers.
• NASWA recommends a permanent REA and RES program through a capped entitlement grant, at $500 million per year.
• On the Demonstration Projects, NASWA recommends that reemployment bonuses should be added as a permissible activity. The bonus could be graduated to pay larger bonuses for early returns to work and progressively smaller bonuses for later returns to work.
• On the work search criteria, states should have the flexibility to collect the work search data that best meets the need of their states. For example, USDOL has told New Hampshire that paper logs must be submitted during the in-person session, but New Hampshire already collects this information electronically.
• On the non-reduction rule, NASWA recommends it should be eliminated completely, not just modified. States should have the flexibility to determine the most appropriate unemployment benefit structure and methods for addressing unemployment trust fund solvency.
• To address the aging computer infrastructure, NASWA is hopeful Congress will consider its administrative funding proposal that would maintain the current funding structure for UI administration and give states an additional discretionary appropriation of $100 million each year for IT investments to promote efficiency and better services to employers and workers. And, in years in which 50 percent of FUTA revenue exceeds the amount that would be allocated under the current system -- generally in better economic times -- provide states with an additional amount equal to the difference for UI administrative investments, distributed via an equitable formula.