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.