Unemployment Insurance for Workers on Family and Medical Leave

Overview

At his weekly radio address on Saturday, June 10, 2000, President Clinton announced the release of the final Labor Department regulations authorizing the states to provide unemployment benefits to workers taking leave to care for a newborn or newly-adopted child. 

To provide more background on this new initiative, we have updated our publication, "Expanding Unemployment Insurance for Workers on Paid Family & Medical Leave: Question & Answer." It describes the basics of the UI initiative, the proposals that have developed in individual states, the key provisions of the regulations, and other selected issues.  Also available is our press release describing the positive impact of the new regulations on several of the most active state campaigns.  This initiative will go a  long way to make both paid family leave and unemployment benefits available to women and low-wage workers who have been working hard without the benefit of these critically important workplace protections.

Please spread this material around to your networks and contacts in the states in order to promote this exciting new initiative and help make it a reality. And be sure to add this information to your email lists, internet postings and other appropriate information outlets. For more information on the regulations and the state campaigns, contact Maurice Emsellem at NELP. 

Maurice Emsellem

National Employment Law Project

55 John Street, 7th Floor

New York, NY 10038

(212) 285-3025 x 302

(212) 285-3044 (fax)

emsellem@nelp.org

Sample Op-Ed

Unemployment Insurance, Family Leave & the Changing Workforce

This week, the Clinton Administration issued final regulations that will help pave the way for the states, if they so choose, to provide unemployment insurance (UI) benefits to workers taking leave to care for a newborn or adopted child.  This new family leave initiative fuels a growing debate about the unemployment system and long-overdue reforms to meet the changing needs of todays working families.

The unemployment insurance system was created back in 1935 at a time when the economy was still hurting from the Depression.  Like most government programs of its day, UI was structured around a father working a full-time factory job and a mother caring for the family full-time at home.  A lot has changed since 1935 -- with more women in the labor market, more single-parent working families, and huge growth in low-wage, part-time and temporary employment yet the UI system has not kept pace with this new workforce. 

So, while it used to be that as many as half of the nations unemployed workers received UI, the national average has now dropped to just one-third.  Those people working in the highest turnover jobs who rely most on their unemployment check -- low-wage workers and single-parent working moms -- consistently have an even harder time collecting as a result of outdated eligibility rules.   For example, while many more workers are forced to piece together part-time jobs in the new economy, they still dont qualify for UI benefits in most states because they are required to look for full-time work.  In other states, low-wage workers fail to qualify because the eligibility rules are based on how much the worker earned, not their hours of work.  Meanwhile, the employer still pays the unemployment tax on these workers who fail to collect benefits.

Thanks to a movement that has taken hold in the states, much of this is changing.  States as politically diverse as Wisconsin, New Hampshire, North Carolina and New Jersey have enacted broad UI reforms.  These reforms have started to reverse the decline in the proportion of low-wage and women workers collecting unemployment benefits. The family leave initiative, made possible by the new regulations, is part and parcel of this state movement to create a more equitable UI system.

Clinging to the mindset of the 1930s, business critics of the new family initiative claim that unemployment benefits should be available only to workers who are forever laid off by their employers.  In reality, the UI system allows states the flexibility to provide interim benefits to workers who temporarily reduce their work hours and to workers who are forced to leave their jobs because of compelling child care and other family needs.  Businesses have taken advantage of this flexibility.  In fact, some states allow employers to file UI claims while their operations are temporarily shut down, usually during holiday seasons, in effect subsidizing the companies for the workers vacation pay.

Reforms are now being actively debated because, with the unemployment rate so low, state UI funds have more than doubled since the 1992 recession. As a result, most states trust funds are well equipped to pay UI benefits during even the most serious recession.  Meanwhile, business groups have seized on this favorable funding situation to dramatically cut unemployment taxes in at least 25 states.  These tax breaks, totaling an estimated $34 billion dollars, far exceed the costs of even the most ambitious state UI reform agendas.

The states are thus faced with a clear choice in the new millennium. Should they update their UI programs to serve the needs of the changing workforce or undermine the integrity of the program by providing employer tax relief during a period of corporate prosperity?  Now is the time to choose the path for UI reform, like the family leave initiative, and build a more equitable UI system.