LegiStorm

Summary:

The Unemployment Insurance (UI) system is a joint federal-state partnership that consists of two types of benefits: (1) permanently authorized programs including the Unemployment Compensation (UC) and the Extended Benefit (EB) programs and (2) temporary federal UI benefits created by congressional action to supplement the UC and EB programs during recessions. The U.S. Department of Labor (DOL) provides oversight of state UC and EB programs and the state administration of federal UI benefits. Although there are broad requirements under federal law regarding UC benefits and financing, the program specifics are set under each state’s laws, resulting in 53 different UC programs operated in the 50 states, the District of Columbia, Puerto Rico, and the U.S. Virgin Islands. States operate their own UC and EB programs and administer any temporary federal UI benefits. State UC programs determine the weekly benefit amount and the number of weeks of UC available to unemployed workers. Most states provide up to 26 weeks of UC to eligible individuals. EB payment amounts and durations are based upon each state’s UC program rules, with additional federal requirements specified in federal law. The UI system’s two primary objectives are to provide temporary and partial wage replacement to involuntarily unemployed workers and to stabilize the economy during recessions (i.e., by providing income support to unemployed workers who then spend this income, maintaining a certain level of economic activity). The UC program, created under the Social Security Act of 1935, provides unemployment benefits to eligible individuals who become involuntarily unemployed for economic reasons and meet state-established eligibility rules. To augment the UC program, federal law includes an automatic expansion of the regular UC benefit with the EB program, which was established by the Federal-State Extended Unemployment Compensation Act of 1970 (EUCA; P.L. 91-373). EB may provide up to an additional 13 or 20 weeks of benefits once regular UC benefits are exhausted, depending on worker eligibility, state law, additional federal eligibility requirements, and state economic conditions. The Consolidated Appropriations Act, 2023 (P.L. 117-328) provided $3.1 billion in federal funds for the administration and activities of the UC program for FY2023. The 118th Congress has provided oversight of COVID-19 pandemic UI programs, with a focus on improper payments— especially fraudulent overpayments and policy proposals to prevent and recover UI overpayments. (All temporary UI measures enacted in response to the pandemic expired at the beginning of September 2021. For details on these temporary measures, see CRS Report R46687, Unemployment Insurance (UI) Benefits: Permanent-Law Programs and the COVID-19 Pandemic Response.) At the beginning of the 118 th Congress, policymakers held several hearings to examine UI overpayments and fraud issues. On February 1, 2023, the House Oversight and Accountability Committee held a hearing on Federal Pandemic Spending: A Prescription for Waste, Fraud and Abuse, where much of the content concerned fraudulent COVID-19 UI benefit payments. On February 8, 2023, the House Committee on Ways and Means held the Hearing on The Greatest Theft of Taxpayer Dollars: Unchecked Unemployment Fraud. In addition, multiple UI program integrity bills have been introduced in the 118th Congress (H.R. 1163, H.R. 5107, H.R. 5967, S. 1018, S. 1587, S. 4089, and S. 4663). On May 11, 2023, the House passed the Protecting Taxpayers and Victims of Unemployment Fraud Act (H.R. 1163). The Fiscal Responsibility Act of 2023 (FRA; P.L. 118-5; June 3, 2023) included three UI-related provisions that (1) rescinded specified amounts of unobligated UI administrative funding made available by the American Rescue Plan Act of 2021 (ARPA; P.L. 117-2; March 11, 2021), (2) effectively reduced budgetary adjustments to discretionary spending limits for Reemployment Services and Eligibility Assessments, and (3) rescinded all unobligated funds for Short-Time Compensation grants created under the Coronavirus Aid, Relief, and Economic Security Act (CARES Act, P.L. 116-136, March 27, 2020). Additional legislation has been introduced in the 118th Congress related to funding UI administration (H.R. 1930, H.R. 1931, and H.R. 2811), changing the consequences of federal UC loans to states (H.R. 3745 and H.R. 8559), modernizing UI programs and benefits (H.R. 6071 and S. 3140), allowing striking workers access to UC (H.R. 6063, H.R. 6071, and S. 3140), extending Reemployment Services and Eligibility Assessments (RESEA) to all UC claimants (S. 3745 and H.R. 5861), permanently exempting railroad unemployment and sickness benefits from sequestration (H.R. 2785, S. 1274, S.Amdt. 1933, and S.Amdt. 2282), prohibiting Social Security Disability Insurance (SSDI) benefits based upon UC entitlement (H.R. 6427 and S. 3316), restricting payment of UI benefits for those with high adjusted gross income levels (H.R. 6779 and S. 3523), and making changes to the Self-Employment Assistance program (H.R. 8605).