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January, 2001, Vol. 124, No. 1

Changes in unemployment insurance legislation in 2000

Robert Kenyon, Jr. and Loryn Lancaster

During 2000, there were two Federal legislative enactments that affected the Federal-State unemployment insurance program. The "Consolidated Appropriations Act, 2001" (P.L. 106–554) amends Federal law to treat Indian tribes similar to State and local governments. Briefly, services performed in the employ of tribes generally will no longer be subject to the Federal Unemployment Tax Act tax and, with some specified exceptions, will be required to be covered under State unemployment insurance laws. Further, tribes must be offered the reimbursement option and if a tribe fails to make required payments to the State’s unemployment insurance fund or payments of interest or penalty, then the tribe will become liable for the Federal unemployment tax and the State may remove tribal services from State coverage. States also will lose the Federal share of extended benefits with respect to services performed for tribes. States with Indian tribes will be required to amend their laws to implement these requirements which were effective December 21, 2000.

The "Victims of Trafficking and Violence Protection Act of 2000" (P.L. 106–386) requires the Secretary of Labor, in consultation with the Attorney General, to conduct a national study to identify State unemployment insurance laws that address the separation from employment due to circumstances resulting from domestic violence and the receipt (or nonreceipt) of unemployment compensation, and to report to the Congress the results of the study along with recommendations in October 2001.

The U.S. Department of Labor issued the Birth and Adoption-Unemployment Compensation (BAA-UC) final rule, which was effective August 14, 2000. This ruling allows States (that choose to do so or on an experimental basis) to provide unemployment insurance as a partial wage replacement to employees who desire to take approved leave or otherwise leave their employment following the birth or placement for adoption of a child. States will have the latitude to define eligibility requirements for work history and benefit levels. While 15 State legislatures addressed the Birth and Adoption-Unemployment Compensation ruling in some manner during 2000, none had enacted the experimental effort by the year’s end. However, several States have indicated that they may take up this issue in 2001.

This excerpt is from an article published in the January 2001 issue of the Monthly Labor Review. The full text of the article is available in Adobe Acrobat's Portable Document Format (PDF). See How to view a PDF file for more information.

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