|
 Printer-Friendly Version
OPA News Release: [10/09/2003]
Contact Name: Ed
Frank
Phone Number: (202) 693-4676
U.S. Department of Labor Finalizes Rule to Protect
Integrity of Unemployment Trust Funds
WASHINGTON—The U.S. Department of Labor today announced it
is issuing a final rule to protect the integrity of unemployment trust funds
and repeal the Birth and Adoption Unemployment Compensation Rule of 2000
(BAA-UC).
DOL officially proposed the repeal last December and collected public
comments for 60 days. The Birth and Adoption Unemployment Compensation Rule of
2000 was an experiment by the previous Administration to let states use
unemployment funds for purposes other than helping laid-off workers. However,
many people worry that the security of unemployed workers and their families
could be jeopardized if unemployment trust funds, most of which are stretched
very thin, are used to provide benefits to people who are on leave from their
jobs.
“This Administration is committed to ensuring that laid-off workers
and their families have a guarantee that this important safety net is there for
them when they need it,” said Assistant Secretary of Labor for Employment
and Training Emily Stover DeRocco.
The need to protect the integrity of unemployment trust funds is evident
in that fact that many states are reporting low reserve levels in their
funds:
- At the close of last year, 32 states had fewer than 12 months of
recession-level benefits in reserve (up from 28 states a year earlier)
- 27 states (up from 13 last year) raised taxes last January to cover
UI benefit costs, at a time when businesses needed more capital, not less;
- Currently, six states (up from none a year ago) have had to borrow to
cover shortfalls in their unemployment trust funds, and more are likely to
borrow in coming months.
The unemployment insurance system was created to provide temporary
financial assistance to laid-off American workers, but the BAA-UC rule exposed
unemployment trust funds to claims they were never intended to cover. By
repealing this rule, the Department of Labor is taking action to reverse this
threat to the trust funds’ solvency.
Other actions taken by the Labor Department to assure trust fund
integrity include convening a task force on UI fraud and abuse and working with
states to minimize overpayments.
# # #
_________________________________________________________________
| 
