Staff data and materials on unemployment compensation amendments of 1976 (H.R. 10210)

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Staff data and materials on unemployment compensation amendments of 1976 (H.R. 10210)
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Table of Contents
    Front Cover
        Page i
        Page ii
    Table of Contents
        Page iii
        Page iv
    A. Unemployment compensation under present law
        Page 1
        Page 2
        Page 3
        Page 4
        Page 5
        Page 6
        Page 7
        Page 8
        Page 9
        Page 10
        Page 11
        Page 12
        Page 13
        Page 14
        Page 15
        Page 16
        Page 17
        Page 18
        Page 19
        Page 20
        Page 21
        Page 22
    B. Unemployment compensation amendments of 1976 (H.R. 102100
        Page 23
        Page 24
        Page 25
        Page 26
        Page 27
        Page 28
        Page 29
        Page 30
        Page 31
        Page 32
        Page 33
        Page 34
        Page 35
        Page 36
        Page 37
        Page 38
        Page 39
        Page 40
        Page 41
        Page 42
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        Page 44
        Page 45
        Page 46
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        Page 56
        Page 57
        Page 58
        Page 59
        Page 60
        Page 61
        Page 62
    C. Additional materials related to unemployment compensation programs
        Page 63
        Page 64
        Page 65
        Page 66
        Page 67
        Page 68
        Page 69
        Page 70
        Page 71
        Page 72
        Page 73
        Page 74
        Page 75
        Page 76
        Page 77
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        Page 79
        Page 80
        Page 81
        Page 82
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        Page 84
        Page 85
        Page 86
        Page 87
        Page 88
        Page 89
        Page 90
        Page 91
        Page 92
    D. Appendices
        Page 93
        Page 94
    Appendix A. Constitutionality of state and local coverage: Labor department opinion
        Page 95
        Page 96
        Page 97
        Page 98
        Page 99
        Page 100
        Page 101
        Page 102
        Page 103
        Page 104
        Page 105
        Page 106
        Page 107
        Page 108
        Page 109
        Page 110
    Appendix B. Constitutionality of state and local coverage: CRS memorandum
        Page 111
        Page 112
        Page 113
        Page 114
        Page 115
        Page 116
        Page 117
        Page 118
        Page 119
        Page 120
    Appendix C. Supreme Court decision on pregnancy disqualification provisions
        Page 121
        Page 122
    Back Cover
        Page 123
        Page 124
Full Text
\j4,9: mRu-AJ+


94th Congress I
2d Session f


COMMITTEE PRINT


STAFF DATA AND MA7EkFIALS ON


UNEMPLOYMXT.

COMPENSAI GN

AMENDMENTS OF 1976

(H.R. 10210)




COMMITTEE ON FINANCE
UNITED STATES SENATE
RUSSELL B. LONG, Chairman


SEPTEMBER 3, 1976

U.S. GOVERNMENT PRINTING OFFICE
WASHINGTON : 1976


75-762


i + -'D


































COMMITTEE ON FINANCE
RUSSELL B. LONG, Louisiana, Chlikma


HERMAN E. TALMADGE, Georgia
VANCE HARTKE, Indiana
ABRAHAM RIBICOFF, Connecticut
HARRY F. BYRD, JL, Virginia
GAYLORD NELSON, Wisconsin
WALTER F. MONDALE, Minnesota
MIKE GRAVEL, Alaska
LLOYD BENTSEN, Texas
WILLIAM D. HATHAWAY, Maine
FLOYD K. HASKELL, Colorado


CARL T. CURTIS, Nebraska
PAUL J. FANNIN, Arizona
CLIFFORD P. HANSEN, Wy
ROBERT DOLE, Kansas
BOB PACKWOOD, Oregon
WILLIAM V. ROTH, JR., Del
BILL BROCK, Tenn


MICHAEL STERN, Staft Dirctor
DONALD V. MOOREHEAD, Chief Minority CouneI

(II)













CONTENTS



Page
A. Unemployment Compensation Under Present Law ------------------- 1
I. Description of the Present Unemployment Insurance Pro-
gram ------------------------------------------------- 4
II. Federal-State Extended Unemployment Compensation Act
of 1970 ----------------------------------------------- 18
III. Emergency Unemployment Compensation Act of 1974 ------- 18
IV. Special Unemployment Assistance ---------------------- 21
B. Unemployment Compensation Amendments of 1976 (H.R. 10210) -------23
H.R. 10210 as Passed by the House of Representatives ------------5
I. Summary of Major Provisions ---------------------------- 25
II. Coverage Provisions of H.R. 10210 ---------------------28
III. Financing Provisions of H.R. 10210 ----------------------- 43
IV. Extended Benefit Triggers ------------------------------- 49
V. Provisions Related to Benefit Eligibility ------------------- 55
VI. National Commission on Unemployment Compensation----- 57
VII. Overall Impact of H.R. 10210 on Costs, Revenues, and
Coverage ------------------------------------------ 58
C. Additional Materials Related to Unemployment Compensation
Programs -----------------------------------------------------63
D. Appendixes -----------------------------------------------------93
A. Constitutionality of State and local coverage: Labor Department
opinion ---------------------------------------------------95
B. Constitutionality of State and local coverage: CRS memorandum- 111
C. Supreme Court decision on pregnancy disqualification provisions-- 121
(m)































A. Unemployment Compensation Under Present Lav7



















Digitized by the Internet Archive
in 2013













http://archive.org/detaiIs/staffdataOOur







BENEFITS UNDER EXISTING UNEMPLOYMENT COMPENSATION PROGRAMS


Program Benefit duration Funding 2 When in effect

Regular State programs ...... 1st to 26th week of un- 100 percent from State At all times.
employment, unemployment ac-
counts.
Federal-State extended ben- 27th to 39th week of un- 50 percent from State, High level of insured un-
ef its. employment. 50 percent from Fed- employment-nationally
eral unemployment ac- or in specific State.
counts.
Emergency unemployment (a) 40th to 52d week of (a) 100 percent from (a) Temporary program:
benefits. unemployment. Federal unemploy- expires Mar 31,
ment accounts. 1977; effective only
when extended pro-
Sram in effect and
tate insured unem-
ployment rate is at
least 5 percent.
(b) 53d to 65th week of (b) 100 percent from (b) Same as (a) but effec-
unemployment. Federal unemploy- tive only if State in-
ment accounts. sured unemploy-
ment rate exceeds is
at least 6 percent.


I Based on maximum duration of benefits (26 weeks in most
States for regular program). Persons with less substantial work
history may qualify for shorter durations.


2 Repayable loans from general revenues are available to cover
shortages in these accounts.







I. Description of the Present Unemployment Insurance
Unemployment insurance is a Federal-State system d *
provide temporary wace loss compensation to workers as p
against the economic hazards of unemployment. Funds accumu
from payroll taxes permit payment of benefits to unemployed i
workers.
THE STATUTE
The unemployment insurance system in this country is the pri
of Federal and State legislation. About 87 percent of wage and si
workers are covered by the Federal-State system established
Social Security Act. The Federal taxing provisions are in the
eral Unemployment Tax Act, chapter 23 of the Internal Rei
Code (FUTA). Railroad workers are covered by a separate Fe
program. Veterans with recent service in the Armed Force
civilian Federal employees are covered by a Federal program, t
ter 85, title 5, United States Code, with the States paying benef
agents of the Federal Government.
The Federal provisions in the Social Security Act and the Fe
Unemployment Tax Act establish the framework of the system,
State law meets minimum Federal requirements, (1) employee
ceive a 2.7-percent credit against the 3.2-percent Federal payroll
and (2) the State is entitled to Federal grants to cover all theY
sary costs of administering the program.
Section 3304 of the Internal Revenue Code of 1954 provides
the Secretary of Labor shall approve a State law if under the
law:
(1) Compensation is paid through public employment offii
other approved agencies;
(2) All of the funds collected under the State program ai
posited in the Federal Unemployment Trust Fund (title I
the Social Security Act prescribes the distribution of th
among the various accounts of the trust fund) ;
(3) All of the money withdrawn from the unemployment
is used to pay unemployment compensation or to refund am
erroneously paid into the Fund;
(4) Compensation is not denied to anyone who refuses I
cept work because the job is vacant as the direct result of a
dispute, or because the wages, hours or conditions of work ar(
standard, or if as a condition of employment, the individuals
have to join a company union or resign from or refrain from
ing a labor union;
(5) Compensation is paid to employees of FUTA tax-es
nonprofit organizations who employ 4 or more workers in
of 20 weeks of the calendar year and of State hospitals ar
stitutions of higher education (with specific limitations on b
entitlement for teachers, researchers, and administrators i
stitutions of higher education) ;
(6) Compensation is not payable in 2 successive benefit
to an individual who has not worked in covered employment
the beginning of the first benefit year;







(7) Compensation is not denied to anyone solely because he is
taking part in an approved training program;
(8) Compensation is not denied or reduced I)ecause an in-
dividl s claim for benefits was filed in another State or Caamda :
(9) The only reasons for cancellation of wage credits or total
benefit i-')hts are discharge for work-connected inisclonduet, frau 1d
or receipt of disqualifying income;
(10) Extended compensation is payable under the provisions
of the Extended Unemployment Compensation Act of 1970;
(11) The State participates in arrangements for combining
wages earned in more than one State for eligibility and benefit
pulrposes;
(12) Each political subdivision of the State may elect to cover
employees (not otherwise covered under State law) of hospitals
and institutions of higher education operated by the subdivision;
(13) Reduced rates are permitted employers only on the basis
of their experience with respect to unemployment; and
(14) Nonprofit organizations are permitted to finance benefit
costs by the reimbursement method.
An employer is subject to the Federal unemployment tax if, during
the current or preceding calendar year, he employed one or more
individuals in each of at least 20 calendar weeks or if he paid wages
of $1,p500 or more during any calendar quarter of either such year.
Taxable wages are defined as all remuneration from employment
in cash or kind with certain exceptions. The exceptions include
earnings in excess of $4,200 in a year, payments related to retirement,
disability, hospital insurance, et cetera.
Employment is defined as service performed within the United
States, on or in connection with an American vessel or aircraft, and
service performed outside the United States for an American em-
ployer. This service, however, is subject to a long list of exceptions
which generally coincide with the provision of law relating to the
definition of employment for purposes of the old-age, survivors and
disability insurance program (title II of the Social Security Act and
chapter 21 of the Internal Revenue Code of 1954). Major exceptions
are agricultural and domestic employment and most employment for
State and local governments.
Title III of the Social Security Act provides for payments from
the. Federal unemployment fund to the States to meet the necessary
cost of administering the unemployment, compensation programs in
the States and the costs of operating their public emnloment offices.
Under this title, the grants are restricted to those States that have
been certified bv the Secretary of Labor as providing:
(1) Methods of administration (including a State merit sys-
tem) which will insure full payment of unemployment compen-
sation when due;
(9) Tnpemployrment compensation payment through public
employment offices or through other approved agencies;
(3) For fair hearings to individuals whose claims for unem-
plovmnent compensation have been denied;
(4) For the payment of all funds collected to the Federal
Unemployment Trust Fund;






(5) That all of the money withdrawn from the fund
used either to pay unemployment compensation
of administrative expenses or to refund amounts
into the fund; except that, if the State law provide
collection of employee payments, amounts equal to
tions may be used to provide disability payments;
(6) For making the reports required by the Secret
Labor;
(7) For providing information to Federal agencies a(
terinc publi work programs or assistance through
employment:
(8) For limiting expenditures to the pu and a
found necessary by the Secretary of Labor; and
(9) For repayment of any funds the Secretary of
mines were not spent for unemployment compensation pi
or exceeded the amounts necessary for proper administer
the State unemployment compensation law.

FINANCING THE PROGRAM
Under the provisions of the Internal Revenue Code, a tax iE
on covered employers at a current rate of 3.2 percent on w
$4,200 a year paid to an employee. The law, however, pi
credit against Federal tax liability of 2.7 percent to employee
pay State taxes under an approved State unemployment come.
program. This credit is allowed regardless of the tax paid to tb
by the employer. Because all of the States now have ,n ap
unemployment compensation program, the effective Federal
0.5 percent. This Federal tax is used to pay all of the adminis
costs, both State and Federal, associated with the unemplq
compensation programs, to provide 50 percent of the benefl
under the Federal-State Extended Unemployment Compensati
of 1970, to pay the costs of benefits under the Emergency Unci
ment Compensation Act of 1974, and to maintain a loan fun
which an individual State may borrow (title XII of the Socia
rity Act) whenever it lacks funds to pay the unemployment c
station benefits due for a month. In order to assure that a Sta
repay any loans it secures from the fund, the law provides tha
a State has an outstanding loan balance on January 1 for 2 consi
years, the full amount of the loan must be repaid by Novenr
of the second year or the Federal tax on employers in that Sts
be increased for that year and further increased for each subs
year that the loan has not been repaid. Under a provision of
Law 94-45 a 3-year (1975, 1976, and 1977) suspension of the in
in tax rates is permitted for a State which the Secretary finds ha
appropriate steps (a) to restore the fiscal soundness of its progri
(b) to provide for repayment of outstanding loans within a ream
period of time.
All States levy taxes on employers within the State. Three
(Alabama, Alaska, and New Jersey) also collect contributions
employees. These taxes are deposited by the State to its account
unemployment trust fund in the Federal Treasury, and withdrf
needed to pay benefits. On December 31, 1975, the total reserve






37 States which had not exhausted their reserves was $4.4 billion. The
other 15 States were supplementing their State unemployment tax col-
lections with loans from the Federal account in order to meet benefit
payments. As of August 15, 1976, the number of States exhausting
their reserves had increased to 21, which at that time had borrowed
$3.1 billion.
Standard rates
The standard rate of contribution under all but eight State laws is
2.7 percent. In New Jersey, the standard rate is 2.8 percent: Hawaii,
Ohio, and Nevada, 3; and Montana, 3.1. In Nevada the 3 percent
rate applies only to unrated employers. In Idaho the standard rate is
2.1 percent if the ratio of the unemployment fund to the total payroll
for the fiscal year is 4.75 percent or more; when the ratio falls below
this point, the standard rate varies between 2.3 and 3.3 percent. Kan-
sas has no standard contribution rate, although employers not eligible
for an experience rate, and not considered as newly covered, pay at
the maximum rate.
Federal requirements for experience rating
The Federal law initially allowed employers additional credit for a
lowered rate of contribution if the rates were based on not less than 3
years of "experience with respect to unemployment or other factors
bearing a direct relation to unemployment risk." In 1954 the 3-year re-
quirement was relaxed and States were permitted to assign a reduced
rate, based on their "experience," to new and newly covered employ-
ers who had at least 1 year of experience immediately preceding the
computation date. Since 1970, States may also grant reduced rates (but
not less than 1 percent) for newly covered employers.
State requirements for experience rating
All State laws, except Puerto Rico, provide for a system of experi-
ence rating by which individual employers' contribution rates are var-
ied from the standard rate on the basis of their experience with the
amount of unemployment encountered by their employees.
In most States 3 years of experience with unemployment means
more than 3 years of coverage and contribution experience. Factors
affecting the time required to become a "qualified" employer include
(1) the coverage provisions of the State law ("at any tinle" vs. 20
weeks); (2) in States using benefits or benefit derivatives in the ex-
perience-rating formula, the type of base period and benefit year and
the lag between these two periods, which determine how soon a new
employer may be charged for benefits; (3) the type of formula used
for rate determinations; (4) the. length of the period between the date
as of which rate computations are made and the effective date for rates.
Taxable wage base
Twenty-two States have adopted a higher tax base than the $4,200
now provided in the Federal Unemployment Tax Act. In all States an
employer pays a tax on wages paid to each worker within a, calendar
year up to the amount specified in State law. In addition, most of the
States provide an automatic adjustment of the wage base if the Fed-
eral law is amended to apply to a higher wage base than specified
under State law.






As a result of the many iariables in State taxable wage
rates, benefit formulas and economic conditions, actual tax
reatly among the States and between individual empl
State. In 1976 the estimated average tax rate for all the S
2.5 percent of taxable wages, ranging from a high of 4.7 p
Massachusetts to a low of 0.6 percent m Texas, both on a taxE
base of ,4.200. Tax rates as a percentage of total wages range
high of 3 percent in Puerto Rico to 0.3 percent in Texas. The
average tax rate, as a percentage of total wages was 1.2 per

COVERAGE
The Federal Unemployment Tax Act applies to emrpko
employ one or more employees in covered employment in a
weeks in the current or preceding calendar year or who pay
$1,500 or more during any calendar quarter of the current a
ing calendar year. State legislatures tend to cover employe
ployment subject to the Federal tax because while the
compulsion to do so, failure to do so is of no advantage to the
a disadvantaged to the employers involved. While States
cover all employment which is subject to the Federal tax,
cover some employment which is exempt from the tax.
Although the extent of State coverage is greatly influence
Federal statute, each State is, with a single exception, free
mine the employers who are liable for contributions and th
who accrue rights under the laws. The sole exception is thi
requirement that States provide coverage for employees
profit organizations and of State hospitals and institutions
learning even though such employment is exempt from FU
orage is generally defined in terms of (a) the size of the e
unit's payroll or the number of days or weeks worked during
dar year, (b) the employment relationship between the woI
the employer, and (c) the place where the worker is employe
age under the laws is limited by exclusion of certain types o-
ment. In most States, however, coverage can be extended to
workers under provisions which permit voluntary election of
by employers.
Thirty-one States have adopted the Federal definition of e
that is. a quarterly payroll of $1,500 in the calendar year or I
calendar year or one worker in 20 weeks. Eight States pr,
broadest posible coverage by including all employers who
covered service in their employ. The other States have require
less than 20 weeks or payrolls other than $1,500 in a calenda:

EXCLUSIONS FROM COVERAGE
The following tves of emnlovmenit ,re ,renwrally exemnt
orage undo FUTA. qlthouh certain States have provided
for somo of the excluded services.
(1) Aa)eiiwrc labor.-State laws generally exclude a
labor from coverage, except in five States.
(2) Doinesticseric.-Four States cover personal or dom(
ice in private homes, college clubs, or fraternities. The r






States exclude domestic service in private homes and most of thwm
exclude college clubs, fraternities, and sororities.
(3) Service for relatives.-All States exclude service for an em-
ployer by his spouse or minor child and, except in New York, service
of an individual in the employ of his son or daughter.
(4) Exempt nonprofit organization, State hospitals, an d +vst~ht-
tons of higher education-Although the 1970 aimidiiients I)ro)xided
coverage of certain services performed for nonprofit organizations
and for State hospitals and institutions of higher educattion, tie
amendments permit the States to exclude certain services f t-om State
coverage. Services performed for a church, convention, or a..soeiation
of churches, or an organization operated primarily for religious l)ir-
poses may be exempt. Also the State may exempt services li'rformed
by a duly ordained, commissioned, or licensed minister or a member of
a religious order; in the employ of a school which is not an institution
of higher education; by the beneficiaries of the program in a facility
conducting a program of rehabilitation for persons whose earning
capacity is impaired or in a Government sponsored work-relief or
work-training program; or by inmates of correctional institutions em-
ployed in a hospital connected with the institution.
(5) Service of students and spouses of students.-Prior to the 1970
amendments, service in the employ of a school, college or university by
a student enrolled and regularly attending classes at such school was
excluded from the FUTA definition of employment. The 1970 amend-
ments retained this exclusion and also excluded service performed
after December 31, 1969, by a student's spouse for the school, college
or university at which the student is enrolled and regularly attending
classes, provided the spouse's employment is under a. program designed
to give financial assistance to the student, and the spouse is advisedl
that the employment is under such student-assistance program and is
not covered by any program for unemployment insurance. Also ex-
cluded after December 31, 1969, is service performed for an employer
other than a school, college, or university by a full-time student under
the age of 22 in a work-study program provided that the service is
an integral part of an educational program.
(6) Service of patients for hospitals.-The 1970 amendments ex-
cluded from the FUTA definition of employment service performed
for a hospital after December 31, 1969, by patients of the hospital.
Such service may be excluded from coverage under the State law
whether it is performed for a hospital which is operated for profit or
for a State hospital which must be covered under the State law.
(7) Service for Federal instrmevtalties.-An amendment to the
FUTA, effective with respect to services performed after 1961, permits
States to cover Federal instrumentalities which are neither wholly nor
partially owned by the United States, nor exempt from the tax im-
posed under section 3301 of the Internal Revenue Code by virtue of
any other provision of law which specifically refers to such section of
the Code in. granting such exemptions. All States except New Jersey
have provisions in their laws that permit the coverage of service per-
formed for such wholly privately owned Federal instrumentalities.
(8) Service for State and local governments.-Although the Fed-
eral act requires that certain service for State hospitals and State in-





10


stitutions of higher education be covered under the S law
tinues to exclude from coverage other service performed for
local governments or their instrumentalities.
All States cover at least those categories of workers ir
covered under the Federal law and most States provide
coverage for other State and local government workers. A6
half of the States provide mandatory coverage for all State em
and permit election of coverage by municipal corporations
local government subdivisions. Several States, in addition to
their own government workers, also provide mandatory covei
special groups of workers employed by their instrumentalitie
litical subdivisions.
(9) Maritime workers.-The FUTA and most State lawi
excluded maritime workers, principally because it was thogj
the Constitution prevented the States from covering such'
Supreme Court decisions in Standard DredgingCorporation
phy and Interaational Elevator Company v. rph, 319 1
(1943). were interpreted to the effect that there is no such bar.
the FUTA was amended to permit any State from which thi
tions of an American vessel operating on navigable waters wit
without the United States are ordinarily regularly
managed, directed, and controlled, to require contributions t4
employment fund under its State unemployment compensat
Most States now have such coverage.
(10) Coverage of service by reason of Federal coverage
States have a provision that any service covered by the F
employment under the State law. This provision would per
mediate coverage of excluded workers if the Federal act were a
to make their employment subject to the Federal tax. Man-
have added another provision that automatically covers any
which the Federal law requires to be covered.
(11) Voluntary coverage of excluded employments.-Tn al
except Alabama, Massachusetts, and New York, employers, i
approval of the State agency, may elect to cover most typeE
ployment which are exempt under their laws. The Massachus4
however, does permit services for nonprofit organizations to be
on an elective basis and the New York law permits employers
coverage of agricultural workers under certain conditions.
(12) Self-employment.--Employment, for purposes of uni
ment insurance coverage, is employment of workers who w
others for wages; it does not include self-employment. One ei
has been incorporated in the California law. An employer of
workers in a nonseasonal industry may apply for coverage of
services: if his election is approved, his wages for purposes
tributions and benefits are deemed to be $2,748 a quarter, and
tribution rate is fixed at 1.25 percent of wages.

BENEFIT RIGHTS
There are no Federal standards for benefits, qualifying 1
ments, benefit amounts, or duration of regular benefits. Hence
no common pattern of benefit provisions comparable to that ii





11


age and financing. The States have developed diverse and complex for-
mulas for determining workers' benefit rights.
Under all State unemployment insurance laws, a worker's benefit
rights depend on his experience in covered employment in a past
period of time, called the base period. The period during which the
weekly rate and the duration of benefits determined for a given worker
apply to him is called his benefit year.
The qualifying wage or employment provisions attempt to measure
the worker's attachment to the labor force. To qualify for benefits as
an insured worker, a claimant must have earned a specified amount of
wages or must have worked a certain number of weeks or calendar
quarters in covered employment within the base period, or must have
met some combination of wage and employment requirements. He must
also be free from disqualification for causes which vary among the
States. All but a few States require a claimant to serve a waiting
period before his unemployment may be compensable.
All States determine an amount payable for a week for total unem-
ployment as defined in the State law. Usually a week of total unem-
ployment is a week in which the claimant performs no work and
receives no pay. In a few States, specified small amounts of odd-job
earnings are disregarded in determining a week of unemployment. In
most States a worker is partially unemployed in a week of less than
full-time work when he earns less than his weekly benefit amount. The
benefit payment for such a week is the difference between the weekly
benefit amount and the part-time earnings, usually with a small allow-
ance as a financial inducement to take part-time work.
The maximum amount of benefits which a claimant may receive in a
benefit year is expressed in terms of dollar amounts, usually equal to a
specified number of weeks of benefits for total unemployment. A par-
tially unemployed worker may thus draw benefits for a greater number
of weeks. In several States all eligible claimants have the same poten-
tial weeks of benefits; in the other States, potential duration of benefits
varies with the claimant's wages or employment in the base period, up
to a specified number of weeks of benefits for total unemployment.
Qualifying wages and employment
All States require that an individual must have earned a specified
amount of wages or must have worked for a certain period of time
within his base period, or both, to qualify for benefits. The purpose
of such qualifying requirements is to restrict benefits to covered
workers who are genuinely attached to the labor force.
(1) Muhtiple of the weekly benefit or htigh quarter 1,ages.-Some
States express their earnings requirement in terms of a specified miul-
tiple of the weekly benefit amount. Such States have a weekly benefit
formula based on high-quarter wages. Most of the States with this
type of qualifying requirement add a specific requirement of wages in
at least two quarters which applies especially to workers with large
high-quarter earnings and maximum weekly benefits. Many of the
States with a high-quarter formula have an additional requirement of
a specified minimum amount of earnings in the high quarter. Such
provisions tend to eliminate from benefits part-time and low-paid
workers whose average weekly earnings might be less than the State's
minimum benefit.





12


.(2) Flat qualifying amiount-States with a flat minimumq.
ing amount include most States with an annual-wage a
termining the weekly benefit and some States with a high-q
benefit formula.
In all these States any worker earning the specified amount
within the base period is entitled to some benefits. Of the S
a flat qualifying amount and a high-quarter formula, about
quire wages in more than one quarter to qualify forany benefits. 0
do not require any wages in a quarter other than the high quart
qualify for benefits.
(3) Weeks of emnployment.-AMore than one-fourth of the Stat
quire that an individual must have worked a specified numberof
with at least a specified weekly wage.
(4) Requalifying requirements.-All States that have a !gb
the base period and benefit year place limitations on the use of
period wages for the purpose of qualifying for benefits in the
benefit year. The purpose of these special provisions is to prevent'
fit entitlement in 2 successive benefit years following a single s
tion from work.
Waiting period
The waiting period is 1 week of total or partial unep
which the worker must have been otherwise eligible or be
All except 10 States require a waiting period of 1 week of tota
employment before benefits are payable.
Benefit eligiblity and di. qualification
All State laws provide that, to receive benefits, a claimant mu
able to work, must be seeking work and must be available for i
Also he must be free from disqualification for such acts as volur
leaving without good cause, discharge for misconduct connected
the work, and refusal of suitable work. The purpose of these .
sions is to limit payments to workers unemployed primarily as a 1
of economic causes.
In all States, claimants who are held ineligible for benefits bei
of inability to work, unavailability for work, refusal of suitable,
or disqualification, are entitled to a notice of determination ax
appeal from the determination.
Benefit cmputation
(1) Weekly benefit anwnt.-All States except New York me
unemployment in terms of weeks. The majority of States deter
eligibility for unemployment benefits on the basis of the cak
week (Sunday through the following Saturday) ; the rest pay be:
on the basis of a flexible week, which is a period of 7 consecutive
beginning with the first day for which the claimant becomes eli
for the payment of unemployment benefits. In New York, unem
ment is measured in days and benefits are paid for each accumul
of "effective days" within a week.
(2) Formulas for computing weekly be nefts.-Under all State
a weekly benefit amount, that is, the amount payable for a wei
total unemployment, varies with the worker's past wages within
tain minimum and maximum limits. The period of past wages







and the formulas for computing benefits from these past wages vary
greatly among the States. In most of the States the formula is designed
to compensate for a fraction of the full-time weekly wage; i.e., for a
fraction of wage loss, within the limits of minimum aid maximum
benefit amounts. Several States provide additional allowailcis for cer-
tain types of dependents. Most of the States use a formula whic'l bases
benefits on wages in that quarter of the base period in which wages
were highest. This calendar quarter has been selected as the period
which most nearly reflects full-time work. A worker's weekly benefit
rate, intended to represent a certain proportion of average weekly
wages in the higher quarter, is computed directly from tles wages. In
13 States the fraction of high-quarter wages is 1/26. Between the mini-
mum and maximum benefit amounts, this fraction gives workers with
13 full weeks of employment in the high quarter 50 percent of their
full-time wages. Some States provide a variable fraction of wages
which gives a higher percentage to lower-paid workers than to those
with higher earnings levels.


75-762-76------2





14


WEEKLY STATE


UNEMPLOYMENT COMPENSATION
FOR TOTAL UNEMPLOYMENT


Weekly benefit amount I


Average
(calen-
dar year
1975)


Required total ear
wings in base year
For R
mini- ma)
mum mu
benefit bene-


Alabama ...... $15
Alaska ......... 23
Arizona .......... 15
Arkansas ........ 15
California ....... 30
Colorado ........ 25
Connecticut ..... 20
Delaware ........ 20
District of
Columbia ...... 14
Florida .......... 10
Georg.ia ......... 27
Hawaii .......... 5
Idaho ............ 17
Illinois .......... 15
Indiana......... 35
Iowa ............. 10
Kansas .......... 25
Kentucky........ 12
Louisiana ....... 10
Maine ........... 17


Maryland ........
Massachusetts..
Michigan ........
Minnesota....
Mississippi...
Missouri.....
Montana ........
Nebraska.......
Nevada ..........
New Hampshire.
New Jersey......
New Mexico .....
New York ........
North Carolina..
North Dakota....


13
20
18
18
10
15
12
12
16
14
20
16
20
15
15


See footnotes at end of table.


State


Mini-
mum


Maxi-
mum


$90
'120
4 85
100
104
114
'165
125
139
82
490
112
99
1135
115
116
101
87
90
119


89
152
136
113
80
85
94
80
94
95
96
78
95
105
107


$61
74
69
59
68
81
76
73
93
62
61
78
65
78
64
74
65
64
62
57
73
73
81
69
48
66
58
65
71
61
76
55
73
59
61


$522
750
562
450
750
750
600
720
450
400
972
150
520
1,000
500
600
750
344
300
900
360
1,200
350
648
360
450
455
600
528
600
600
501
600
565
600







WEEKLY


STATE UNEMPLOYMENT COMPENSATION
FOR TOTAL UNEMPLOYMENT-Continued


BENEFITS


Weekly benefit amountI


Maxi-
mum


Average
(calen-
dar year
1975)


Required total earn-
ings in base year 2


For
mini-
mum
benefit


For


Mini-
mum
work in


maxi- base
mum year
benefit (weeks)3


O hio .............
Oklahoma .......
Oregon ..........
Pennsylvania....
Rhode Island....
South Carolina..
South Dakota ....
Tennessee ......
Texas.........
Utah ............
Vermont.....
Virginia......
Washington...
West Virginia....
Wisconsin .......
Wyoming ........
Puerto Rico.....


'$16
16
28
'18
131


10
19
14
15
10
15
20
17
14
23
10
7


I $150
93
102
'133
120


103
89
85
63
110
96
103
102
128
122
95
60


$79
56
66
81
68


62
59
57
54
69
67
66
71
59
80
64
40


$400
500
700
440
920


300
590
504
500
700


600
720
1,550
700
748
800
150


$5,960
3,588
8,120
4,920
3,620
3,978
2,826
3,060
2,325
2,954
3,820
3,708
2,619
13,250
4,114
2,350
1,800


1Amounts include dependents' allowances in 11 States which provide such
allowances (in the case of minimum benefits the table assumes 1 dependent).
For a worker with no dependents, the maximum weekly benefits in these States
are: Alaska: $90; Connecticut: $110; Illinois: $106; Indiana: $69; Massachusetts:
$101; Michigan: $97; Ohio: $95; Pennsylvania: $125; and Rhode Island: $100.
2 In some States larger total earnings may be required in order for the benefits
to be paid for the maximum number of weeks. See table 3.
3 Number of weeks of work in base year required to qualify for minimum benefits.
"2Q" denotes that State directly or indirectly requires work in at least 2 quarters
of the base year.
4 Alternative requirement is 600 hours of employment.
Note: Data in table correct as of August 1976.
Duration of beneflt8
(1) Uniform duration of benefts.-Nine State laws have uniform
duration and allow potential benefits equal to the same multiple of
the weekly benefit amount (20 weeks in Puerto Rico, 30 weeks in
Pennsylvania, and 26 weeks in the other seven States) to all claim-
ants who meet the qualifying-wage requirement.


State


Mini-
mum


20
2Q
18
2Q
20
2Q
2Q
2Q
2Q
19


20
2Q
416

17
20
2Q




16

()Formuldas for iwariable duarationz.-Tie. other State 1awE
a maximum potential duration of benefits in a benefit year
a nmltiple of the weekly benefit (26 to 39 weeks of benefits
unemployment), but have another limitation on annual ben(
example, benefits payable may be limited to a specified perce
total base-period earnings or the limit may be based on the
of weeks worked in the base period.
(3) Minimum weeks of beiefit.-In four States with
duration and a high-quarter benefit formula, a minimum ni
weeks duration (10 to 15) is specified in the law. In other S
minimum potential annual benefits result from the minimum
ing wages and the duration fraction or from a schedule.
(4) Maxtim weeks of be.eflts.-Maximum weeks of ben(
from 20 to 39 weeks, most frequently 26 weeks.
In two States, duration may be extended for those claim
are taking training to increase their employment opportui
each case for up to an additional 18 weeks. In another Stat
under the State's extended benefits program may be paid to c
during periods of retraining.

DURATION (IN WEEKS) OF REGULAR UNEMPLOY
BENEFITS

E
Minimum Maximum
potential potential
State duration duration


Alabama ................ 11
Alaska ..................... 14
Arizona .................. 12
Arkansas ................ 10
California ............... 12
Colorado ................ 7
Connecticut ............. 26
Delaware ................ 17
District of Columbia..... 17
Florida .................. 10
Georgi.a ................. 9
Hawaii .... ................ 26
Idaho .................... 10
Illinois .................. 26
Indiana .................. 4
Iowa ..................... 10
Kansas .................. 10
Kentucky ................ 15
Louisiana ............... 12
M aine ................... 11
See footnotes at end of table.





17


DURATION (IN


WEEKS) OF REGULAR
BENEFITS 1-Continued


UNEMPLOYMENT


Minimum
potential
State duration


Maximum
potential
duration


Earnings in
base year
required for
mimauxm
benefits 2


M aryland .................
Massaciusetts ..........
M ichigan ................
M innesota ...............
M ississippi ..............
M issouri ...............
M ontana ................
N ebraska ................
N evada ..................
New Hampshire .........
New Jersey ..............
New Mexico .............
New York ................
North Carolina ..........
North Dakota ............
O h io .....................
Oklahom a ...............
O regon ..................
Pennsylvania ............
Rhode Island........
South Carolina ...........
South Dakota............
Tennessee ..............
Texas ...................
U tah ....................
Verm ont .................
V irginia ..................
Washington..............
W est Virginia ............
W isconsin ...............
W yom ing ................
Puerto Rico .............


26
9
11
13
12
8
13
17
11
26
15
18
26
13
18
20
10
9
30
12
10
10
12
9
10
26
12
8
26
1
11
20


26
30
26
26
26
26
26
26
26
26
26
30
26
26
26
26
26
26
30
26
26
26
26
26
36
26
26
30
26
34
26
20


$3,168
8,414
5,600
8,325
6,237
6,630
3,653
6,180
7,329
7,800
4,988
3,898
3,780
8,190
7,490
4,888
7,251
8,120
4,920
7,602
8,031
6,939
6,629
6,063
9,352
3,820
8,034
9,179
13,250
10,406

7,917
1,800


Based on benefits for total unemployment. Amounts payable can be stretched
out over a longer period in the case of partial unemployment.
2 Based on maximum weekly benefit amount paid for maximum number of weeks.
Note: Data in table correct as of August 1976.






18


II. Federal-State Extended Unemployment Comn
Act of 1970
The Employment Security Amendments of 1970 (Public Lw
373) bashed a permanent program to pay extended ben
periods of high unemployment to workers who exhaust
entitlement to regular State unemployment compensation. As a c
dition of Federal approval of the State's unemplo
program, States were required to establish the new p b J
uarv 1, 1972, and all States have done so. The Feder
and the States each pay 50 percent of the cost of benefits u
program.
These extended benefits are paid to workers only during an
tended benefit" period. Such a period can exist either on a national
State basis by the triggering of either the national or the
indicator.
National "o" indicator.-There is a national "on" indicator w.
the seasonally adjusted rate of insured unemployment for the "wl.
Nation equals or exceeds 4.5 percent in each of the 3 rec
calendar months.
State "on" indicator.-There is a State "on" indicator when
rate of insured unemployment for the State is at least 4 percent
only if it equals or exceeds, during a moving 13-week period,
cent of the average rate for the corresponding 13-week period
preceding 2 calendar years.
Temporary provision n.-The permanent law provisions govern
the State and national "on" and "off" indicators have been sus
frequently. Under the terms of the current temporary pro
States may elect (until December 31, 1976) to have the national ir
cators based on an insured unemployment rate of 4 percent rat
than 4.5 percent. Also, until March 31, 1977, each State may sled
base its indicator solely on the 4 percent insured unemployment i
factor without regard to whether the rate is 20 percent hiher
corresponding rate in the 2 prior years. As a practice
national rate is expected to remain above the permanent law
indicator rate of 4.5 percent through the end of 1977.
Extended benefit period.--An extended benefit period in a
begins after there is either a State or national "on" indicator, i
continues, until the trigger conditions are no longer met, but
minimum period is 13 weeks.
Beneflts.-During either a national or State extended benefit per
the State is required to provide each eligible claimant with
compensation at the individual's regular weekly benefit amot
Benefits under the Federal-State program are limited to not m
than 13 weeks per individual.
I. Emergency Unemployment Compensation Act of 1974
Public Law 93-572 (the Emergency Unemployment Gompensat
Act of 1974) created a new temporary emergency unemploym
compensation program. As modified by subsequent legislation, t
program provides a third tier of protection for workers in Statesw







high unemployment levels who exhaust their benefits under the reg-
ular State program and the Federal-State Extended Unemployment
Compensation Act.
Compensation under the program is payable in a State having an
agreement with the Secretary and experiencing the required unemploy-
ment levels, for weeks of unemployment beginning after 1974. Once
triggered, the period during which emergency compensation can be
paid in the State will remain in effect for at least 26 weeks, but no
benefits are payable after March 31, 1977. The cost of the emergency
benefits payments will be met by repayable advances from Federal
general revenues to the extended unemployment compensation account
in the Federal Unemployment Trust Fund.
To be eligible for compensation under the Emergency Unemploy-
ment Compensation Act, an individual must have exhausted all rights
to regular unemployment insurance benefits and to extended benefits.
In States with an insured unemployment rate of 6 percent or more
an eligible individual is entitled potentially to emergency benefits for
up to the number of weeks of his total regular benefit entitlement, but
not more than 26 weeks. In States with an insured unemployment rate
of less than 6 percent, emergency -benefit entitlement is limited to one-
half of regular program entitlement, a maximum of 13 weeks. The
program terminates (subject to the 26-week minimum duration) when
the State insured unemployment rate falls below 5 percent. The weekly
benefit amount is the same as for State regular and Federal-State
extended compensation.
If an individual is drawing benefits when the insured unemployment
rate drops below 6 percent, or below 5 percent, and the changes would
affect his entitlement, a special provision assures that he will receive
at least 13 weeks of additional benefits unless his entitlement would
have ended sooner even if the rate had not declined.
An individual who applies for benefits under the Emergency Unem-
ployment Compensation Act of 1974 is required as a condition of eli-
gibility to be either participating in or to have applied for a job-train-
ing program, if the Secretary of Labor has determined that the indi-
vidual's occupational skills need upgrading or broadening.
The emergency unemployment compensation program goes into ef-
fect in a State only when extended unemployment benefits are also pay-
able in the State. However, the extended program is currently "trig-
gered on" in all States since the mandatory national "on" indicator of
4.5 percent has been exceeded, and this situation is expected to continue
well beyond the March 31, 1977, expiration date of the emergency
benefits program.





20


STATE INSURED UNEMPLOYMENT RATES FOR
EMERGENCY BENEFITS


Below 5 percent (regular and
extended benefits only, 39 week
maximum)


Colorado
Delaware 1
District of Columbia
Florida'
Georgia 1
Idaho 1
Indiana
Iowa I
Kansas
Kentucky
Louisiana
Maryland
Minnesota
Mississippi
Missouri1
Montana
Nebraska
New Hampshire
New MexicoI
North Carolina
North Dakota
Ohio
Oklahoma
South Carolina
South Dakota
Tennessee1
Texas
Utah'
Virginia
West Virginia
Wisconsin
Wyoming


5 to 5.9 percent (emer-
gency benefits up to
52d week)


Alabama
Arizona
Arkansas
Montana
Oregon


ISome emergency benefits currently payable in State because of 26 we
mum duration of emergency benefit period and/or provisions assuring inc
additional benefits when rates decline during their entitlement.
Note: Situation as of August 30, 1976 based on insured unemployment
of August 14, 1976.





21

IV. Special Unemployment Assistance
A special, temporary, general fund program originated by the Coln-
mittee on Labor and Public Welfare providess benefits comilparntlle ini
amount to unemployment compensation benefits to indi-iduals who
are not eligible for regular unemployment benefits but who would
have been eligible if their prior employment had been covered under
the regular program. This program was enacted in 1974 and is sched-
uled to expire at the end of 1976. Many of the beneficiaries of this
special assistance program qualify under it on the basis of employment
which would be covered under the regular unemployment compen-
sation program starting in 1978 under H.R. 10210.






























B. Unemployment Compensation Amendments of 1976 (H.R. 10210)
Description of the House-Passed Bill









25


H.R. 10210 as Passed by the House of Representatives

I. Summary of Major Provisions
H.R. 10210 was passed by the House of Representatives on July 20,
1976. It would require States to extend unemployment compensation
protection to certain categories of individuals now covered only at
State option and increase the annual amount of wages subject to Fed-
eral and State unemployment taxes from $4,200 to $6,000 per employee.
The bill would also modify the requirements for triggering the Fed-
eral-State extended benefit program into and out of operation in the
States, establish a national study commission on unemployment com-
pensation, and make a number of other changes which are summarized
below and are described in detail in succeeding parts of this document.
A. COVERAGE PROVISIONS
Farm workers.-The bill would, in effect, require the States to ex-
tend the coverage of their unemployment compensation programs to
include agricultural work performed for an employer who has four or
more employees in each of 20 weeks in a year or who pays wages of
at least $10,000 in any calendar quarter. Aliens who are admitted to
the United States on a temporary basis to perform contract agricul-
tural labor under the provisions of the Immigration and Nationality
Act would not be covered until January 1, 1980. When farm labor
is supplied by a crew leader, the farm operator would be treated as
the employer unless (1) the crew leader is registered under the Farm
Labor Contractor Registration Act, or (2) the crew operates or main-
tains tractors, harvesting equipment, crop-dusting equipment, or sim-
ilar mechanized equipment.
The States would not be required to provide the new coverage until
January 1, 1978. However, if a State should provide the required new
coverage at an earlier date, the cost of any unemployment compensa-
tion benefits paid after January 1, 1978, on the basis of the earlier
coverage would be paid with Federal funds from general revenues.
The Department of Labor estimates that $220 million in additional
unemployment compensation would be paid in fiscal 1979 under this
provision.
Household workers.-The bill would, in effect, require the States to
extend the coverage of their unemployment compensation programs to
domestic workers employed by households that pay wages of at least
$600 in any calendar quarter.
The States would not be required to provide the extended coverage
until January 1, 1978. However, if a State provided the required new
coverage -at an earlier date, the cost of any unemployment compensa-
tion payments after January 1, 1978, resulting from the earlier
coverage would be paid with Federal funds from general revenues.
The Department of Labor estimates that $180 million in addi-
tional benefits would be paid in fiscal 1979 under this provision.
Employees of State and local governments.-The bill would re-
quire the States to provide unemployment compensation coverage to
all employees of State and local governments. Exceptions, however,
would be allowed for:





26


(1) Elected officials or officials appointed for as
on a2part-time basis;
(2) Members of at legislative body or the judicay
(3) Members of the State National Guard or r
Guard;
(4) Emergency employees hired in case of di ; a
(5) Inmates in custodial or penal institutions.
Each State would determine for itself how to finance b
which would be payable; an employing agency could be
make periodic payments similar to the taxes paid by pwial
ployers or it could pay the actual cost of the benefits paid to its I
employees, The Federal unemployment tax, though, woul i
levied.
The State laws would be required to contain a provision pobi
the payment of benefits to teachers and professional employ
schools during vacation periods and until 1980 would be alloi
provide a similar prohibition for nonprofessional employ(
schools. The States would not be required to provide unempko
compensation for employment prior to January 1978. How
State should provide the new benefits on the basis of earlier s
the cost of the resulting benefits (after January 1, 1978), wot
paid with Federal funds from general revenues.
The Department of Labor estimates that $210 million in a
unemployment compensation would be paid in fiscal 1979 und
provision.
Em1.ploYees of nonprofit elementary awl secondary &a
bill would require the States to extend the coverage of their unet
ment compensation programs to employees of nonprofit elem4
and secondary schools (present law requires coverage for enp
of institutions of higher education). The provisions for nonpa-
of benefits to school employees mentioned in connection wit
ployees of State and local governments would apply to employ
nonprofit schools.
The States would not be required to provide the new coverage
January 1, 1978.
Virgin Islands.-The bill would extend the Federal Inen
ment compensation laws to the Virgin Islands as soon as v
requirements of membership in the Federal-State system could b

B. FINANCING PROVISIONS
Tax base.-The bill would increase the Federal unemploymer
able wage base to $6,000. This change would require, in effect
the States tax for unemployment compensation purposes thl
$6,000 (rather than $4,200) in wages paid by an employer to a
ployee. The provision would be effective January 1, 1978.
The Department of Labor estimates that enactment of this,
sion would result in $2 billion of additional State taxes and $0.5 1
of additional Federal taxes (a total of $2.5 billion) for fiscal 197
Tax rate.-The net Federal unemployment compensation tax
be increased from 0.5 percent to 0.7 percent starting January 1,
and ending with the earlier of (1) December 31, 1982, or (2) I







of the year in which all of the advances to the extended unemployinelit
compensation account have been repaid.
The Department of Labor estimates that enactment of this provi-
sion would result in $0.8 billion of additional Federal taxes being
paid in fiscal 1979.
Federal reimburscments to the States.-The bill would make two
changes in the way Federal reimbursement of certain State costs are
determined. In determining the amount of reimbursable administra-
tive costs, no longer would account be taken of amounts attributable
to administering the program as it relates to employees of State and
local governments.
In determining grants to States for the payment of benefits under
the extended benefits program, amounts would not be included to
compensate for the payment of benefits to employees of State and
local governments. (Under the extended benefits program, benefits
are paid for the 27th through the 39th week of unemployment; one-
half of the cost of these benefits is paid from Federal unemployment
insurance funds.)
The Department of Labor estimates that enactment of these provi-
sions would reduce Federal payments to the States by $8 million for
fiscal 1979.
Advances to -States.-Under present law, whenever a State finds
that it will not have funds available to pay unemployment compensa-
tion for any 1 month it may borrow the necessary funds from the
Federal Unemployment Trust Fund. Each request for a loan can be
for 1 month only. The bill would permit a single loan request to
cover a 3-month period.
The change would be effective on enactment.
CETA employees.-The bill would authorize reimbursement from
Federal general revenues to the State for the cost of paying un-
employment compensation to former participants in public service
jobs under the Comprehensive Employment and Training Act
(CETA). Under present law these costs are met either from direct
State funds or from the Federal CETA grant.
The provision would be effective October 1976.
The Department of Labor estimates that enactment of this provi-
sion would cost $11 million for 1977.
C. OTHER PROVISIONS
Triggers.-The bill would modify the triggers which determine
when extended unemployment compensation benefits are payable in
a State.
The new triggers would be:
A seasonally adjusted national uninsured unemployment rate
of 4.5 percent based on the most recent 13-week period (rather
than 3 consecutive months) ; or
A seasonally adjusted (rather than unadjusted) State insured
unemployment rate of 4 percent for the most recent 13-week
period.
The provision of present law requiring that the State insured
unemployment rate also be 120 percent of the rate for the correspond-
ing period in the 2 preceding years would be eliminated on a perma-






28


nent basis. This requirement has been spded through mm
the period since enactment of the extended benefits p
Dsqualifation for pregnawy.-The bill would p the 81
from disqualifying a woman for mployment comn
because she is, or recently has been, pregnant.
The new provision would be effective for years after 7.
Profesionai athletes and illegal aliena,-The bill woudrqi
States to include in their unemployment
provision specifically precluding the payment of un
compensation:
(1) To a professional athlete between two playing s
has "reasonable assurance" of reemployment in the
son: and
(2) To an alien who was not lawfully admitted to
States.
The new requirement would be effective for years after
A ppeals by Federal employees.-The bill would permit
former employees of the Federal Government to use the
ment compensation appeals process of the State under w
their benefits are determined.
Coinni.sion on unemployment corpensation.-Theb
establish a commission to study the unemployment comn
gram and to issue a report not later than January 1, 1979. Then
bers of the Commission would be appointed by the
members, including the chairman), the President pro
Senate (3 Members) and the Speaker of the House of Rep
(3 Members).
The bill would authorize appropriations from general re
meet the cost of the Commission.

II. Coverage Provisions of H.R. 10210
IT.R. 10210 as paswd by the House of Representatives would b
under the Federal-State unemployment compensation system
greater part of those jobs which are now exempt from the Fe
unemployment tax and are consequently not now covered u
State programs except to the extent that States have volunh
elected to provide such coverae. lUnder the House bill, agricult
and domestic work would be covered through the traditional appr(
of making the Federal unemployment tax applicable to such emp
meant. Employment for State and local governments and employn
for nonprofit elementary and secondary schools, however, would
main exempt from the Federal unemployment tax, but State w4
be required to provide coverage under State law for such jobs.
If a State did not comply with this requirement, private emplo
in the States would lose the tax credit they now enjoy by reaw
participating in an approved State unemployment p r(
credit is equal to 2.7 percent out of the total Federal ploy
tax of 3.2 percent.) States would also los Federal funding for
costs of administering their unemployment programs.




29


UNEMPLOYMENT COMPENSATION COVERAGE UNDER PRESENT
LAW AND H.R. 102101

Employment
Numbers (in Percent of
thousands) total

Total ...................................... 83,609 100
Covered under present law ................ 72,385 87
Under State programs ................ 66,700
Federal employees/military ........... 5,093
Railroad ............................... 592
Added to coverage under H.R. 10210..... 8,634 10
Farm workers ...................... 380
State government ..................... 600
Local government ..................... 7,100
Domestics ......................... 308
Nonprofit organizations ............... 242
Virgin Islands ........................ 4
Remaining uncovered under H.R. 10210. 2,590
Small firms ........................200
Small farms ......................... 906
Dom estics ............................. 1,060
Nonprofit organizations ............... 324
Other ........................... 100
1 Based on most recent available data (1974) modified to reflect some ex-
tensions of coverage since that time, notably, coverage of farm employment in
California.


75-762-76--3









Present1d Prpod U o Wq
Under t.R. 10


CALENDAR YEAR 1974


7.mOCAL GOVERNEN


PROTECT S
BY STATE LAWS
06U1honI


*BOWs on S4e Mt AWIIQVployne IIWuwce3* laws o e prvisiosaso Decmber31. 19W4
"Enc8W dergymm a mnbm01 teom ws. student nm. inad Sudn rn w
wldu etn g l d
"*'Exldc lrm Coerage unOW Oiit ol emloye agficuituf


A. FAM WoMM


Although Federal law does not require coverage of a

laws of four juridcin (District of ColumbiMneo
and Perto Rico) provide unempom tc
tural employment. In addition, Califori law authorizes co
agricultural employment starting January 1,1976 but the
has been temporarily suspended until termination of the S]
employment Assistance (SUA) program (see above, p. '
provides benefits funded from Federal general revenues f
provides benefits on a somewhat different basis from the ri
employment program.


Compari8on of Agricultural Coverage ProVi8ione


Proivio
H.R. 10210 .................

California I ----------------

District of Columbia ----
Hawaii----------------
Minnesota---------------
Puerto Rico----- --------..-
Title II of Social Security Act


De7ition of employer for coverage psi
Four or more workers in 20 weeks oi
$10,000 in any quarter.
One or more workers and payroll c
quarter.
One or more workers at any time.
Twenty or more workers in 20 weeks.
Four or more workers in 20 weeks.
One or more workers at any time.
Any farm employer but only with
employees who work 20 or morE
year or earn $150 or more annually


IBenefit provisions suspended at present because of Special
program.


101'n
0V







Definition of emaployer.-The number of jobs which would be cov-
ered if unemployment compensation is extende(l to agricultural eii-
ployment depends on the definition of employer. If em-1ployer were
defined as an individual who hires one or more w workers in each of 20
weeks in a year or who pays wages of $1,500 in any calendlar quarter
about 34 percent of the farm employers and 98 percent of workers
would be covered. This is the definition which now applies to nonfarn
employment. Under the definition contained in the House bill as it
was reported by the Ways and Means Committee-four or more em-
ployees in each of 20 weeks in a year or wages of $5,000 or more in any
calendar quarter-about 7 percent of the employers and 61 percent of
the employees would be covered. A House floor amendment modified
the definition in the House bill to four or more workers in each of 20
weeks or wages of $10,000 or more in a calendar quarter. Under this
definition, about 6 percent of farm employers and 59 percent of farm
employees would be covered.












EXTENT OF AGRICULTURAL COVERAGE UNDER THREE DEFINITIONS OF EMPLOYMENT

H.R. 10210 Alternative definitions
4 or more workers 4 or more workers 1 or more workers
in 20 weeks or in 20 weeks or in 20 weeks or
Total farm $10,000 in any $5,000 in any $1,500 in any
employment quarter quarter quarter

Agricultural employers:
Number ............................... 986,000 60,700 69,000 332t,8
Percent................... ........... 100 6 7 34
Average employment:
Number ................................ 1,158,900 683,200 710,100 1,13,87
Percent. ................. .............. 100 59 61


I This definition was included in the bill H.R. 10210 as reported by
the Ways and Means Committee. The definition now in the bill was
substituted by a House floor amendment.


$ This is the definition of employment now used for
ployment.
3 Estimates as of 1977.


non-farm em-






33


Crew leader.-A persistent problem in the past in devising pro-
posed coverage for agricultural workers has been how to best insure
the payment of contributions and reporting of necessar- information
for the payment of benefits to eligible farmworkers employed by crew
leaders. This problem is particularly difficult with respect to crew
leaders who are employers of migratory workers. When this problem
was faced some years ago in connection with title II of the Social
Security Act, the law was written to specify that the crew leader would
be responsible for collecting the employee tax and for paying the em-
ployer tax. The high geographic mobility of crew leaders made en-
forcement difficult. When the Administration sent its 1975 proposal
for covering farmworkers under unemployment compensation, it
suggested that the farm operator be considered the employer for pur-
poses of paying unemployment compensation taxes. An exception was
proposed for mechanical harvesting crews, crop dusters, et cetera, who
supply mechanical equipment along with the crews to operate and
maintain the equipment, in which case, the "crew leader" would be the
employer.
Under the House-passed bill, the crew leader would be considered
the employer and thus be responsible for paying the unemployment
tax and submitting the required reports if he was involved in pro-
viding the service of mechanized equipment-crop dusting, mecha-
nized harvesting, et cetera-or if he was registered under the Farm
Labor Contractor Registration Act. Since that act now requires
registration for most crew leaders-an exception is made for those
operating both within a 25-mile radius of their homes and for no
more than 13 weeks per year-the House bill would generally make
the crew leader the employer. The bill provides, however, that the
farm operator would be considered as the employer in cases where
the crew leader is in fact the farmer's own employee and in cases
where the farmer and the crew leader have a written agTeement under
which the farm operator will act as employer for unemployment
compensation purposes.
Noncoverage of alien.-The House bill would exempt from un-
employment compensation coverage certain aliens who are brou ght
into the United States on a temporary basis to work during peak
agricultural crop seasons. This exemption from coverace would ex-
pire January 1, 1980. The House report indicates that the tempo-
rary nature of this provision arises from concern that employers
would be encouraged to hire aliens rather than domestic workers
because of the alien exemption from the unemployment tax. Under
the social security program such aliens are also exempt from the 11.7
percent FICA tax.
Cost of agricutural covierage.-1H.R. 10210 would extend coverage
under State unemployment compensation programs to 327,000 farm
workers who are not now covered. Employment would be covered
effective January 1, 1978. If a State elects to pay benefits on the basis
of employment prior to that date which is not covered under present
law, the cost of benefits paid starting January 1978 on the basis of
that employment will be paid from Federal general revenues. (Until
July 1, 1978, the bill also provides for Federal payment of the cost
of benefits based on employment during the first 6 months of 1978.)







This provision is expected to require Federal mire
tures of $160 million in fiscal year 1978 and
1979.
ESTIMATED BENEFIT PAYMENTS TO AGRIGULTUI
WORKERS RESULTING FROM H.R. 10210
(In millions]



Fiscal year benefits1

1978 .................................. $220
1979 .. . . . . .* .0 .4 .002 0
1980 ....... ................. 220
1981 ........................ .......... 220


SIncludes regular and extended benefits.
2 Under special provision described above where States provide bni
basis of employment prior to July 1, 1978.
B. STATE AND LOCAL GovEUNKENT BMPLOY!M
Under present Federal laws, the States are required ti
unemployment insurance for employees of State operated
and institutions of higher education. In addition, about oi
the States have gone beyond the Federal requirements am
mandatory coverage for State employees and permit loom
ments to opt for coverage. Nine States, Connecticut, Florida
Iowa, Michigan, Minnesota, Montana, Ohio, and Oregon r&
erage of both State and local government employment. The]
would require coverage of all State and local employees. TI
ing tables show the extent of coverage under State law as
1973 study.
PERCENTAGE OF STATE AND LOCAL GOVERNMEN
PLOYEES COVERED BY STATE UNEMPLOYMENT PR
(OCTOBER 1973)1

State
employees

Total ..... . .. ............ 76

Alabama ....................... 50
Alaska ................. ...... .. 24
Arizona................ 100
Arkansas ...... 100
California ............ 100
See footnotes at end of table.





35


PERCENTAGE OF STATE AND LOCAL GOVERNMENTAL EM-
PLOYEES COVERED BY STATE UNEMPLOYMENT PROGRAMS
(OCTOBER 1973) 1-Continued

State Local
employees employees

Colorado .............................. 58 0
Connecticut ........................... 100 100
Delaware .............................. 100 16
District of Columbia ................... 100 NA
Florida ................................ 100 100
Georgia ............................ 50 1
Hawaii ............................ 100 100
Idaho .................................. 100 13
Illinois ................................ 100 0
Indiana ................................ 50 5
Iowa ... ................................ 100 1
Kansas ............................... 43 1
Kentucky .............................. 44 0
Louisiana ............................. 100 1
M aine ................................. 38 0
Maryland ............................ 65 1
Massachusetts........................ 56 0
M ichigan .............................. 100 100
M innesota ............................. 100 100
M ississippi ............................41 (2)
Missouri .......................... 49 0
M ontana .............................. 100
Nebraska .............................. 100
Nevada ................................ 41
New Hampshire ...................... 100 3
New Jersey ............................ 34 0
New Mexico ........................... 39 0
New York .............................. 100 3
North Carolina ........................ 52 0
North Dakota .......................... 42 3
O hio ................................... 100 100
Oklahom a ............................. 100 0
Oregon................ .... 100 100
Pennsylvania .......................... 100 q
Rhode Island ......................... 100
South Carolina ........................ 44 0
South Dakota .......................... 100 0
Tennessee .........................48 (2)
Texas ................................. 100
Utah .................................. 100
See footnotes at end of table.







PERCENTAGE OF STATE AND LOCAL GOVERNMENT EM
COVERED BY STATE UNEMPLOYMENT PROGRAMS(
1973) 1-Continued

State
employees

Vermont .............................. 34
Virginia ...................... . .... '100
Washington ...................... 100
West Virginia........................ 33
Wisconsin ............... .......... 100
Wyoming ...............

Where 100 percent coverage is indicated, substantially all empi
covered although some positions (e.g. elected officials) may be exclude
2 Less than 0.05 percent.

COVERAGE OF STATE AND LOCAL GOVERNMENT EMI
UNDER PRESENT STATE LAW1

State agencies Local units of govern
Required 2 Permitted Required Permitti

Alabama 3
Alaska Alask;
Arizona Arizor
Arkansas
California California s Califo
Colorado Colon
Connecticut Connecticut
Delaware Del a
District of
Columbia
Florida Florida
Hawaii Hawaii
Idaho Idaho3
Illinois
Indiana s
Iowa Iowa
Kansc
Kentucky..
Louisiana Louisi
Maryland Maryland Maryl
Massachu-
setts'
Michigan Michigan
Minnesota Minnesota
See footnotes at end of table.





37


COVERAGE OF STATE AND LOCAL GOVERNMENT EMPLOYEES
UNDER PRESENT STATE LAW '-Continued

State agencies Local units of government
Required 2 Permitted Required Permitted


Montana
Nebraska
New Hampshire
New Jersey
New York
Ohio
Oklahoma
Oregon
Pennsylvania
Puerto Rico 3
Rhode Island
South Dakota
Texas
Utah


Missouri

Nevada


North Dakota


Montana


New York3
Ohio


Oregon


Puerto Rico 3


Tennessee


Missouri
Nebraska
Nevada
New Hamp-
shire

New York
North Dakota


Pennsylvania 3

Rhode Island
South Dakota
Tennessee
Texas
Utah


Wyoming


Washington
Wisconsin 3


Vermont
Virginia
Washington
Wisconsin
Wyoming


1 Certain positions (e.g. elective officials) may not be covered. In addition, some
States not shown as specifically providing for coverage of State or local employ-
ment have provisions in State law generally permitting noncovered employers to
elect coverage and some State and local employment may be covered under such
provisions.
2 In addition to coverage of employment for State hospitals and institutions of
higher education which is provided in all States as required by Federal law.
3 Limited to certain agencies or localities.


Virginia
Washington
Wisconsin





38


Pof House bill-Under H.R. 101, State
ement employment would continue to be exempt I
unemployment payroll tax. States would, however, be
provide r ve such employment as a coudit
tinued participation in the Federal-State unemplo
tion program. (Failure to participate would, in effe
Federal unemployment tax on employers in the State fri
percent and would deprive the State of Federal funds t
ministrative expenses and part of the benefit costs for b
after the 26th week of unemployment.)
All State and local government employees would have t
except elected officials, members of the legislature or judicif
appointed for specific statutory terms or to part-time
bers of the National Guard, prisoners, and persons hired
rary jobs in emergency situations. With the above except
ployment after December 31, 1977 would be covered. Un
the State law would have to permit the emplo entity tc
coverage either through contributions equivalent to the St
tax or by reimbursing the fund for benefits paid to
employees.
C(Institutsionality.-Generally, mandatory Federal cove
the Federal-State unemployment compensation program
virtue of applying the Federal unemployment payroll tax
ployment in question. It then becomes of no advantage -
that employment under the State program since failure to'
eliminate the 2.7-percent Federal tax credit which wouk
apply. In the case of State and local government employ
ever, such a procedure would raise questions of the power (
eral Government under the Constitution to lay a tax upon a
function. Consequently, the House bill would continue to ex
and local employment from the Federal tax but require c
such employment as a condition of approving the State. pro
type of mandatory Federal coverage was applied in the 1.
ments to require States to provide unemployment compen
section to employees of State hospitals and State institution
education.
A recent Supreme Court decision (NatiaZ League o
User 7) invalidated provisions of the 1974 Fair Labor
Amendments which had extended minimum wage coveraj
and local government employees. The Solicitor of the Dep
Labor has issued an opinion holding that that decision is
cable to the H.R. 10210 provisions extending unemploymei
sation coverage to such employees. An opinion prepared fc
mittee by the Congressional Research Service, however, hc
is an open question whether those provisions would be foun
tional. Both opinions are printed as an appendix to this doc-
Coverage of 8cha a employees during vacation perks
present law, States are required to provide coverage for en
State institutions of higher education with benefits payabh
same conditions as apply to other individuals covered undi





39


gram except that no benefits are payable during a summe vacation
(or similar period between terms) to persons in academic or principal
administrative positions who have contracts for the following term
(whether or not at the same institution). The House bill, which ex-
tends coverage to all State and local employees, would make this pro-
vision applicable to such employees regardless of tyl)e of school. In
addition, the Hou.e bill permits States to deny benefits to nonprofes-
sional employees during vacation periods if they have reasoiinale
assurance of continuing in that employment in the following terni.
Starting in 1980, however, this option would expire and State and
local governments would have to provide benefits during the vacation
period to nonprofessional employees who cannot find employment dur-
ing that time.
Administrative and extended benefit costs.-Under existing law, the
Federal accounts in the trust fund provide full payment of the adimin-
istrative costs of operating State unemployment compensation pro-
grams and also pay one-half of the costs of benefits under the
Federal-State Extended Unemployment Compensation Act. That Act
provides in times of high unemployment for up to 13 weeks of added
benefits after a worker exhausts his regular benefit eligibility. This
Federal funding is provided from the Federal unemployment pay-
roll tax, but it applies not only to those whose employment was sub-
ject to that tax but also to those whose employment, although covered
under State law, was exempt from the Federal tax. Thus. the costs
of administering benefits for former State and local government em-
ployees and one-half of the cost of extended benefits for them are
funded in this way. The House bill includes a provision which would
eliminate Federal funding for these costs. It is estimated that the
annual administrative costs applicable to State and local employees
under H.R. 10210 will be $4.3 million in fiscal 1978 and will rise to
$11.6 million by fiscal year 1981.
Under H.R. 10210, the cost of extended benefits for State and local
government employers is expected to reach a level of approximately
$10 million by 1980. Under this provision, this amount would be
fully charged to State and local employers.
Costs of State and local coverage.-The provisions of H.R. 10210
would extend coverage under the unemployment compensation pro-
gram to some 588,000 State employees who are not now covered and
to about 7.7 million employees of local governments. State programs
would be required to pay benefits on the basis of employment taking
place after December 31, 1977. If States elect to pay benefits on the
basis of this previously uncovered employment prior to that date. the
costs of any such benefits payable after January 1. 1978. would be
reimbursed from Federal general revenues. (Federal reimlmi recent
would also be made for benefits paid prior to July 1, 1978. on the bsis
of State or local employment during the first 6 months of 197S.) The
table below indicates the benefits which would be paid as a result of
the State and local coverage provisions of H.R. 10-210.





40
ESTIMATED UNEMPLOYMENT BENEFIT PAYMENTS
STATE AND LOCAL GOVERNMENT EMPLOYMENT 0
'BY H.R. 10210
[in millions]

Total
unemplyet ri
Fiscal year paymentsI

1978 ..................................$200
1979 .210
1980 ......................... .. 230
1981 ........................

1 Includes regular and extended benefits.
I Under special provision described above where States provide bene
basis of employment prior to July 1, 1978.
C. NoNPROFIT ORGANIZATIONS
Elenentary and secondary scos.--Prior to the 1970 ame
nonprofit organizations, which are exempt from taxation u
Internal Revenue Code, were covered as employers for unemj
compensation purposes only at the option of the States..
amendments required States to provide coverage for noup
ployers who have at least four employees in at least'20 wee
year. However, an exception in the law allows States to exda
coverage nonprofit elementary and secondary schools. H.
would repeal this exclusion, thus requiring coverage for sue.
on the same basis as it is required for other nonpro entities.
The Department of Labor estimates that $10 million in 4
benefits would be payable as a result of this provision in e
fiscal years 1978-81. In fiscal year 1978, $8 million of this tot
be paid for from Federal general revenues under the bill
start-up provisions.
Special provigiom for certain nonprofit emplayer8.-When
amendments required the extension of coverage to nonprofit
ers, a provision was also added allowing such organization
for their coverage by reimbursing the State unemployment
any benefits paid to their former employees (on the basis of
ployment). If they chose this option, they would not be re
pay the State unemployment taxes otherwise applicable.
amendments also permitted any nonprofit entity which had
ered prior to those amendments to switch to this renibursemi
od of paying for its coverage and to take credit for anyp
unemployment taxes it had paid in excess of what it would I
under the reimbursement method. This opportunity was
however, only if permitted by State law and only if the
employer made an election to change to the reimbursement
at the first opportunity.







The Hoag Memorial Hospital in California had elected and later
terminated unemployment compensation coverage for its employees
prior to the 1970 amendments which made such coverage mandatory
as of January 1972. However, since the hospital did not have unem-
ployment coverage in effect during the period between the enactment
of the 1970 amendments and January 1979 when coverage lbecalme
mandatory, its election of the reimbursement method di(d not take
place at the earliest time possible under State law, namely in 1971. As
a result, the hospital was barred from claiming the credit which
would otherwise have been allowed for the excess of its past contribu-
tions over the benefit payments made to its former employees. A provi-
sion in H.R. 10210 would allow that institution (and any other non-
profit organization which may be in similar circumstances) to claim
the retroactive credit provided that it elected the reimbursement
method by April 1, 1972.
A provision similar to that adopted in 1970 allowing nonprofit em-
ployers to take credit for past excess contributions is included in I.R.
10210 for the nonprofit schools for which coverage is mandated by the
bill.
D. DOMESTIC SERVICE WORKERS
At present, the coverage of domestic service in private households
under the unemployment compensation program depends on the pro-
visions of State law. Only three States and the District of Columbia
provide coverage. In the District and in New York, domestic workers
are covered if the employer's quarterly payroll is $500 or more; cover-
age in Hawaii comes when the quarterly payroll is at least $225; and
in Arkansas, employers of three or more or a quarterly payroll of $500
are covered.
H.R. 10210 would require the States to provide coverage when the
employer has a payroll of $600 or more in a calendar quarter. This
would provide coverage for about one-quarter (300,000) of all do-
mestic service jobs. The House report indicates that the $600 quarter
amount was arrived at as a means of excluding from coverage the
householder who employed primarily one person for 1 day a week.
Domestic workers have been excluded from unemployment coverage
in the past mainly because of anticipated administrative problems.
Supporters of extending coverage point out that the experience of the
States which have covered domestic workers, and experience under
title II of the Social Security Act, demonstrate that the administra-
tive problems are manageable. Under title II, domestic service for
any employer is subject to coverage if the person employed is paid
$50 or more in the calendar quarter. Total domestic employment is
estimated at 1.2 million of which only about 26,000 are now covered.
H.R. 10210 would extend coverage to an additional 264.000 domestic
workers bringing coverage to about 24 percent of all domestic
employment.







ESTIMATED UNEMPLOYMENT BENEFIT PAYMENI
DMESTIC EMPLOYMENT COVERED BY H.R
[olIars in millions]


FiscI year





I Coverage is effective for employment after 1977, but Federa fmi
ment is available under the bill if States eiect to~ provide benefits Sh
1978, on the basis of employment prior to 1978 (Federal fund ri
also provided for benefits paid prior to July 1, 1978, on the basis of a
the first 6 months of 1978).
E. INCLUSION OF VIRGIN I&5AND) I THE FEDERAL-S
UNEMPLOYMENT INSURANCE SYSTEM
Under existing Federal law, the Virgin Islands is exeltd
Federal-State system of unemployment insurance. The Vii
has for several years had asimilar unemployment insure
however and the territorial government has formallyre
the Virgin Islands be included in the Federa- State syst
The inclusion of the Virgin Islands in the Federal-Stat
ment system as proposed in H.R. 10210 would extend te
diction the Federal unemployment tax and thus increase
revenues to the Federal accounts in the unemployment tru
the same time, it would provide new or modified fund
Virgin Islands programs as shown in the table below.
FUNDING CHANGES FOR VIRGIN ISLANDS UNEMPi
PROGRAM UNDER H.R. 10210


Expenditure type


Current funding


Regular benefits.....
Administrative costs:
Compensation
system.
Employment
service.


Territorial tax...
.. .do.. # ,

Federal general
funds.


Extended benefits.....


Not in effect .......


Loans................ Federal general
funds.


5G percent
territoria
50 perce
Fed erall
fund acc
Federal trL
accounts





43


Loam8 to the Virgin Island&.-Under the Federal-State unemploy-
ment compensation system, States which exhaust their own benefit
funds may borrow from the Federal accounts in the trust fund to
meet their benefit obligations. The Virgin Islands is unable to u-e
this procedure since it is not now a part of the Federal-State system.
In Public Law 94-45, authority was provided for loans to be made
to the Virgin Islands for this purpose. Under that legislation anid
subsequent amendments, the Virgin Islands is authorized to borrow
up to $15 million which must be repaid by January 1, 1979. The law
authorizing these loans also provides that the repayment requirements
of the Federal-State unemployment compensation program will coim
into operation if the Virgin Islands is incorporated into that system
as proposed in H.R. 10210. As of July 1976, the Virgin Islands system
has borrowed $5.6 million under the authority of Public Law 94-45.

III. Financing Provisions of H.R. 10210
A. INCREASES IN THlE UNEMPLOYMENT TAXES
Financing basis.-The Federal statute now imposes a gross tax of
3.2 percent of covered wages. The tax base or maximum amount of
annual wages per employee subject to this tax is $4,200. (In 1974,
the average annual wage in covered employment was about $9,200.)
Although the gross Federal tax rate is 3.2 percent, the actual net
Federal tax rate is 0.5 percent since employers qualify for a 2.7-percent
tax credit by reason of their participation in an approved State pro-
gram. Thus, the Federal tax in all States amounts to 0.5 percent of
the first $4,200 of wages. The proceeds from this Federal tax are used
to meet the costs of administering the unemployment compensation
program-including both Federal and State costs-most of the cost
of administering public employment services, half of the cost of bene-
fit payments under the extended benefit program (for workers ex-
hausting their regular benefits), and all of the cost of the temporary
emergency benefit program (for workers exhausting both regular and
extended benefits).
The cost of regular State benefits and half the cost of extended
benefits are met from the proceeds of State unemployment taxes. The
tax base to which State taxes apply is effectively required to be at
least as high as the Federal base of $4,200, but 22 States now have
bases which exceed that level. The tax rate applied in each State may
vary from year to year according to conditions and may vary among
different employers according to experience rating factors which are
designed to allow employers a lower tax if their employees do not
experience much unemployment. Because of the heavy use of unem-
ployment benefits during the recent recessionary period, the average
State tax rate has increased from 1.9 percent in 1974 to an estimated
2.5 percent in 1976. Among the States, the estimated average tax rate
applied to taxable wages varies from 0.6 percent in Texas to 4.1
percent in Massachusetts. The tax base and average tax rate applica-
ble in each State is shown in the table which follows.






AVERAGE EMPLOYER CONTRIBUTION RATES, BY STATE-RATES SHOWN AS PERCENTAGE OF TAXABLE
AND TOTAL WAGES

Ta ae 4201976 estimated 1975 estimated 1974 actual
State except as shown Taxable TotalI Taxable TotalI Taxable TotalI

Total ...................2.5 1.2 2.0 0.9 1.91 0.90
Albm....... $41800 1/76) 1.8 1.0 1.0 .5 1.08 .55
Alaska............... 10,0001/74) 3.7 2.6 3.0 2.1 2.60 1.86
Arizona .,........... 6,000 1/76) 1.9 .9 1.4 .7 1.40 .70
Arkansas.,......... 6,000 1/77) 1.8 1.0 1.6 .9 1.50 .86
California.......... 7,00011/76) 3.6 2.1 3.1 1.3 2.66 1.22
Cooao....1.9 .9 .5 .2 .39 .19
Connecticut......... 6,000(1/75) 3.0 1.6 2.7 1.5 2.86 1.23
Delaware........... ............... 2.5 1.1 2.2 1.0 2.35 .99
District of Columbia ............. ....... 2.7 1.0 1.4 .6 1.33 .57
Florida..................*..0...... 2.1 1.0 1.1 .5 .69 .38
Georgia............ .. 6,000(1/76) 1.8 1.2 .9 .4 .88 .47
Hwi.......,7,800 1/76) 3.0 2.0 2.6 1.8 1.90 1.30
7,800(1/76) 1.7 1.2 2.3 1.2 2.30 1.20
Illinois.... 1.9 .8 1.1 .5 1.87 .81
In in ,,,.,,,,,.,,..... ...... 1.8 .8 1.1 .5 1.10 Al7
Iw........6,000(1/76) 2.3 1.4 1.1 .5 .98.4
K n a .................. 2.3 1.1 2.2 1.12021 4
Kentucy...... ,,,,*p,,. .,aaa 2.5 1.2 1.5.821
Lousiaa.* *1.91. 2.8 .4 8
Marla d .. 6 ........ ..... ......2.0 1101.3.618.6
Massa husets ...................... 4. 1.83.81.345.6


.. ... .. . ... l





Michigan ........
Minnesota .....
Mississippi .....
Missouri.....
Montana.....
Nebraska....
- Nevada....
I New Hampshire.
New Jersey.....
New Mexico.....
New York.......
North Carolina..
North Dakota...
O hio ............
Oklahoma .......
Oregon ..........
Pennsylvania...
Puerto Rico.....
Rhode Island...
South Carolina..
South Dakota...
Tennessee ......
Texas ...........
Utah ............
Vermont........
Virginia......
Washington....
West Vir ginia...
Wisconsin .......
Wyoming.....


5,400(1/76)
6,200( 1/76)
65OO( 1/76)



6,10(1/76)





7,000(1/76)


4800(1/75)
61100(1/76)








6 000(1/77)


I All wages.


3.7
1.8
2.2
2.8
2.2
2.6
3.2
2.5
3.4
1.9
3.5
1.4
2.2
2.3
1.7
3.3
2.9
3.0
3.9
2.1
1.0
1.6
.6
1.7
2.3
1.2
3.0
1.9
2.1
2.2


1.9
1.0
1.2
1.2
1.2
1.2
2.1
1.2
1.7
1.0
1.3
.6
1.0
1.0
.8
2.1
1.1
3.0
2.0
1.1
.6
.8
.3
1.0
1.2
.6
1.8
.8
1.0
1.0


2.8
1.7
.8
1.6
1.8
1.1
2.6
1.8
3.2
1.9
2.9
1.1
2.2
1.3
1.2
2.0
2.7
3.0
3.9
.9
.8
1.6
.4
1.7
2.3
.3
3.0
1.2
1.7
1.7


1.1
.8
.4
.7
.9
.5
1.5
.9
1.4
1.0
1.2
.6
1.0
.6
.6
1.0
1.1
3.0
2.1
.5
.4
.8
.2
.8
1.2
.1
1.8
.5
.7
.8


2.53
1.78
1.20
1.63
1.70
1.17
2.76
1.33
3.47
1.60
2.86
1.10
2.20
1.37
1.20
2.05
2.54
2.83
2.92
1.04
.87
1.61
.40
1.70
2.19
.33
3.00
1.20
1.52
1.10


1.02
.86
.70
.72
.90
.57
1.45
.68
1.48
.87
1.21
.54
1.02
.60
.60
1.13
1.06
2.67
1.50
.70
.49
.82
.20
.86
1.19
.17
1.76
.50
.70
.60






46


The need for additionsal $ *ncn-If the State tax rvn
insufficient to meet benefit obligations in times of high
States are permitted to borrow the ne ry fundsfromt
accounts in the trust fund. If the Federal accounts have in
funds to meet State borrowing requests and to cover the
responsibility for paying half the cost of extended benefits am
costs of emergency benefits, authority i available for
vanees from the general funds of the Treasury into
accounts of the trust fund. Because of the heavy d
unemployment compensation system made by the high leve
employment in the past few years and by the enactment of te
legislation providing benefits for up to 65 weeks duration, t)
ployment payroll taxes-both Federal and State-have prov
to meet expenses. As of the beginning of fiscal year 1977,1
f rom the general fund will amount to about $10.9 billion
estimated to increase to $14.5 billion by the end of fiscal y
Advances have been made to 21 States and total $3.1 billion.





ADVANCES TO STATES FROM FEDERAL UNEMPLOYMENT ACCOUNT
[in millions of dollars per calendar year]
1976 through
Aug. 15,
States 1972 1973 1974 1975 1976 Total

Connecticut............................... 31.8 21.7 8.5 190.2 91.0 343.2
Washington .......................................... 40.7 3.4 50.0 55.3 149.4
Verm ont ......................................................... 5.3 23.0 6.5 34.8
New Jersey ............................................... 352.2 145.0 497.2
Rhode Island................................ ............. ................... 45.8 20.0 65.8
M assachusetts ............................................................... 140.0 125.0 265.0
M ichigan ..... ............. ................................................. 326.0 245.0 57 1.0
Puerto Rico ........................................................ 35.0 12.0 47.0
M innesota ................................................................... 47.0 76.0 123.0
Maine ....................................................... 2.4 12.5 14.9 .
Pennsylvania .............. ............................... ..... ........... 173.8 255.8 429.6 "'
Delaw are ................... ................................................... ........... 6.5 7.0 13.5
District of Colum bia ......................................................... 7.0 22.6 29.6
Alabama ..................................................... 10.0 20.0 30.0
Illinois ....................................................................... 68.8 307.0 375.8
A rkansas ................................................................................. 20 .0 20.0
Hawaii ........................................................... 22.5 22.5
N evad a .................................................................................. 7 .6 7 .6
O regon ....... ................................. ............... ......................................... 18 .5 18 .5
M aryland ............. ... ... .......................................................... 36 .1 36 .1
M ontana ................................................................................. 1.4 1.4
Total ............................... 31.8 62.4 17.2 1,477.7 1,506.8 3,095.9
1 Actual loans received ........................................................................... ...................... $203.0
Less repaym ent through reduced em ployer credits .............................................................................. (12.8)
T o ta l ....................................................................................................................... 19 0 .2






48


Proi.,'ison I i m se bill-H.R. 10210 would inc
Federal unemployment tax rate from 3.2 percent to 3.4 c
leaving the tax credit at 2.7 percent. This raises the net
by 0.2 percent, that is, from the present level of 0.5 to a new ei
percent. This increased tax rate would take effect in Jaui
and would continue in effect through 1982 after which
0.5 percent net tax rate would again become applicable. (H.'
provides that the tax rate will revert to 0.5 percent at an
if the advances from the general fund have been repaid; it is n
ipated that this will be possible, however.)
The increase in the net Federal tax rate will affect only the
collected by the Federal trust fund accounts. H.R. 10210 i
the amount of annual earnings subject to taxation from
$6,000. This increase is effective January 1978 and would afi
Federal and State taxes. Since States have the ability to adji
tax rates within the overall base, the exact impact of the inc
State revenues is difficult to estimate. The following table, I
presents the estimated effect on both State and Federal ui
ment revenues under the provisions in the House bill.

IMPACT OF TAX PROVISIONS OF H.R. 10210
[In billions of dollars]

Increased revenue under
H.R. 10210
Federal Amount owe
fund
From
From higher At
higher wage
Fiscal year tax rate base 1 State TotaI

1978.......... .. 5 0.2 0,6 13.5

1979........... .8 .5 2.0 11.9
1980 .............8 .5 3.0 10.0
1981 .............8 .5 3.2 8.0
1 Revenues shown as attributable to tax rate increase are those whi
result if there were no increase in the wage base. Revenues attributab
wage base increase would be somewhat smaller if there were no concurrent
in the tax rate.
B. TIMING OF LOANS TO STATES

When States find it necessary to borrow from the Federal a
in the trust funds to meet their unemployment benefit obli
present law requires that the funds borrowed for any montli
plied for in the preceding month. H.R. 40210 includes a pi
which would permit States to apply for loans covering a f
period. D x 3 i R EPONS B ILTY FOR B NEFIT S

To FORM R FEDERAL ENIPLOY S
When unemployment benefits are paid by a State to a form
ber of the armed services or Federal employee, the costs of 11





49


fits attributable to Federal employment are paid for from Federal
general revenues and the costs, if any, resulting from non-Federal emi-
ployment are paid from State fund. Under present law, the amount of
Federal reimbursement is determined by computing the amriouit of
benefits actually paid over and above the compensation which would
have been paid if his Federal emlploymfent had not been used in coI-
pitting his benefits. H.R. 10210 would provide instead that the Federal
and State portions of the cost of benefits will be based on the relative
Federal and non-Federal wages of the individual during the base
period on which his unemployment compensation is computed. Thus,
if an individual had $4,000 of wages in his base period and $1,000) of
these wages came from a Federal agency employer, 25 percent of his
unemployment benefits would be paid for from Federal general
revenues.
The Department of Labor estimates that this change would have no
significant effect on the Federal payments to the States but would be
a significant administrative improvement.
D. FUNDING OF BENEFITS FOR PUBLIC SERVICE EMPLOYMENT
PARTICIPANTS
Individuals placed in public service employment funded through
the Comprehensive Employment and Training Act (CETA) must be
provided the same unemployment compensation protection that is pro-
vided to regular employees of the governmental unit which hires
them. The costs of providing such unemployment compensation cover-
age to these individuals is now met out of the CETA grant funds.
Effective October 1, 1976, H.R. 10210 would provide for funding un-
employment compensation for CETA participants as though they
were Federal employees under the procedures described in section C
above. In effect, this provision indirectly increases the CET authori-
zation by transferring some of the costs of public service employment
under that program to the Federal unemployment benefits account.
Estimated Federal Paymeints for Benefits to CETA Participants
[In millions]
Federal
Fiscal year: payentsR
1977 -------------------------------------------------------------$11
1978 ------------------------------------------------------------- 1
1979 ------------------------------------------------------------- 1
1980 1
1981 ---------------------------------------------------------------1
IV. Extended Benefit Triggers
The Federal-State Extended Unemployment Compensation Act of
1970 provides for the payment of additional weeks of benefits to in-
dividuals who exhaust their benefit entitlement under the regular
State programs. The additional entitlement is in the same weekly
amount as the regular entitlement and continues for half as long as
the regular entitlement. Thus, an individual entitled to the imximumi
duration of 26 weeks of regular benefits could receive up to 13 addi-
tional weeks of extended benefits. Half the funding of the extended
benefits comes from State unemployment taxes and half comes from
the Federal tax.






Change in national C*Vger.-Beneflts under the etne
program are payable only m periods of hghu
nent law makes the program effective in all
insured unemployment rate on a s
percent for 3 consecutive months, and the program contin
until that rate declines below 4.5 percent for 3
temporary provision which expire December 31,1976
to participate in the extended benefit program as
trigger rate were 4 percent rather than 4.5 percent.) H 1
modify the permanent law by providing that the progr
effect in all States when the seasonally adjusted 4.5
insured unemployment rate for a given wee and th
averagms 4.5 percent or more and will cease to be in efect m
rate for a given week and the 12 prior weeks ave
percent.
The Department of Labor believes that this chan fri
secutive months to a moving 13 week average woul d
the program somewhat more responsive to changes in the
economy in that it would trigger on or off more quickly in
to very sharp changes in national insured unemployment ra
expected, however, that under either present law or the rev
vision in H.R. 10210 the program would remain in efft tb
least the end of the 1977 calendar year.
NATIONAL INSURED UNEMPLOYMENT RATE
[In percent]

Month 1971 1972 1973 1974 1975

January.. ........... 4.09 2.87 3.18 5.96
February............... 4.25 2.91 3.38 6.68
March ..................... 4.32 2.94 3.59 7.30
April .................... .3.98 2.79 3.69 7.83
May ..................... 4.00 2.81 3.69 8.07
June ................. 3.92 2.81 3.65 7.93
July ....................... 3.91 2.72 3.58 7.57
August ................... 3.52 2.75 3.51 7.28
September ...... 4.85 3.54 2.78 3.72 7.28
October ........... 4.85 3.37 2.74 4.00 6.99
November ......... 4.64 3.34 2.83 4.52 6.46
December ......... 4.30 3.23 2.95 5.26 6.04


Change in the State ttigger.-From December 1971 to N
1974, the national insured unemployment rate was below tbA
nent law 4.5 percent rate which triggers the extended benefit
into operation in all States. When the national trir is "ofl
participate in the program only if the State trigger required
met. Under permanent law, the extended unemployment
program becomes effective in a State when two requirements
The rate of insured unemployment in the State (not
justed) must reach a level of 4 percent or more average(






13-week period and the rate for that 13-week period must be at least
20 percent higher than the average of the State insured unemployment
rate in the same 13-week period of the preceding 2 years.
When a State experiences a prolonged period of high unemploy-
ment, the "20 percent higher" requirement becomes very difficult to
meet even if there is a very high level of unemployment in the State.
Thus, for much of the period since the extended unemlloyment com-
pensation program was enacted in 1970, the second part of the trigger
requirement (an insured unemployment rate 20 percent above the rate
revealing in the 2 prior years) has been suspended. The table which
follows shows the various temporary provisions of law which have
been enacted to suspend this requirement.
TEMPORARY LEGISLATION SUSPENDING 120-PERCENT
REQUIREMENT IN STATE EXTENDED TRIGGERS

Date Law Action

Oct. 27, 1972...... Public Law 92-599. Suspended 120-percent
"off" indicator through
June30, 1973.
July 1, 1973 ....... Public Law93-53.. Suspended 120 percent
for both "on" and "off"
indicators through Dec.
31, 1973, with "tail-
off" through Mar. 31,
1974.
Dec.31, 1973..... Public Law93-233. Suspended 120 percent
for both "on" and "off"
indicators through Mar.
31, 1974.
Mar.28, 1974..... Public Law 93-256. Extended suspension of
120-percent indicators
until July 1, 1974.
June30, 1974 ..... Public Law93-329. Extended suspension of
120-percent indicators
until Aug. 31, 1974.
Aug. 7, 1974....... Public Law 93-368. Extended suspension of
120-percent indicators
until Apr. 30, 1975.
Dec.31, 1974..... Public Law 93-572. The Emergency Unem-
ployment Compensa-
tion Act of 1974 in-
cluded a provision per-
mitting States to waive
120-percent indicators
until Dec. 31, 1976.
June30, 1975..... Public Law94-45.. Extended waiver provi-
sion of the Emergency
Unemployment Ccm-
pensation Act until
Var. 31, 1977.





52
H.R. 10210 would modify the Stat. trigr re
tended unemployment benefits by substituting a
State insured unemployment rate of 4 percent a the trigg
stead of the unadjusted factor now used. The "20 por
requirement would be eliminated permanently under
The change would become effective as of January 1977;
would not have any impact until much later since the uatio
is expected to be "on" at least through the end of 19 .
STATE EXTENDED BENEFIT INDICATORS I (AS OF
1976)

13-week
insured unem-
ployment rate I
State (unadjusted)

Alabama .......................... 5.25
A laska ................................. 7.30
Arizona .................... 5.24
Arkansas .............................. 5.20
California 2.......... ........................ 6.48
Colorado3 ............................. 3.34
Connecticut ....... .. ................... 7.09
Delaware 2............................. 4.73
District of Columbia ................... 3.47
Florida ................................ 4.61
Georgia ........ .... ... ........... 4.22
Hawa i ... ....... ... ............ 6.04
Idaho.................................. 4.44
Illinois 6....................... 6.07
Indiana 2.................... 2.67
Iowa............................ 3.31
Kansas ................................ 3.02
Kentucky .................... 4.34
Louisiana .................... 3.59
M aine ................................. 6.65
M aryland .............................. 4.01
M assachusetts ........................ 6.51
Michigan I ................... 6.63
M innesota ............................. 3.59
Mississippi ................. 3.92
M issouri .............................. 4.33
M ontana .............................. 5.01
Nebraska .............................. 2.55
N evada........... ...................... 6.12
New Hampshire ....................... 3.32
See footnotes at end of table.





53

STATE EXTENDED BENEFIT INDICATORS1 (AS OF
JULY 31, 1976)-Continued

13-week Percent of
insured unem- comparable
ployment rate period in prior
State (unadjusted) 2 years

New Jersey. ........................... 7.68 94
New Mexico ........................... 4.65 96
New York.... .......................... 6.66 103
North Carolina ........................ 3.90 89
North Dakota .......................... 2.33 103
O hio ................................... 3.19 8 1
Oklahom a ............................. 4.12 112
Oregon .... ........................ 5.78 95
Pennsylvania .......................... 6.38 105
Puerto Rico ........................... 17.07 115
Rhode Island .......................... 7.51 85
South Carolina ........................ 4.50 85
South Dakota .......................... 2.04 101
Tennessee... ............................................ 4.67 93
Texas ................................. 1.87 95
Utah .................................. 3.63 95
Verm ont ............................... 6.44 90
Virginia ............................... 2.18 84
W ashington ........................... 8.05 96
West Virginia .......................... 4.23 96
W isconsin ............................. 3.88 96
W yom ing .............................. 1.69 112
1 Extended benefits are now payable in all States on the basis of national insured
unemployment rates (seasonally adjusted) which are: May, 5.32 percent; June,
5.47 percent; July, 5.49 percent.
2As of July 24, 1976.
3As of June 26, 1976.
4As of July 17, 1976.
Impact of State trigger change in 11.1?. 10210.-A simulation study
conducted by the Department of Labor compared the impact of the
current law State trigger mechanism (4 percent unadjusted insured
unemployment and 120 percent of the rate prevailing in the com-
parable weeks of the 2 prior years) and the H.R. 10210 mechainsin
(4-percent seasonally adjusted insured unemployment). These factors
were applied to the years 1957-73. The table which follows shows the
average number of weeks during which each State would have been
triggered "on" under the two alternative criteria in each of those years.
The table also shows the impact of simply eliminating the -20 percent
higher" requirement while continuing to use an unadjusted 4 percent
trigger. The results shown in the table do not take into account the
impact of the national triger.







NUMBER OF WEEKS OF ECTENDEL
ALTERNATIVE STA


0
H.R. 10210:
seaonaly4.0% not-
Stae adjusted adjusted pr

Alabama ........................ 19.8 21.5
Alaska ...................,............. 4 .6 43.3
Arizona .3............ 1.5 12.7
Arkans as .. 27.9 8
California ....................... 37.4 3.
Colorado ........................ 0 3.5
Connecticut ...........18.0 2.1
Delaware ........................ 4.6 8.4
District of Columbia............ 0 0
Florida .......................... 6.9 6.0

Georgia....................... 9.8 10.5
Hawaii ................. 8.4 10.2
Idaho ............................ 32.1 23.9
Illinois .......................... 6.2 8.2
Indiana ....................... 7.0 9.9
Iowa ............................. .8 4.8
Kansas 5..... ............. 5.4 9.3
Kentucky ........................ 24.4 25.4
Louisiana ....................... 19.5 19.2
Maine ........................... 36.2 31.5
Maryland ........................ 17.5 16,3
Massachusetts ............... 33.4 33.3
Michigan ........................ 25.5 26.8
Minnesota ....................... 15.8 17.1
Mississippi ................. 22.9 20.6
Missouri ...................... 11.4 14.2
Montana ................ 34.1 26.4
Nebraska ................ ....... 0 6.5
Nevada ............. 4.3 30.8
New Hampshir. 15.5 15.7
New Jersey....... .............. 36.8 37.1
................... 12.8 16.6
New York.... .......... 29.7 27.7
North Carolina..... 14.9 14.6
North a. 27. 1 24.1


See footnotes at end of table.






55


NUMBER OF WEEKS OF EXTENDED BENEFITS EACH YEAR UNDER
ALTERNATIVE STATE TRIGGERS '-Continued

Current law:
H.R. 10210: 4.0% not
4.0% adjusted and
seasonally 4.0% not 120% of
State adjusted adjusted prior 2 years

Ohio ............................. 10.7 12.7 7.1
Oklahoma ....................... 18.9 18.8 8.0
Oregon .......................... 34.9 29.7 10.9
Pennsylvania .................... 28.8 30.0 11.0
Puerto Rico ..................... 39.1 42.6 9.7
Rhode Island .................... 35.9 35.8 11.4
South Carolina .................. 6.6 7.3 4.1
South Dakota .................... 0 11.2 3.1
Tennessee ...................... 23.1 23.6 6.1
Texas ........................... 1.1 1.7 1.7
Utah ............................ 7.9 17.4 3.5
Vermont ......................... 31.4 27.0 11.5
Virginia ..........................8 2.2 2.2
Washington ..................... 41.5 40.6 11.9
West Virginia .................... 25.4 29.2 7.8
W isconsin ....................... 6.9 10.4 6.9
Wyoming ...................... 11.2 13.0 4.5
Average of all States ............ 19.0 19.5 7.0
'As determined by Labor Department simulation study based on data from 1957-1973.

COST OF CHANGE IN STATE TRIGGERS UNDER H.R. 10210
Additional benefits
Fiscal year (millions)


1977.....
1978.....
1979.....
1980 .....
1981 .....


. . . . . . . . . . . . . . . . . . . . . $ 0
. . . . . . . . . . . . . . . . . . . . . 3 0 0
. . . . . . . . . . . . . . . . . . . . . 3 0 0
. . . . . . . . . . . . . . . . . . . . . 3 0 0


V. Provisions Related to Benefit Eligibility
A. DISQUALIFICATION FOR PREGNANCY
In order to qualify for unemployment compensation benefits, a
worker must be able to work, be seeking employment, and be available
for employment. In a number of States, an individual whose unem-
ployment is related to pregnancy is barred from receiving any unem-
ployment benefits. In 1975 the Supreme Court found a provision
of this type in the Utah unemployment compensation statute to be
unconstitutional. The Utah requirement had disqualified workers for
a period of 18 weeks (12 weeks before birth through 6 weeks after







birth). The Court stated -that conclusive presumption
during so long a period before and r childbirth is co
invalid." A number of other States have similar provisk
most appear to involve somewhat shorter periods of di4
The House bill includes a provision which would pi
from continuing to enforce any provision which deni,
ment compensation benefits solely on the basis of pi
recency of pregnancy). Pregnant individuals would, I
tinue to be required to meet generally applicable crit
ability for work and ability to work. The text of the 1
Court decision is printed as appendix C. The following i
the most recent available information concerning Sta
ment compensation provisions disqualifying individualh
of pregnancy.
STATE PROVISIONS LIMITING UNEMPLOYMENT
ON THE BASIS OF PREGNANCY


Benefits generally unavailable


State


Before birth


Alabama .......... Duration of unem-
ployment.


Arkansas.


.............. d o ............ ....


Delaware ..........
Indiana...........
Maryland ..........
Minnesota .........
Montana ..........


Nevada ............
New Jersey ........
O hio ...............


If unable to work.....
Duration of unem-
ployment. I
While physically
unable to work.
Duration of unem-
ployment.'
2 months unless
individual can
prove ability to
work.
Duration of unem-
ployment.
4 weeks ...............
Duration of unem-
p1oyment.


Oregon ........... do ................
Tennessee ............. do ................
West Virginia ..........do .2........


Until individual
worked 6 wi
2 months uni
individual c
prove ability
work.
Until proof of
to work.
4 weeks.
Until medical
evidence of
to work.
Until adminis
finds able ti
21 da s after
Until indlvidu


IApplies only if individual voluntarily quit employment.
2 If laid off and medical evidence of ability to work is presented,
limited to 6 weeks before and after birth.





57


B. FINALITY OF FEDERAL AGENCY FIi DING;S
State unemployment compensation agencies are required to grant
an impartial hearing to persis whose clai iis for uneiiplo ynent
benefits are denied. In any case where all or pIaIt of the emiplovnent
on which benefits are to be based was with a Federal agencY, however
the findings of that agency are not subject to review by a Slate agency
hearing officer insofar as they concern: the fact of Federal en)loy-
mient, the period of Federal service and amount of Federal wages, or
the reasons for terminating Federal employment. While a hearing is
not permitted on these issues at the State agency level, individuals
disputing these issues are entitled to a comparable hearing within the
Federal agency involved.
The House bill would allow these issues to be decided by the State
agency hearing officer.

C. DENIAL OF UNEMPLOYMENT COMPENSATION TO ATHLETES AND
ILLEGAL ALIENS
A floor amendment to H.R. 10210 in the House of Representatives
added a provision which would require that all State unemployment
compensation programs include prohibitions against the payment of
benefits to athletes during the off season and to illegal aliens.
Professional athletes.-The bill would prohibit the payment of
benefits to a professional athlete during periods between two succes-
sive sports seasons if the athlete had been professionally participating
in such sports during the previous season and there is reasonable
assurance that he will participate in such sports during the following
season. The provision is intended to deny benefits to professional
athletes in the off season.
Illegal aliew.-The bill also prohibits payment of benefits to an
alien not lawfully admitted into the United States. The provision is
intended to deny benefits to these individuals because they cannot be
legally available for work.

VI. National Commission on Unemployment Compensation
Description and purpose of the Conmission.-The House bill estab-
lishes a National Commission on Unemployment Compensation for
the purpose of undertaking a comprehensive examination of the pres-
ent unemployment compensation system and developing appropriate
recommendations for further changes. The Commission would be com-
prised of three members appointed by the President Pro Tempore of
the Senate, three members by the Speaker of the House of Representa-
tives, and seven by the President. Selection of members of the Con-
mission would be aimed at assuring balanced representation of in-
terested groups.
The Commission would be authorized to appoint such staff as it re-
quires and to contract for necessary consultant services. The final re-
port of the Commission would have to be sent to the President and to
Congress by January 1, 1979, and the Commission would terminate
90 days after the report is submitted.
Agenda items for the Comami sion.-H.R. 10210 specifies a number
of matters which the Commission would be charged with studying.







The bill states that its shfIl include, without b i
the following items:
(1) Examination of adequacy, and econ
impacts, of the chan made by MR. 10210 in c
sions, and financing;
(2) Identification of appropriate pu
direction for unemployment comnson p
road unemployment insurance;
(3) Examination of issues and alternatives
ship of unemployment compensation to the
tention to long-range funding requirements and
program financing;
(4) Examination of eligibility requirements, dia
sious, and factors to consider in deteringapois
amounts and duration;
(5) Examination of (A) the problems of claimant fraud
in the unemployment(B)
of present statutory requirements and administrative p
signed to protect the progrms against such fraud and abs
(6) Examination of e relationshp between
pensation programs and manpower training and mly
grams;
(7) Examination of the appropriate roleof unem
station in income maintenance and its relationship to
surance and income maintenance programs;
(8) Conduct of such hiring, research, and
as it deems to e ittoformula.teappropriate
dations, and to obtain relevant information, attitudes, oi
nations from individuals and
ployers, employees, and the general public;
(9) Rview of the peet nwtho4 of colleding and anatlyz
ent and prospective natioal and local employment and u:
ment and statistics;
(10) Identification of any weaknesses in such method and i
lem which results from the operation of such method; and
(U1) Formulation of any incsayor appropriate new b
for the collection and analysis of such information and stati

VII. Overall Impact of H.R. 10210 on Costs, Revenues,andi
In the past few years, high levels of ployment b.
heavy demands on the Federal-Sta-te Unemploymet Com
system. In addition to the substantially inc
permanent programs of regular and extended unempl
station, the temporary emergency benefits program enacted in
also required substantial funding. As a result, some 2 St
exhausted their reserves and the Federal counts in tM h
which are required to provide loans to the States and to pa
the ost of extended benefits and allof the costs of emergenw-
have also been exhausted. Thus, the provisions for borrow
the general revenue of the Treasury have come into play s
the end of fiscal year 1977, the Unemployment Trust Fund
the Treasury an estimated $13.9 billion (including $.8 bill
by the States and $10.1 billion related to the Federal share of
and emergency benefits).


ro
i"





59


H.R. 10210, by raising the net Federal tax rate and the Federal-
State tax base, will increase the revenues of the system. At the same
time, however, the additional coverage provided under I1.. 1021
would increase benefit payments under the system. The net result
under Labor Department estimates would be a reduction in the total
deficit of the system by 1981 from the $13.1 billion project under
current law to $8 billion under H.R. 10210. Of this total $5.1 billion
reduction in the projected deficit of the systxem, $4.9 billion is related
to an improvement in the status of the Federal trust fund accounts.
The following charts and tables present additional detail concern-
ing the overall impact of H.R. 10210 on the coverage and financing
of the Unemployment Compensation programs. The estimates in t hese
materials were prepared by the Department of Labor using the as-
sumptions which are described below.
Assumptins for cost and revenue projections.
(1) Increase in average weekly benefit amount is 5 percent per year.
(2) Increase in total wages is based on covered employment in-
creasing at 2 percent per year and the Consumer Price Index increas-
ing as follows:

Fiscal year-
1977 1978 1979 1980 1981

CP! increase (percent).... 5.6 5.6 5.1 4.1 2.9

(3) The national unemployment rate I is as follows:

Fiscal year-
1977 1978 1979 1980 1981

Unemployment (percent). 7.0 6.4 5.6 5.0 4.9

Assumptions for estimated repayment of State loans.
(1) Repayments by the States do not begin until 1979.
(2 The average tax rate for all States is 2.7 percent.
The additional Federal rates under the loan repayment pro-
visions are 0.3 percent in 1979, 0.6 percent in 1980, and 0.9 percent in
1981.
(4) Consumer Price Index estimates used for projection of total
wages in "key" loan States come from OMB Mid-Sessioa Review of
the 1977 Budget.
(5) The building of trust fund levels is based on the annual com-
putation of revenue less both cost and loan repayments for the fiscal
years 1979-81.
(6) For the fiscal years 1977 and 1978, the addition'to the cumula-
tive balance is 30 percent of the difference between revenue and cost.
(7) Of the eight States which account for 89 percent of current
loans outstanding, two will be at a taxable wage base of $6,000 or
above in 1979 and two will be above $4,200 without I.R. 10210.
1Total unemployment rather than Insured unemployment.








REVENUES AND EXPENDITURES UNDER PRESENT LAW AND H.R. 10210: FISCAL YEARS 1977-811
[Billions]

1977 1978. 1979 1980 1981
Present H.R. Present H.R. Present H.R. Present H.R. Present H.R.
Revenues law 10210 law 10210 law 10210 law 10210 law 10210

Revenues ........... 9.8 10.1 10.7 12.0 10.8 14.1 11.1 15.4 11.8 16.3
State taxes............. 8.2 8.2 9.0 9.6 9.1 11.1 9.3 12.3 10.0 13.2
Federal taxes ........... 1.6 1.9 1.7 2.4 1.7 3.0 1.8 3.1 1.8 3.1
Expenditures ....... 14.3 14.3 11.6 12.0 9.6 10.3 9.5 10.2 10.3 11.0
Regular benefits... 8.8 8.8 8.5 8.8 7.9 8.3 7.9 8.3 8.6 9.0
Extended/emergency
benefits ............... 4.2 4.2 1.8 1.9 .4 .8 .4 .7 .5 .8
Administrative costs.... 1.3 1.3 1.3 1.3 1.3 1.2 1.2 1.2 1.2 1.2










AMOUNT OWED TO GENERAL FUND OF THE TREASURY BY THE UNEMPLOYMENT TRUST FUND'
[In billions of dollars]

Amount owed as of Sept. 30


T ota l ...............
Attributable to State
loan s .................
Attributable to Federal
responsibilities ......


1976
Present H.R.
law 10210

10.9 10.9


3.2
7.7


3.2


1977
Present H.R.
law 10210

13.9 13.6


3.8


3.8


1978
Present H.R.
law 10210


3.9


3.9


1979
Present H.R.
law 10210


3.8


3.7


1980 1981
Present H.R. Present H.R.
law 10210 law 10210


8.0


3.5


3.4


3.1


2.9


8.2 10.2 6.6 10.0 5.1


14.5 13.5 14.3 11.9 13.7 10.0 13.1


7.7 10.1 9.8 10.6 9.6 10.5






62


ADDITIONAL COVERAGE AND BENEFITS UNDER H.R. 14
(Dollar amounts in millions]

Costs of additional beneft psyn
Employment Fiscal year 1978 FIscal year
Category of employment first covered
by H.R. Federal F
10210 Total sub- Total
thousands ) benefits sidy2 benefits

Agricultural ........... 327 $220 $160 $220
Domestic .............. 264 180 130 180
Nonprofit schools ..... 300 10 8 10
State and local gov-
ernment ............. 8,250 200 190 210

Total .............. 9,141 610 488 620
I Based on projected 1977 employment levels.
2 The Federal subsidy arises from a provision authorizing general rel
reimbursement to the States for benefits paid in fiscal years 1978 and 1
the extent such benefits are based on wages prior to Jan. 1, 1978 (and foi
benefits based on wages during January-June 1978).




























C. Additional Materials Related to Unemployment
Compensation Program









SELECTED UNEMPLOYMENT COMPENSATION STATISTICS, FISCAL YEARS 1974-77


Fiscal year-


Transition
quarter
(estimate)


1977
(estimate)


Labor force (thousands) ....................................... 90,008
Covered employment (millions) (calendar year) ............... 66.7
Total covered wages (millions) (calendar year) ................ $558.2
Total taxable wages (millions) (calendar year) ................ $265.5
FUTA revenue (m illions) ....................................... $1,454
State tax revenue (m illions) ................................... $5,263
Total unemployment rate (percent) ............................ 4.9
Insured unemployment rate (percent) ......................... 3.0


91,876
65.6
$583.8
$280.8
$1,354
$5,299
7.2
5.1


93,597
66.9
$633.9
$295.4
$1,531
$6,404
8.0
4.9


94,800 96,000
.......... 68.3
.......... $685.2
.......... $312.2


$300
$1,400
7.1
4.2


Benefit payments (billions):
R egular U l benefits ........................................
Extended benefits ..........................................
Em ergency benefits ........................................


Item


1974
(actual)


1975
(actual)


1976
(prelim-
inary)


$1,600
$8,200
6.5
4.0


$4.8
.3


$9.8
1.2
.5


$11.1
2.9
3.3


$1.8
.8
.7


$8.8
3.1
1.1














Flow f FTA Yum Under Exin Fe.ra Satte

0.5% Emplye Tax


I


1 EMPLOYMENT SECURITY ADMINISTRATION ACCOUNT (ESRA)
f or ftmurw.ng administrative costs of the employment secu ri ty program (of
the 90% of estimated FUTA collections in a year remaining (after trans-
fer of 10%to 2 ), up to 95% maybe aproprated to fnance Stte admin-
rstratv costs, balance avalale to meet Federal administrative costs)
Statutory limit retained in this account at the beginning of a fiscal year is
40% of apropriation for the prior fisca year


t
Excess if 2
is ovr statutory
limit on June30
of any year


I


Excess if 1
is over statutory
limit on July 1
of any year and
12 is not over its
statutory limit


Excess if 3
is over statutory w e
limit on June 30 Met u
of an year


Iye
k FEDERAL UNEMPLOYMENT ACCOUNT (FVA)
for repayable advances to States with deple

Stttory limit: $560 million, or 0.125% of totlew
ered employment in preceding calendar yea, whidm


Excess if 1 12 and 3) are over statutory limit on July1ofmanyyear

Distribution to State trust fund accounts when all 3 accounts are fully
funded and no outstanding advances from General Revenue to
either FUA or EUCA

*Effctive tax, after 27 percent is offset against 3.2 percent Federal unemployment tax.


I
1/10 ofst col lec
tions I


2 EXTENDED UNEMPLO ET COMPENSATION AC-
COUNT (EUCA) for financing (trgred) extended UC and FSB

Statutory limit: $750 million, or 0125% of total wag in cov-
eredemployment m preceding calendar year. whichever is greater






STATE UNEMPLOYMENT FINANCIAL DATA: CALENDAR YEAR 1975
[Thousands of dollars]
Benefit payments
Reserves
State taxes Interest credited Regular State State share of as of Dec.
State collected to trust fund benefits extended benefits 31, 1975

Total ....................... 5,227,130 380,426 11,754,685 1,249,150 14,351,538
Alabama ......................... 38,372 3,079 147,142 13,382 2)
Alaska ........................... 53,648 3,094 28,709 1,091 75,360
Arizona .......................... 27,002 6,151 109,226 14,205 67,569
Arkansas ........................ 31,804 1,556 90,741 8,037 1,578
California ........................ 802,308 43,835 1,310,136 139,646 545,694 .
Colorado ......................... 14,022 3,856 69,549 5,923 46,505
Connecticut ...................... 140,940 53 298,345 37,521 2
Delaware ......................... 16,931 818 47,681 4,658
District of Columbia ............. 19,461 1,026 56,444 3,639
Florida ........................... 92,512 10,719 307,726 41,460 80,7
Georg.ia .......................... 49,518 19,043 221,524 28,857 268,413
Hawaii ........................... 39,370 485 47,184 4,356 5,378
Idaho ......................... 19,177 2,943 25,792 1,654 53,598
Illinois ........................ 175,645 14,582 673,612 60,971 ( 2
Indiana .......................... 74,553 14,621 244,825 26,977 198f209
See footnotes at end of table.





STATE UNEMPLOYMENT FINANCIAL DATA: CALENDAR YEAR 1975-Continued
[Thousands of dollars]

Benefit payments
Reserves
State taxes Interest credited Regular State State share of as of Dec4
State collected to trust fund benefits extended benefits 31, 1975

Iowa ............................. 33,642 5,157 92,788 7,506 63,215
Kansas .......................... 51,274 7,394 58,074 4,719 135,299
Kentucky ......................... 55,267 9,332 137,816 11,606 137,435
Louisiana ........................ 105,489 7,488 106,540 7,569 141,255
Maine ............................ 29,762 599 53,029 5,302 (2)
Maryland ........................ 60,750 4,886 180,905 15,579 29,849
Massachusetts .................. 269,997 1,628 476,884 49,573
Michigan ........................ 283,801 4,267 835,930 132,475
Minnesota ....................... 84,920 1,034 175,392 17,785 2
Mississippi ....................... 18,435 5,781 57,543 5,301 89,
Missouri ......................... 89,523 9,344 225,707 23,401 94,893
Montana ......................... 12,688 650 24,234 1,873 7689
Nebraska ........................ 18,137 2,313 46,781 4434 28,698
Nevada .......................... 31,285 671 47,354 5Y655 3v856
New Hamsphire.................. 15,333 2,183 44,462 1,819 28,766
w 374,803 41 65147
New Mexico .....................968 39,57,
New Yo1 ........51.............. 15254,189
Not Caroin................... 7529 2351 30r4 2474 342vi31
Nort Dalkota .;........ ... "........ 1 !1p76 1t 117 1100 477 22p633 ,






Ohio .............................. 180,545 28,311 634,241 57,763 294,228
Oklahoma ........................ 33,355 2,480 65,177 6,697 27,164
Oregon ........................... 61,888 3,254 138,851 11,801 23,499
Pennsylvania .................... 401,423 11,098 970v603 62,540 2
Puerto Rico ...................... 76,075 133 1029535 14,212
Rhode Island ........ ....... 64,433 6 88,393 12,142 /2%
South Carolina ................... 31,058 7,907 157,022 14,052 95,073
South Dakota .................... 3,942 1,154 9,424 569 19,509
Tennessee ....................... 76,828 14,018 193,668 18,446 199,720
Texas ............................ 60,257 15,758 175,391 20,200 230,602
Utah ............................. 21,269 2,289 40,573 3,702 32,152
Vermont ......................... 11,472 4 28,446 3,319 (2
Virginia ........................ 15,202 9,700 138,105 9,652 123,49?
Washington ...................... 162,916 118 199,536 20,324 (2 c
West Vriginia ................... 23,578 5,124 60,317 4,599 78,37
Wisconsin ....................... 106,355 12,027 259,864 13,058 120,851
Wyoming......................... 7,859 1,582 6,405 303 30,885
Represents total reserves of the 37 States which had not exhausted their reserves as of Dec. 31, 1976.
2 State has borrowed from Federal accounts to meet benefit obligations.





70


STATE UNEMPLOYMENT: CLAIMS DATA
CALENDAR YEAR


State


Total ........
Alabama ..........
Alaska .............
Arizona ............
Arkansas ..........
California .........
Colorado ..........
Connecticut ......
Delaware ..........
District of Colum-
bia ..............
Florida ............
Georgia ...........
H awaii ............
Idaho ..............
Illin o is ............
Indiana ............
Iow a ...............
Kansas ............
Kentucky ..........
Louisiana ..
M aine .............
Maryland .........
Massachusetts....
M ichigan ..........
M innesota .........
M ississippi ........
M issouri ..........
Montana ..........
Nebraska..........
Nevada ............
New Hampshire...
New Jersey ........
New Mexico .......
New York..........
North Carolina ....
North Dakota......


Number of beneficiaries Average
duratiwi
Average of regular
Total during number benefits
year per week (weeks'

11,160,042 3,991,518 15.7


193,230
26,622
95,477
112,841
1,267,665

53,857
253,264
34,349
35,949
324,456
317,707
41,920
36,805
574,829
282,699
94,589
70,840
160,856
120,044
86,178
168,303
360,395
681,730
175,936
90,482
238,288
29,540
53,958
43,963
67,269
475,986
31,890
883,251
450,229
14,041


58,252
7,035
38,644
41,204
421,433
25,132
83,971
11,366
13,539
129,553
84,198
14,460
11,591
216,752
86,487
29,191
20,711
49,866
43,493
23,223
61,484
155,694
255,339
60,117
29,876
84,527
10,245
16,402
14,002
16,762
178,813
14,734
394,117
114,777
4,879


See footnote at end of table.


FOR
1975







STATE UNEMPLOYMENT: CLAIMS DATA FOR REGULAR PROGRAM:


CALENDAR YEAR


1975-Continued


Number of beneficiary


State


O h io ...............
Oklahoma .........
Oregon .... ......
Pennsylvania......
Puerto Rico .......
Rhode Island......
South Carolina....
South Dakota ......
Tennessee ........
Texas .............
U tah ..............
Verm ont ...........
Virginia ...........
Washington .......
West Virginia......
W isconsin .........
Wyoming ..........


Av
nL
per


Total during
year'

542,357
81,229
149,212
721,903
138,817
78,432
228,049
14,023
237,783
254,475
47,231
24,949
180,987
197,433
82,864
221,436
9,424


es Average
duration
erage of regular
imber benefits
week (weeks)


Percent of
benefici-
aries
exhausting
regular
benefits


15.2
14.8
14.8
18.2
17.7
17.6
11.5
12.5
14.5
13.3
14.0
18.1
11.9
15.9
12.7
15.7
10.6


32.3
47.4
28.9
29.0
67.0
44.7
25.9
30.2
34.1
47.3
36.6
36.8
27.7
41.3
22.5
29.2
31.3


I Based on number of "first weeks" claimed during year. This tends to understate
the number of beneficiaries since it does not include those who came on the bene-
fit rolls in the preceding year.


189,250
29,134
54,704
285,216
73,661
29,954
60,556
4,573
85,665
81,433

16,069
10,750
47,801
83,768
25,813
89,020
2,278





72


FEDERAL-STATE EXTENDED BENEFIT P
CALENDAR YEAR 1975


Total number
of beneficiaires
during year I


State


Total...
Alabama.....
Alaska.......
Arizona ......
Arkansas.....
California....
Colorado.....
Connecticut..
Delaware.....
District of Col
Florida .......


3,891,374
50,673
3,781
40,030
30,829
458,474


22,257
87,817
12,921
14,476
175,348
130,002
12,209
9,445
199,407
123,289


Georgia..
Hawaii...
Idaho ....
Illinois...
Indiana...


Iow a .............
Kansas ..........
Kentucky ........
Louisiana .......
M aine ...........
Maryland........
Massachusetts..
Michigan ........
Minnesota.......
Mississippi......
M issouri ........
Montana........
Nebraska........
Nevada ..........
New Hampshire.
New Jersey......
New Mexico .....
New York ........
North Carolina..
North Dakota....


See footnote at end of table.


............
. . . . . . .
. . . . . . .
* ...........
............


................ -
. . . . . . . . . .
. . . . . . . . . .
um bia, .............
...................


.............
. . . . . . .
. . . . . . .
.............
.............
.............
. . . . . . .
. . . . . . .
. . . . . . .
.............
. . . . . . .
. . . . . . .
.............
. . . . . . .
. . . . . . .
. . . . . . .
. . . . . . .
. . . . . . .
. . . . . . .





73


FEDERAL-STATE EXTENDED
CALENDAR YEAR


BENEFIT PROGRAM
1975--Continued


Total number
of beneficiaires
_State during year'


Total benefit
payments
(thousands)


O hio ............
Oklahoma ......
Oregon ......
Pennsylvania...
Puerto Rico ....


Rhode Island........ .....
South Carolina ..................
South Dakota ....................
Tennessee ......................
T exa s ...........................
U ta h ............................
Verm ont .........................
V irg in ia .........................
W ashington....................
W est Virginia ....................

W isconsin .......................
W yom ing ........................


147,347
28,860
39,165
211,508
85,586
38,470
40,175
3,247
87,512
102,750
10,862
10,138
32,396
78,141
17p956

27,603
666


119,065
13,757
23,603
159,443
28,357
24,619
27,104
1,171
36,892
40,417
7,677
7,321
19,304
44,516
11,272

33,095
616


1 Based on number of "first weeks" claimed during year. This tends to understate
the number of beneficiaries since it does not include those who came on the benefit
rolls in the preceding year.


DATA:





74


EMERGENCY UNEMPLOYMENT COMPENSATION
DATA: CALENDAR YEAR 1975


Benefici-
aries
during year I


Total benefit
payments
(thousands)


2,764,215


$2,246,588


Alabama ......
Alaska..
Arizona .......
Arkansas ......
California.....
Colorado ......
Connecticut...
Delaware......
District of Colu
Florida .......


mbia.


Georgia ....
Hawaii .....
Idaho .......
Illinois.....
Indiana .....
Iowa ........
Kansas.....
Kentucky...
Louisiana..
Maine ......


M aryland ................
Massachusetts ..........
M ichigan................
Minnesota ..............
M ississippi ..............
M issouri ................
M ontana .... ...........
Nebraska ................
N evada ..................
New Hampshire .........
New Jersey ..............
New Mexico .............
New York ................
North Carolina ..........
North Dakota ............
See footnote at end of table.


25,681
1,549
25,089
17,152
350,267
9,055
48,686
5,972
12,638
107,064
71,868
5,999
4,197
94,117
53,279
20,267
9,383
20,485
18,187
20,345
23,383
225,727
243,235
33,453
14,211
45,917
5,182
7,651
10,302
787
184,968
4,759
354,087
34,519
734


18,727
1,770
13,815
10,203
203,080
6,530
28,897
3,909
16,398
47,820
48,937
7,837
1,974
57,662
41,448
9,434
5,701
14,840
11,034
8,202
14,173
222,077
220,244
25,776
6,276
35,293
2,352
5,568
9,121
534
196,922
3,044
424,116
28,808
336


Totals .............


. ...... .. .... -,-, "",





75


EMERGENCY UNEMPLOYMENT COMPENSATION ACT OF


DATA: CALENDAR


YEAR 1975-Continued


Benefici-
aries
during yearI


O hio ..................... 80,530
Oklahoma ............... 14,193
Oregon ................. 22,746
Pennsylvania ............ 132,094
Rhode Island ............ 67,714
South Carolina .......... 25,608
South Dakota ............ 1,747
Tennessee .............. 44,460
Texas ................... 45,401
Utah .................... 8,707
Vermont ................. 7,937
Virginia ................. 1,334
Washington ............. 89,255
West Virginia ............ 8,000
W isconsin ............... 38,411
Wyoming ................ 389
Puerto Rico ............. 65,494


Total benefit
payments
(thousands)

$73,054
11,133
18,071
122,293
55,615
14,698
835
25,487
35,961
6,179
6,213
9,120
64,766
5,008
22,940
150
22,204


Number
exhausting
benefits

14,888
4,260
10,110
38,410
63,806
15,889
971
18,936
17,291
4,288
4,365
43
51,855
1,221
12,105
3
33,265


I Based on number of "first weeks" claimed during year.


1974







Benefit Payments

State U!1 Programs [Excludes SUAJ
Regular, Extended and Federal Supplemental Benefits
Current Law
Billions of Dollars
18 17.3 Emergency Benefits
[FSBj [Temporary]

161 3.3Extnded Senef Ite

14
13.0 Regular Benef its
12 1.

10


81

6

433

2

01
1974 1975 1976 T.*1977 1978 1979 1960 1931
FlecAl Years
Based on 7/116 Unemployment Asumptions mlyw n riigAmnsrto
*TanitonlQure nmlyot nuac ovc


August9, 1







Benefit Payments
State UI Programs [Excludes SUA]
Regular, Extended and Federal Supplemental Benefits
Under HR 10210, U.C. Amendments of 1976, as passed by the House, 7/20/76


Billions of Dollars
18 r17.3


1974 1975 1976


Based on 7115176 Unemployment Assumptions
*Transitional Quarter


I Emergency Benefits
[FSB][Temporary]


1977
Fiscal Years


1978


1979


1980


US. Department of Labor
Employment and Training Administration
Unemployment Insurance Service
August 9. 1976


Staff note: SUA (special unemployment assistance) is a temporary general fund program of benefits for unemployed persons not cov-
ered by the regular unemployment compensation programs, PSB (Federal supplemental benefits) is the popular name given by the
l)epartment of Labor to the program established by the Emergency Unemployment Compensation Act of 1974.


1981







STATE INITIAL CLAIMS
THo..-- Fiscal Year 1976 - -
I.wI I I I I --- I A
Weekly Totals Unadjusted Volumes











71oo no
Ie a a 1 .


517V3




JULY A1XSP. OC. N DC. AN EL MA. ARgAY JNsUY L ET
mI ml

--*US r' .




4g 460 .iii l ~ |I|iIiiii. 1iiJ.Iiii 1I|
3m 2W

si uawasB O i sup~lI B4 nutl 7t4 S OMIS irn II M 3WII2U MI? Z4fl







STATE INSURED UNEMPLOYMENT
THOUSAND. Fiscal Year 1976 THOUSANDS
M w -.- I i I i I I -- 10.0

Weekly Totals Unadjusted Volumes
3oo geao





700- 7.00








4,000 0, 4.000







.0M I I I I h I I I I I I I3 I I I I I I I I I I I I I I III I I I 1 1 1 1 11 11 1I 111 1 1,000
1 12t6262 61S2330 613 2027 4111825 1 8 15222 9132027 310172431 7 14 212613 2027 3101724 1 8 1622" 5 121926 310172431 7142124111826
JULY AUG. SEPT. OCT. NOV. DEC JAN. FEB. MAR. AP. MAY JUNE JULY AUG. SEPT.










INSURED UNEMPLOYMENT, EXTENDED BENEFITS
HOS Calendar Years 1975 and 1976

1 0I I I I 1 "
Weekly Totals Unadjusted Volumes


Ia00 [ c.y. 107s M5
sou~nsusool CY. 1976


1.400 1.400




1,200 -1.m









,! %, m.0









as -

40 400




200U?2U1u3~?R W~U~V M1V1E1WnSUW~VU







UNEMPLOYMENT: 1960-75
[Rates in percent]
National unemployment rate


1960.
1961.
1962.
1963.
1964.
1965.
1966.
1967.
1968.
1969.
1970.
1971.
1972.
1973.
1974.
1975.


Total


Insured


5.5
6.7
5.5
5.7
5.2
4.5
3.8
3.8
3.6
3.5
4.9
5.9
5.6
4.9
5.6
8.5


Note: The insured unemployment rate represents the average weekly number of
insured unemployed as a percentage of the average number of persons in covered
employment.


Year


4.7
5.7
4.3
4.3
3.7
2.9
2.2
2.5
2.2
2.1
3.5
4.1
3.3
2.7
3.7
6.4









SIGNIFICANT PROVISIONS OF STATE UNEMPLOYMENT INSURANCE LAWS, AUG. 15, 1976


Benefits


State


Alabama ............


Alaska ..............






Arizona .............

Arkansas ...........


Qualifying
wage or
employ-
ment
(number X
wba or as
indicated) a

lXhqw;
not less
than
$522.
$750; $100
outside
HQ.




lAXhqw;
$375 in
HQ.
30; wages
in2
quarters.


Duration


Waiting
week 3


Computa-
tion of wba
(fraction
of hqw or
as indi-
cated) I s


Wba for total
unemployment 4
Minimum Maximum


0 .......... .......... $15 ....... $90 .......


1.........







1........


California ........... $750........ 1 ..........


2.3-1.1
percent
of annual
wages,
plus
$10 per
depend-
ent up to
$30.
i5... -..

34,up to
6H~
percent
of State
aww.
4i- i I ......


18-23..... 90-120...


Earnings
disre-
garded'


$6. ... ...


Greater
Of $10
or
basic
wba.


Propor-
tion of
base-
period
wages$


v..... ..


in 52-week period Coverage:
- Size of
Benefit weeks for firm (1
total unemploy- worker in
ment 7 specified
time and/
Mini- Maxi- or size of
mum I mum payroll) 11


Taxes: 1975 Tax
rates (percent of
wages)'
Mini- Maxi.
mum mum


11+.... 26...... 20 weeks. 0.5 .... 2.7.'


34-31 ... 14...... 28 ...... Any time.. 1.6'.... 4.1.


15.......85 .......$15...... 12+.... 26...... 20 weeks,.1 ....... 2.9.

15....... 100 ....... h ......... ......... 10 ...... 26 ...... 10 days... .. 4.2.


12t


Colorado ............ 30 .......... 1 ..........


26T.... Over
$100 in
any
quarter.
26 ...... 20 weeks.


30....... 104 ....... $18 ....... 3 .........


1.71 .... 4.1.9







Connecticut ........ 40 .......... 0 .......... i, up to 15-20..... 110-165.. % wages.. ......... 26 .....267 ......do...... 1.5 .... 6.0.'
60 per-
cent of
State aww
plus $5
per de-
pendent
upto0 1/2
Wga.
Delaware .......... 36 ......... 0 ......... n, up to 20 ........ 125 ...... Greater 26Xwba 17 ...... 26 ....... do ...... 1.3 ..... 4.2.
60 per- of $10 or 50
cent of or 30 percent
State percent of bpw.
aww.14 of wba.
District of 11 Xhqw; 1 .......... .3 up to 13-14 ..... 139 ..... wba .... 2 ......... 17+.... 34 ...... Any time.. 2.5 .... 2.7.
Columbia. not less 66. .
than percent
$450; of State
$300 in 1 aww plus
quarter. $1 per
depend-
ent up to
$3.
Florida ............. 20 weeks ............. claim- 10 ........ 82 ....... $5 ........ M weeks 10 ...... 26 ...... 20 weeks.. ..... 4.5.
employ- ant's employ-
ment at aww. ment.
average C
of $26 or
more.
Georgia ............ 1 Xhqw... 12 ......... splus$1.. 27 ........ 90 ........ $8....... ......... 9 ....... 26 ........ do....... 080.. 3.36.'
Hawaii ............. 30 14 l e....... supto 5 .......... 112 ....... 2 ......... Uniform .. 26T .. 26 T .... Any 3.0 0 3.0.0
weeks 66% time.1
employ- percent
ment. of State
aww.
Idaho............. 14X hqw; 1 ......... YJ up to 17 ........ 99 ........ wba.... Weighted 10 ...... 26 ...... 20 weeks 1.1' .s 4.7.'
not less 60 per- sched- or $300
than cent of ule of in any
$520.01; State bpw in quarter.
$416.01 aww. rela-
in 1 tion to
quarter; hqw.
wages in
2 quar-
ters.
Illinois............+ 1,000; 1 ........ claimant 15 ........ 106-135.. $7 ........ Uniform . 26. 26. . 20 weeks .1 ... 4.0.
$275 aww up
outside to 50
HQ. percent
of State
aww. 13
See footnotes at end of table.










SIGNIFICANT PROVISIONS OF STATE UNEMPLOYMENT INSURANCE LAWS, AUG. 15, 1976-Continued


Benefits


Qualifying
wage or
employ-
ment
(number X
wba or as
indicated) I


State


Duration


Waiting
week 2


Computa-
tion of wba
(fraction
of hqw or
as indi-
cated) 1 3


Wba for total
unemployment 4
Minimum Maximum


Earnings
disre-
garded G


Propor-
tion of
base-
period
wages $


in 52-week period Coverage:
Size of
Benefit weeks for firm (1
total unem ploy- worker in
ment' specified
time and
Mini- Maxi- or size o
mum mum payroll) is


Taxes: 1975 Tax
rates (percent of
wages)'
Mini- Maxi-
mum mum


Indiana .............







Iowa ................


liXhqw;
not less
than
$500-
$300 'in
last 2
quarters.



$600; $400
in 1
quarter
and $200
in
another.
30; wages
in2
quarters.


..........








0 ..........


Mj up to
$69.3







jo up to
6641
percent
of State
aww.


$35.....


10........


$69-$115. Greater
of $3 or
20
percent
of wba
from
other
than
BP
em-
1 ployer.
116 ....... $15+ j
wages.


j......... 4+ ...... 26 ..... 20 weeks. 0.08..... 3.1.








3i......... 10 ...... 39........ do ...... 0 '...... 4.0.







Maine ............ $900;$250 0 ......... 4 supto 12-17. 79-119... $10...... ...... 11+-25. 26....... do..... 2.4...... 5.0.
in each 52 per-
of 2 cent of
quarters. State
aww+$5
per de-
pendent
to i
wba.
Maryland ......... 1Xhqw; 0 ........ 4+$3 10-13 ..... 894 ...... $10...... Uniform.. 26...... 26 .....Anytime .7 ....... 3.6.
$192.01 per de-
in 1 pendent
quarter; up to
wages in $12.
2 quar-
ters.
Massachusetts ..... $1,200 .....1........ i-i6 up 14-20..... 101-152.. $10...... 36 per- 9+-30.. 30..... 13 weeks. 3.9...... 5.1.
to 57.5 cent.
percent
of State
aww,
+$6 per
depend-
ent up to
4 wba.3
Michigan.......... 14 weeks 0 .......... 60 percent 16-184... 97-136... Up to 4 weeks 11 ...... 26 ...... 20 weeks .7 ..... 6.6.'
employ- of claim- wba.6 employ- or
ment at ant's aww ment. $1,000
$25.01 up to $97 in cal-
or more. with endar
variable year.
maximum
for claim-
ants with
depend-
ent.3
Minnesota ........ 18 weeks 1 0...... (13)............. 18 ........ 113 ...... $25 ....... io 13 ...... 26 ...... 20 .9 .. 5.0.'
employ- weeks weeks."t
ment at employ-
$30 or ment.
more.
Mississippi ....... 36; $160 1 ......... ........... 10 .......80..... $5.. ......... 12...... 26 ..... do.. ...... 2.7.
in 1
quarter;
wages in
2 quar-
ters.
See footnotes at end of table.









SIGNIFICANT PROVISIONS OF STATE UNEMPLOYMENT INSURANCE LAWS, AUG. 15, 1976-Continued


Benefits


Qualifying
wage or
employ-
ment
(number X
woa or as
indicated) I


State


Waiting
week 2


Computa-
tion of wba
(fraction
of hqw or
as indi-
cated)t 3


Wba for total
unemployment 4
Minimum Maximum


Earnings
disre-
garded


Duration in 52-week period Coverage:
Size of
Benefit weeks for firm (1 Taxes: 1975 Tax
Propor- total unemploy- worker in rates (percent of
tion of ment specified wages)'
base- time and/
period Mini- Maxi- or size of Mini- Maxi-
wages' mum I mum payroll) 18 mum mum


Missouri ............



Montana ............




Nebraska ...........


Nevada .............


30Xwba;
$300 in 1
quarter;
wages in
quar-
ers.
13Xwba
Outside
HQ.


$600; $200
in each
of 2
quarters.
l,4Xhqw...


1 10 ........ W~i .......... $15 ....... $85 ....... $10 ....... 34 ......... 8-13+.. 26 ...... 20 weeks. 0 ...... 3.6.0


1 I........


346 up to
60 per-
cent of
State
aww.


I .......... ; 1- i3 ......


0 ..........


345, up to
5 per.
cent of
State
aww.
2.3-1.2


12 ...... 94 ....... (1) .......... ()........... 13 ..... 26 ...... Over
$500 in
current
or pre-
ceding
year.
12 ........ 80 ........ Upto 4 4 ......... 17 ...... 26...... 20 weeks


wba.'


16 ........ 94........ yj wages.. i ..........


11 ...... 26 ...... $225 in
any
quarter.


1.1 0.... 3.1.'



.1 ...... 2.7.


.6 # ...... 3.0.0






New Mexico ........ 1% X hgw I ......... M6 not less 16 ........ 78 ........... wba.... h ....... 18+.... 30 ....... 20 weeks. .6 ...... 3.6.
than or $450
10 per- in any
cent nor quarter.
more
than 50
percent
of State
aww.
New York ........... 20 weeks 1 232.......67-50 per- 20 ........ 95 ........ (1)........ Uniform.. 26...... 26 ......$300 in 1.3 ...... 5.0.
employ- cent of any
ment at claim- quarter.
average ant's
of $30 or aww.
more.t
North Carolina...... l Xhqw; 0 io up to 15........105 ....... jwba.... h bpw.... 13...... 26. 20 weeks .2 ......4.7.
not less (through 66 per-
than eb 15, cent of
$565.50; 1977). State
$150 in 1 aww.
quarter.
North Dakota...... 40; wages 1......... up to 15 ........ 107 ....... Y2wba.... (6) ......... 18 ......26....... do.......9 ......4.2.
in 2 67 per-
quarters. cent of
State
aww.
Ohio.............. 20 weeks 1 to......... claim- 10-16..... 95-150... wba.... 20X 20 ...... 26 ......... do ....... 1 ....... 3.8.
employ- ant's wba+
ment at aww+ wba for
$20 or d.a. of each
more. $1-$55 credit
based on week in
claim- excess
ant's of 20.
aww and
number
of de-
pend-
ents. 31
South Carolina 1Xhqw; 1 .... ei up to 10_....... 103 ....... 4 wba .... .......... 10...... 26 ......20 weeks. .25 4.1.
not less 66i per-
than cent of
$300; State
$180 in 1 aww.
quarter.
Oklahoma1.... 12Xhqw; 1........ .3 up to 16.....93.........$7. 10+.... 26 ...... do., 4. 2 7.
not less 55 per-
than cent of
$500 in State
BP; aww
$4,200

See footnotes at end of table.










SIGNIFICANT PROVISIONS OF STATE UNEMPLOYMENT INSURANCE LAWS, AUG. 15, 1976-Continued


Benefits
Qualifying Duration in 52-week period Coverage:
ulnSize of
wage or Computa- Benefit weeks for firm (I Taxes: 1975 Ta)I
employ- tion of wba Propor- total unemplo- worker in rates (prcentof
ment (fraction Wba for total tion of ment specified wages
number X of hqw or unemployment 4 Earnings base- time and/
wba or as Waiting as indi- disre- period Mini- Maxi- or size of Mini- Maxi-
State indicated) t week 2 cated) I I Minimum Maximum garded 6 wages$ mum I mum payroll) If mum mum

Oregon ............. I8weeks 1 .......... 1.25 per- $28 ....... $102 ...... wba.... X ......... 9-26.... 26 ...... 18 weeks 1.224s.. 2.856.9
employ- cent of or $225
ment at bpw up in any
aver age to 55 quarter.
of $20 or percent
more; of State
not less aww.
than
$700.
Pennsylvania.... 32+-36; 0 ......... up $13-18... $125-133. Greater Uniform.. 30 ...... 30...... Any time., 1.0 ...... 4.0.
$120 in to66% of $6
HQ; at percent or40
least 20 of State percent
percent aww+ wba.
of bpw $5 for 1
outside depend-
HQ. ent; $3
for 2d.
Puerto Rico........ 21+30; 1 ......... up 7....... 60........ Wba.. ...do ......... .. 20do.. 295.... 3.45.
not less to u 6
than p ent
wage in







Rhode Island ....... 20 weeks 1 '........ 55 percent 26-31 ..... 100-120.. $5 ........ i weeks 12 ...... 26.......do...... 3.2.. 5.0.'
employ- ofclaim- employ- d "."
ment at ant's aww ment.
$46 or up to 60
more; or percent
$2,760. of State
aww, +
$5 per
depend-
entup to
$20.
South Dakota ....... $400 in 1........ upt 19 .......89 ........ wages 3 ......... 10+.... 26 ......... do ...... 0... ...2.7.
HQ: 1OX 62 per- up to
wba cent of wba.
outside State
HQ. aww.
Tennessee ......... 36; 1 ......... ,t .......... 14 ....... 85 ..... $20....... ........12 .....26 .......do...... .. ...... 4.0.
$338.01
in 1
quarter.
Texas ............... lYXhqw; 1 '0 ..... 4 .......... 15 ......... 63 ........ Greater 27 per- 9 ...... 26 ......... do ....... 1 ....... 4.0.
not less of $5 cent.
than or
$500 or wba.
3j FICA
tax base.
Utah ............... 19weeks 1 ......... upto 10 ....... 110 ....... Lesserof Weighted 10-22... 36 ...... $140in 1.4' .... 2.7.'
employ- 65 per- $12 or sched- CQ in
ment at cent of % wba ule of current
$20 or State from bpw in or pre-
more; aww. other rela- ceding
not less than tion to calen-
than regular hqw. dar
$700. em- year.
ployer.
Vermont.......... 20 weeks 1 ......... claim- 15 ........ 96....... $15+$3 Uniform.. 26...... 26 ...... 20 weeks. 1.0 ..,. 5.0.
employ- ant's aww for
ment at for high- each
$30 or est 20 depend-
more. weeks up entup
to 60 to $15.
percent
of State
aww.
Virginia ........... 36; wages 1 t0.. 20 ........ 103 ....... Greater ......... 12...... 26.........do...... 05 .... 2.7.
in 2 of 4
quarters. wba or
$10.
See footnotes at end of table.









SIGNIFICANT PROVISIONS OF STATE UNEMPLOYMENT INSURANCE LAWS, AUG. 15, 1976-Continued


Benefits
Duration in 52-week period Coverage:
Qualifying Size of
wage or Computa- Benefit weeks for firm (1 Taxes: 1975 Tax
employ- tion of wba Propor- total unemploy- worker in rates (percent of
ment (fraction Wba for total tion of ment specified wages)
(number X of hqw or unemployment 4 Earnings base- time and/
wba or as Waiting as indi- disre- period Mini- Maxi- or size of Mini- Maxi-
State indicated) I week 2 cated) 1 3 Minimum Maximum garded I wages s mum S mum payroll) IS mum mum

Washington ......... $1.55015.... 1 ........ J5 of hw $17....... $102 ...... $5+ ......... 8+23+. 30 ....... Anytime.. 3.0 I... 3.0.
up to 0 wages.
percent
of State
aww.
West Virginia ....... $700 ....... I ........ 1.9-0.8 14 ....... 128 ...... $25 ....... Uniform .. 26...... 26...... 20 weeks. 0 ........ 3.3.
percent
of annual
wages
up to
66 i
percent
of State
aww.
Wisconsin .......... 17 weeks 10 1 ....... 50percent 23 ....... 122 ...... Upto 6 "o weeks 1-13+,. 34 ...... 20 weeks, 0 ...... '4.7.
employ- of claim- wba.' employ-
ment; ant's aww ment,
average up to 66 j
of $4401 percent
or more of State
with 1 aww.
employer.
Wyomng .......... 20 weeks 1 .......... 3i up to 50 10 ....... 95 ....... $10 ...... ..... 11-24... 26...... $500 in 0.79.... 3.49.
employ percent current
ment with of State
20 hours aww.
en eachn
+80in year








I Weekly benefit amount abbreviated in columns and footnotes as wba; gram and up to 26 additional weeks under the Federal supplemental benefits
base period, BP; base-period wages, bpw; high quarter, HQ; high-quarter program.
wages, hqw; average weekly wage, aww; benefit year, BY; calendar quarter, 8 For claimants with minimum qualifying wages and minimum wba. when
CQ;. calendar year, CY; dependent, dep.; dependents allowances, da.; two amounts shown, range of duration applies to claimants with minimum
minimum, mm.; maximum, max. qualifying wages in BP; longer duration applies with minimum wba; shorter
2 Unless otherwise noted, waiting period same for total or partial un- duration applies with maximum possible concentration of wages in HQ,;
employment. New York, 2-4 weeks; West Virginia, no waiting period required therefore highest wba possible for such BP earnings. Wisconsin determines
for partial unemployment. No partial benefits paid in Montana but earnings entitlement separately for each employer. Lower end of range applies to
not exceeding twice the wba and work in excess of 12 hours in any 1 week claimants with only 1 week of work at qualifying wage; upper end to claimants
disregarding for total unemployment. Waiting period may be suspended if with 17 weeks or more of such wages.
Governor declares state of emergency following disaster, New York, Rhode 9 Represents minimum-maximum rates assigned employers in Calendar
Island. In Georgia no waiting week if claimant unemployed not through own Year 1975. Alabama, Alaska, New Jersey require employee taxes. Contri.
fault. butions required on wages up to $4,200 in all States except Missouri,
3 When States use weighted high-quarter, annual-wage, or average weekly- $4,500; Alabama, Montana, Rhode Island, $4,800; Michigan, New Jersey,
wage formula, approximate fractions or percentages figured at midpoint of $5,400; Connecticut, Georgia, Iowa, Utah, Wisconsin, $6,000; Nevada,
lowestand highest normal wage brackets. When da provided, fraction applies $6,100; Minnesota, $6,200; California, Oregon, $7,000; Washington,
to basic wba. In States noted variable amounts above max. basic benefits $7,200; Hawaii, Idaho, $7,800; Alaska, $10,000.
limited to claimants with specified number of dependents and earnings in 10 Waiting period compensable if claimant entitled to 12 consecutive
excess of amounts applicable to max. basic wba. In Indiana da. paid only to weeks of benefits immediately following, Hawaii; unemployed at least 6
claimants with earnings in excess of that needed to qualify for basic wba and weeks and not disqualified, Louisiana; after 9 consecutive weeks benefits
who have 1-4 dependents. In Michigan and Ohio claimants may be eligible paid, Missouri; when benefits are payable for third week following waiting
for augmented amount at all benefit levels but benefit amounts above basic period, New Jersey; after benefits paid 4 weeks, Texas, Virginia; after any
max. available onlyto claimants in dependency classeswhose aww are higher 4 weeks in BY, Minnesota; after 3dweek unemployment, Illinois; after 3d
than that required for max. basic benefit. In Massachusetts for claimant with week of total unemployment, Ohio; after 1 week, Wisconsin.
aww in excess of $66 wba computed at 1/52 of 2 highest quarters of earnings 11 Or 15 weeks in last year and 40 weeks in last 2 years of aww of 30 or
or 1/26 of highest quarter if claimant had no more than 2 quarters work. more, New York.
4 When 2 amounts given, higher includes da. Higher for min. wba includes 12 For New York, waiting period is 4 effective days accumulated in 1-4
max. allowance for one dep.; Michiqan for 1 dependentchild or 2 dependents weeks; partial benefits 1/4 wba for each 1 to 3 effective days. Effective days:
other than a child. In the District of Columbia and Maryland, same max. with fourth and each subsequent day of total unemployment in week for which
or without dependents. not more than $95 is paid.
5 In computing wba for partial unemployment, in States noted full wba paid 13 To 60 percent State aww if claimant has nonworking spouse; 66-2/3
if earnings are less than 1/2 wba; 1/2wba if earnings are 1/2 wba but less percent if he had dependent child, Illinois; 60 percent of first $85, 40 per-
than wba. cent of next $85, 50 percent of balance up to $105, Minnesota.
6 With exception of Montana and North Dakota, States noted have weighted 14 July 1, 1977, 63 percent, July 1, 1978, 66-2/3 percent, Delaware Sept. 1,
schedule with percent of benefits based on bottom of lowest and highest 1976, 66-2/3 percent, Louisiana.
wage brackets. In Montana, duration is 13, 20, and 26 weeks, depending on IS In addition to total wages of $1,550, claimant also must have either/(1
quarters of employment; in North Dakota, 18, 22, and 26 weeks, depending 16 weeks of employment with wages of 15 percent of average wage or 2
on amount of BP earnings. 600 hours of employment.
7 Benefits extended under State program when unemployment in State 16 $1,500 in any Calendar Quarter in current or preceding Calendar Year
reaches specified levels: California, Hawaii, by 50 percent; Connecticut by 13 unless otherwise specified.
weeks. In Puerto Rico benefits extended by 32 weeks in certain industries, 17 Also covers employers of 20 or more aqricultural workers in 20 weeks,
occupations or establishments when special unemployment situation exists. Hawaii; covers 4 agricultural workers in 20 weeks, Minnesota.
Benefits also may be extended during periods of high unemployment by 50 Is Maximum amount adjusted annually by same percentage increase as
percent, up to 13 weeks, under Federal-State extended compensation pro- occurs in State aww.







































D. Appendices


75-762 0 76 7














APPENDIX A.-CONSTITUTIONALITY OF STATE AND
LOCAL COVERAGE: LABOR DEPARTMENT OPINION

U.S. I)EPARTM ENT OF LAOjR,
OICE OF TIlE SOLICITOR,
Vashington D.C., June 28, 19)76.
MEMORANDUM OF LAW

THE CONSTITUTIONALITY OF REQUIRING STATE LAW COVERAGE OF STATE
AND .LOCAL GOVERNMENT EMPLOYEES UNDER THE FEDERAL-STATE UN-
EMPLOYMENT COMPENSATION PROGRAMS
The question addressed in this paper is whether the Congress has
the constitutional power to enact a statute requiring the States, as a
condition of continued participation in the Federal-State unemploy-
ment compensation program., to cover employees of State and local
governments. This question is especially pertinent, in light of the deci-
sion of the Supreme Court in National League of Citie8 v. Usery,
U.S. -, June 24, 1976, which struck down the Fair Labor
Standards Act requirements of mandatory coverage of State and local
government employees under that act's minimum wage and overtime
provisions. We conclude that National League of Cities is clearly
distinguishable and that Congress has the power, under the taxing and
general welfare clause of the Constitution, to condition continued par-
ticipation in the Federal-State unemployment compensation program
on unemployment compensation coverage of State and local govern-
ment employees.
BACKGROUND
The basic structure of the Federal-State unemployment compensa-
tiofn program has remained unchanged since the enactment of the
Social Security Act on August 14, 1935. In title IX of that act a pay-
roll tax of 3 percent was laid on private sector emploveis. A credit
of up to 90 percent of the tax. or 2.7 percent, was allowable for con-
tributions paid into a State unemployment fund, under a State unem-
ployment compensation law found to meet the conditions for approval
set out in title IX. A State which had an approved unemployment
compensation law could apply. under title III of the act. for grants
of funds to assist the State in the administration of its law: the pay-
ment of such (,rants would be certified upon a finding that the State
law contained the further provisions reniired by title ITT. The pro-
visions on grants remained in title III of the Social Security Act. 42
U.S.C. 501 et sen., while the taxin" provsIons are in the Federal
Unemlovment Tax Act, chapter 23 of the Internal Revenue Code
of 1954. 26 U.S.C.. 3301 et seq. The requirements for State unem-
plovment compensation laws are set out in 42 U.S.C. '03(a) and 26
U.S.C. 3304(a), respectively.
(95)





96


For the first 37 years of this cooperative program no pr
the Federal statutes required the State laws to covers
class of employees in either the public or private sector. h
or persuasion of State law coverage was founded on the
in the Federal Unemployment Tax Act. Credit
tax was based on contributions into a State unenplo
the same payroll, and coverage of the State law was a
roll subject to contributions. In this way State law coverage
sensation purposes was generally as broad as the tax
Federal Unemployment Tax Act, although the Sttes r
authority to adopt more restrictive coverage or expand co,
yond the inducement provided by the Federal law.
In the employment security amendments of 1970 (Publii
373), Congress amended section 3304(a) of the Federal T
ment Tax Act to add new requirements for approved State i
ment compensation laws. Among the new requirements w
3304(a) (6) (A). which required State laws to cover for cmi
purposes employees of nonprofit organizations and emplove4
hospitals and institutions of higher education. Another ne
ment, added to section 3304(a) (12), required States to pen
cal subdivisions of the States to elect coverage for corn
poses of employees of hospitals and institutions of higher
operated by the political subdivisions. These were the firi
requirements to be contained in the Federal Unempiye
and were requirements for State laws beginning in 1972. ExI
coverage to those three classes of employees was T
making the coverage a State law requirement instead of I
States and localities; the employment of those three clau
ployees still remains excepted from Federal tax coverage.
Now before Congress is H.R. 10210, which in section I
further amend the Federal Unemployment Tax Act so as 1
extend public employee coverage to most employees of State
governments.
Related to those amendments is a change in section 3021
Social Security Act, 42 U.S.C. 502(a). Section 302(a)
amended to exclude from grants to the States any sums to
of administration of the State laws which are associated
coverage of the State and local government employees. Ai
lated amendment is to the Federal-State Extended Uner
Compensation Act of 1970 (title II of Public Law 91-373),
to which State unemployment funds are reimbursed fror
funds for one-half the cost of compensation paid by the St
is sharable extended compensation or sharable regular coi
within the meaning of that act. As so amended, shamble coni
would not include any compensation paid on the basis of St.
government employee coverage. The reason for withdru
financial support of grants and sharable compensation
ments with respect to State and local government employci
is that neither the States nor the localities contribute to th
from which the financial support is drawn. Under title I
Social Securit- Act, 42 U.S.C. 1101 et seq., a permanent,
appropriation is made to the unemployment trust fund, me
the collections under the Federal Unemployment Tax Act,