President Obama has signed a compromise plan to extend a federal payroll tax cut and expand unemployment benefits through the rest of the year—although it will gradually reduce the maximum number of weeks some individuals can collect in payments.

HR 3630 extends the program ending date from the week ending before March 6 to the week ending before Jan. 2, 2013. It also changes trigger provisions in June, and makes changes in the number of weeks available beginning after Sept. 2, 2012, reducing the potential number of weeks of emergency unemployment compensation (EUC) based on state unemployment compensation rates.

Assuming that Connecticut’s unemployment rate remains at 8.2%, the maximum number of state and federal emergency unemployment compensation weeks is projected to decrease for applicants for federal EUC from 93 to 63 in September.

Contributing employer accounts under state UI law should not be charged for weeks of EUC or any additional of regular federal extended unemployment benefits during these temporary extensions.

System reforms

The negotiated bill also includes several unemployment compensation system reforms that have been favored by the business community.

Among the reforms are those:

  • Allowing states to require drug testing for beneficiaries who lost a job for failing or refusing to take a drug test.
  • Creating national job search requirements for everyone collecting state and federal emergency unemployment compensation benefits.
  • Requiring reemployment eligibility assessments for every long-term unemployed person who begins collecting federal EUC to determine the services and activities they need to return to work.
  • Giving states new flexibility to use UI funds for promoting pro-work initiatives.
  • Allowing up to 10 states to use UI funds to test wage supplement programs in which unemployed individuals are placed in training positions or real jobs supported by unemployment benefits.

For more information, contact CBIA’s Kia Murrell at 860.244.1931 or kia.murrell@cbia.com.