Congress has approved another six-month extension of federal unemployment benefits retroactive to June 1, 2010. It is designed to help the millions of jobless whose federal checks stopped at the end of May.   Under the latest federal UC benefits extension:

  • The period in which individuals may file for Federal Emergency Unemployment Compensation (EUC) is extended from weeks beginning before June 2, to weeks beginning before Nov. 30, 2010.
  • The period in which Individuals may claim and be paid EUC is extended from Nov. 6, 2010 to April 30, 2011.
  • The Federal Additional Compensation (FAC), an extra $25 per weekly benefit amount on state and federal unemployment compensation, was not extended and will end with weeks ending beginning after Dec. 7, 2010.
  • The period during which 100% federal reimbursement for weeks of regular federal extended benefit payments is provided would be extended from the week ending after June 2, 2010 to the week ending after December 1, 2010 with the state option to continue the extended period for payments extended from November 6, 2010 to April 30, 2011.

Providing much-needed help those out of work, the extension also adds about $34 billion to the national debt which has soared to $13 trillion.

Lawmakers opposing the extension said they wanted to help the jobless but only if the bill’s price tag could be offset with budget cuts elsewhere—following the president’s “pay-as-you-go” guideline of earlier this year.

Economists disagree over whether extending unemployment benefits actually discourages jobless workers from finding employment. Some studies have shown a measurable relationship between the expansion of unemployment benefits and the duration of an individual’s unemployment.

The U.S. unemployment rate stands at 9.5% and the labor market continues to be weak. In Connecticut, more than 100,000 jobs lost, thousands of business closings and a high volume of unemployment benefits being paid last year combined to cause the state’s Unemployment Compensation Trust Fund to run out.

Connecticut and 40 other states have had to borrow from the federal government to pay benefits. So far, Connecticut has borrowed approximately $500 million of an anticipated total of about $850 million.

The state’s trust fund is sourced completely by employers in Connecticut, who are now paying the maximum in UC taxes and will soon have the additional burden of paying back previously borrowed funds.

The best way to solve the crisis is to do everything possible to create a business environment in which employers are able to retain jobs and expand their workforces.

For more information about unemployment compensation issues, contact CBIA’s Kia Murrell at 860.244.1931 or