Relates to voluntary separations from work for compelling family reasons and to extended benefits

Summary of provisions

Section 1 of the bill would amend Labor Law 593(1) to confirm that individuals who are voluntarily separated from employment due to compelling family reasons are eligible for UI bene- fits.

Section 2 of the bill would amend Labor Law §§ 593(2) and 596(5) of the Labor Law to provide that individuals who have worked on a part-time basis for the majority of time during their base period shall remain eligible to receive UI benefits if they are available to work a corre- sponding number of hours in new employment, and may not be disqualified from receiving benefits due to their refusal to accept full-time employ- ment.

Section 3 of the bill would make various changes to Labor Law § 601, as follows:

* Labor Law § 601(1) (a) (1) would be amended to expand the definition of "state on indicator" to add an optional "state on indicator" using the State's Total Unemployment Rate (TUR), whenever Congress has appro- priated funds to fully reimburse the benefit costs from the State UI Trust Fund resulting thereunder, as has occurred under ARRA.

* Labor Law § 601(1)(a)(2) would be amended to provide that the defi- nition of "state off indicator" is only applicable if none of the options specified in subparagraph 1 result in an "on" indicator.

* A new Labor Law § 601(1)(a)(4) would be added to provide a definition for the term "rate of total unemployment."

* Labor Law § 601(1)(a)(4) would be amended to extend the eligibility period to include the alternate eligibility period provided for in Section 2005(b) of Public Law 111-5 or other federal law.

* The definitions of "extended benefits" and "regular benefits" in Labor Law § 601 would be amended to conform to definitions found in federal law and to reflect the alternative extended benefits eligibility period set forth in ARRA.

* Labor Law § 601(2)(f) would be amended to conform language setting forth the earnings requirements for UI eligibility contained in UI Reform legislation enacted as Chapter 589 of the Laws of 1998 with federal law.

* Labor Law § 601(3) would be amended to provide for additional benefits during "periods of high unemployment," provided Congress provides for 100% sharing of the benefit costs resulting thereunder.

* Labor Law § 601(4) would be amended to conform the UI benefit charging provisions related to Indian tribes to corresponding language in recent federal legislation covering this topic. This section is also amended to provide that benefit costs for an extended benefit program that are subject to 100% federal sharing shall be charged to the UI general account and credited with such federal payments received in the fund.

* Labor Law § 601(5) would be amended to provide an exclusion authorized by federal law relating to work search requirements for claimants in approved training programs, and to conform state law to federal law provisions related to disqualifying circumstances and the subsequent work requirements for reestablishing eligibility under Labor Law § 593.

Section 4 provides that the bill would become effective immediately.

Existing law

Labor Law § 593(1) provides that a voluntary separation from employment may be deemed to be with good cause if such separation was as a consequence of circumstances directly resulting from the claim- ant being a victim of domestic violence.

Labor Law § 593(2) provides that a claimant shall not be deemed ineligi- ble to receive unemployment benefits as a consequence of refusing to accept employment under certain defined circumstances.

Labor Law § 596(5) provides that a claimant who is unable or unwilling to work usual full-time hours, and customarily works less than the full time hours prevailing in the place of employment, shall register as a short time worker, and the time which such claimant normally works in any calendar week shall be deemed his week of full-time employment.

Labor Law § 601 provides that a state "on indicator" for extended bene- fits may be established only by reference to the State's Insured Unem- ployment Rate (IUR). The federal reimbursement rate for extended bene- fits paid using the IUR trigger is 50%.

Labor Law § 601(1)(a)(4) defines "eligibility period" to mean the period consisting of the weeks within a claimant's benefit year which begin within an extended benefit period until the end of an extended benefit period.

Labor Law § 601(2)(f) provides that, in order to receive extended bene- fits, a claimant must have twenty weeks of full-time employment or remuneration which equals forty times his most recent benefit rate.

Labor Law § 601(4) provides that governmental entities must be charged for 100% of the cost of extended benefits because such entities may not receive any share of the federal reimbursement. This section also provides that extended benefits will generally be charged fifty percent to employer accounts and fifty percent to the UI general account, which latter account will be credited with federal funds received pursuant to the federal-state extended unemployment compensation act.

Prior legislative history

None. This is a new proposal.

Justification

The American Recovery and Reinvestment Act of 2009 (ARRA) contains financial incentives for states to modernize their UI laws to make benefits more widely and equitably available to the unem- ployed. These "UI Modernization" incentives would bring nearly $442.2 million of federal funds to New York in the form of an additional $412.7 million dollars in UI benefit money and an additional $29.5 million in UI administrative costs. One-third of the benefit funds, including the administrative expenses, will come to New York by virtue of the State having provisions which allow an alternative base period for UI eligi- bility. However, in order for the State to qualify for the remaining two thirds of such federal dollars (i..e. $275 million), New York State law must contain at least two out of four alternative provisions related to benefit eligibility.

New York law already arguably meets the UI Modernization requirements relating to part-time work and voluntary separation for compelling fami- ly reasons. The State's eligibility is, however, based upon the Secre- tary of Labor's reading of case law and decisions implementing New York UI law. Given that $275 million of federal funding is at stake, prudence dictates that state law provisions clearly contain language that meets the requirements of ARRA in this regard, so that there is no doubt as to the State's eligibility to receive this funding. The statutory changes regarding both part-time work (Labor Law §§ 596(5) and 593(2)) and voluntary separations due to compelling family reasons (Labor Law Section § 593(1)) set forth in this bill accomplish this goal and have already been approved by the USDOL as meeting the language requirements set forth in ARRA. Therefore, passage of this bill will ensure that $275 million in UI Modernization funds will come to New York in accordance with the provisions of the ARRA. The vast majority of these dollars will go to benefit payments and will help to address a UI Trust Fund short- fall which is expected to be significant over the next year or more.

Other statutory amendments contained in this bill would create an alter- nate trigger for thirteen weeks of additional extended benefits for the State's eligible unemployed based upon the State's TUR. At present, the IUR is New York State's only available trigger. The bill would make the TUR alternative trigger option available to the Commissioner only if the Congress has appropriated funds to pay 100% of the costs of such extended benefits (except for the State, localities and Indian tribes). If such federal funds are not available, and the federal government will reimburse states for the cost of benefits at a 50% reimbursement rate, the extended benefit provisions requiring use of the IUR must be used as the on/off indicator. The Department projects that the IUR is not likely to trigger on this year, so that the period of 100% reimbursement would not likely become effective under the IUR.

In light of this circumstance, federal funds for extended benefits under ARRA in 2009 will likely be available in New York only if the State uses the TUR trigger. The Unemployment Compensation Amendments of 1992 authorized states to add this optional trigger, but New York State did not do so. At the time, the reimbursement rate offered states as an incentive was 50%. Under ARRA, Congress has provided a 100% reimburse- ment rate for extended benefits in states triggering on using the TUR. New York's most recently calculated TUR of 6.6 percent meets this trig- ger threshold.

Currently, over 120,000 New Yorkers are receiving extended benefits under the existing 2008 Emergency Unemployment Compensation program. Assuming the same number of New Yorkers would qualify for the federal regular extended benefits program, at an average benefit rate of $311 per week, the thirteen weeks of extended benefits covered by this part of the proposal cost approximately $370 million. The failure to enact an alternate trigger will likely mean that unemployed New Yorkers could lose hundreds of millions of dollars of extended benefits, which would otherwise have been released into the local and state economies in the form of payments for items such as food, housing, clothing, utilities, and sales taxes.

In light of current economic conditions, the State must do all it can to deliver UI benefits to the unemployed, and make maximum use of all funds available to meet its UI costs and lower the deficit in the State's UI Trust Fund.

Budget implications

The changes proposed in this legislation will bring an estimated $645 million in new federal funding to New York to cover the costs of unemployment insurance benefits, extended benefits, and administrative costs associated with the operation of the state unemployment insurance system. The bill would increase costs on the State and localities during 2009 for which benefits are not federally funded under ARRA, by $4 million and $24 million respectively. If the federal government were to enact legislation providing for a 100% feder- al share in 2010, the costs of the bill to the State for FY 2009-10 would rise to between $6 and 8 million. These added costs will be

offset, in part, by increased tax revenue from recipients of UI bene- fits.

Effective date

This proposal would take effect immediately upon enact- ment.