Since the year 1932, some states, along with the federal government have implemented what is termed as an unemployment benefit. The United States Congress passed the Federal Unemployment Tax Act. In accordance with the act, employers had to pay a specified payroll tax to the Internal Revenue Service (IRS). The IRS then contributes these funds in a state-wise proportion, which funds the unemployment insurance and job service programs.
In the times when economic conditions force layoffs, the Federal Unemployment Tax Act provides for half the cost of extended unemployment benefits. Apart from that, a fund is also provided so that the states can borrow from the Federal government, when the originally allocated fund is used up. The whole act is included in the Trade Act of 1974. The act takes the prudence of the country's trade being hampered by foreign policies and also the people who have lost their jobs; it supports the unemployed till the time they find a new job. The period of support has now gone up to 26 weeks.
There has been a little change in the act, though, according to dol.gov a new act named The Trade Adjustment Assistance Re-authorization Act of 2015 (TAARA 2015)(P.L. 114-27, Title IV) reauthorized the Act. TAARA 2015 revised reporting requirements to align performance accountability for the TAA Program with that of other partner programs in the workforce system under the Workforce Innovation and Opportunity Act (WIOA). Here is the summary of the benefit's implementation:
- Any worker unemployed without any fault or as a result of layoff or job cuts or closure of the company or unit or department, becomes eligible for the benefit.
- Based upon the reports and proofs of the earlier earnings, 36% of the average weekly benefit, of the individuals' average weekly salary is provided.
- Self employed and part-time workers are not eligible for the benefit.
- The application for the benefit takes 2 weeks to be enforced and is stopped as soon as jobs are created or the beneficiaries get jobs.
- The application process and fund distribution are handled by the state unemployment agency.
- As per the norms of United States labor department, the benefit is provided for a maximum of 26 weeks, though Federal laws can be modified through the Social Security Act, for a longer extension, which is exactly what the act implies.
- Massachusetts – It provides up to 30 weeks of UI in cases where the federal compensation program is absent.
- Montana – It provides up to 28 weeks of UI
- The number of participants served are 47,201* and the cost per participant is 14,260*
- The projected number of participants served are 47,201* and the cost per participant is USD 14,260*
- Placement in employment, education, or long term training in the second quarter after exit.
- Placement in employment, education or long term training in the fourth quarter after exit.
- Median earnings of those employed in the second quarter after exit.
- Credential attainment.
- Measurable skill gains toward credential attainment/employment.
- Effectiveness in serving employers.