Suzanne Simonetta Chief, Division of Legislation Federal-State Unemployment Compensation (UC) Legislative Seminar Welcome

Getting the Most Out of the Training Navigating the Course and the ITSC site Printable resources This is about the law and what it has been interpreted to mean, it is not a venue to debate whether one agrees with the interpretations Federal-State Unemployment Compensation (UC) Legislative Seminar

Federal Update Federal-State Unemployment Compensation (UC) Legislative Seminar

History of the Federal State UC Program

Origins of Social Insurance Programs Agrarian societies transformed into industrial economies German social insurance programs British social insurance programs Federal-State Unemployment Compensation (UC) Legislative Seminar

Triangle Shirtwaist Factory Fire Factory investigating commission Frances Perkins and then State Senator Robert Wagner worked together on the Commission Investigate manufacturing conditions and other matters related to workers’ safety and health Federal-State Unemployment Compensation (UC) Legislative Seminar

John R. Commons In the wake of the Triangle fire state moved to enact workers’ compensation laws Commons observed that employers prevented workplace accidents to keep their workers’ compensation premium low Commons developed a plan to apply the same concept to unemployment and led to the Huber Bill Federal-State Unemployment Compensation (UC) Legislative Seminar

Great Depression and Early State Action 33 states introduced IC legislation in 1931 Wisconsin enacted its law in different UC bills introduced in 25 states in 1933 Wisconsin law was almost repealed and its implementation was delayed in 1933 Federal-State Unemployment Compensation (UC) Legislative Seminar

National Interest in UC Wagner-Peyser Act of 1933 created the U.S. Employment Service Wagner-Lewis bill introduced in 1934 proposed a federal-state partnership for a UC program President Roosevelt formed the Committee on Economic Security in June 1934 Federal-State Unemployment Compensation (UC) Legislative Seminar

Why a Federal-State Partnership? Very few states enacted UC laws of their own because of interstate competition concerns Concerns that a Federal system would result in overly bureaucratic administration and a system that was slow to respond A partnership would allow the Federal government to provide broad uniformity while allowing states latitude to meet the needs of diverse workforces Federal-State Unemployment Compensation (UC) Legislative Seminar

Social Security Act of 1935 August 14, 1935 established the UC system Many states waited to see if Roosevelt would be re- elected and the Act would be found constitutional before enacted UC laws. Federal-State Unemployment Compensation (UC) Legislative Seminar

Tax Credit System Employers pay a Federal tax but are eligible for credit provided the state has a law that meets the Federal requirements System was created to address constitutional concerns using a tax structure similar to the Federal estate tax which had been found constitutional Federal-State Unemployment Compensation (UC) Legislative Seminar

Steward Machine Company v. Davis Court drew a distinction between permissible Federal legislation designed to encourage state action and prohibited Federal action that impairs state autonomy Found that the Federal government was properly using its taxing authority to provide for the general welfare It’s a voluntary, opt-out system – state have any system they want but on those that meet certain standards are eligible to receive tax credits and administrative grants Federal-State Unemployment Compensation (UC) Legislative Seminar

Questions & Open Discussion Federal-State Unemployment Compensation (UC) Legislative Seminar