The Labor
Department´s (DOL) regulation that will allow states to make unemployment
compensation available to parents of newborns and newly adopted children came
into effect on August 14th, 2000. Â
The rule titled "Birth
and Adoption Unemployment Compensation" (BAA-UC) has been highly
controversial and is currently the subject of a lawsuit by a business group
that includes the Society for Human Resources Management and the Chamber of
Commerce - see "The
DOL is Being Sued Over Baby UI".
By the time the
BAA-UC, originally introduced in December 1999, was issued in its final form on
June 12th, fifteen states had introduced BAA-UC plans. Model
legislation was included in the rule to help states change their unemployment compensation
laws to accommodate the BAA-UC.
According to the
National Partnership for Women & Families (NPWF) there are now at least
eighteen states that have introduced family leave benefit bills. Â A description of the current efforts of
these states to develop family leave benefits is available on the NPWF
website. Â Information is available
for the following states: California, Connecticut, Florida, Illinois, Indiana,
Iowa, Maryland, Massachusetts, Minnesota, Mississippi, Missouri, New Hampshire,
New Jersey, New York, Pennsylvania, Vermont, Virginia and Washington.
In Massachusetts on
August 10th, 2000, the last day that the legislature was in session,
Governor Paul Cellucci did not approve a budget bill that had been modified to
include a proposal for a state pilot BAA-UC program. Â He sent this section of the bill back to the House requesting
that the state´s unemployment insurance fund not be used for parental leave
benefits. Â As an alternative he proposed
that employers receive a tax credit equal to 50 percent of what they pay out in
parental leave benefits.
There was
considerable interest in the bill because of the media attention it received
when it was introduced before the Massachusetts´ "Special Task Force of the
Committee on Commerce and Labor" in June 2000. Â
It is doubtful that a revision of the bill will be possible this year
without a special reconvening of both houses.
According to figures from the DOL, state unemployment funds have grown dramatically between 1992 and 1999 because of low unemployment. Â For this period they report a 1,200 percent increase in the District of Columbia´s state fund, a 458 percent increase in Maryland´s, and a 104 percent increase for Virginia´s. In Massachusetts where the state unemployment fund has grown 605 percent in the last seven years, the DOL points out that by using less than a third of the annual interest earned by the fund - between $32 and $43 million -- the state could fund paid parental leave.
In a paper prepared by the U.S. Department of Labor/Office of Workforce Security on May 24th, 2000, titled "Labor Department´s economic Analysis of the Birth and Adoption Unemployment Compensation Plan", the DOL revised its cost estimates of the BAA-UC experiment from a possible $68 million to a more probable $196 million. The new estimate is based upon the BAA-UC legislation proposed by fifteen states rather than the original four states. Â Â Business groups however consider the DOL´s cost estimates to be inaccurate and are quoting figures as high as $36 billion to fund such plans.
Does the Success of
the BAA-UC Depend upon the Election?
Republican Presidential candidates George W. Bush agrees with business that unemployment insurance should be restricted to people who lose their jobs.
Vice President Gore, the Democratic nominee supports the Presidents initiative saying "what´s good for families can be good for the economy".