On June 12th, 2000, amid much controversy, the DOL released the final rule, “Birth and Adoption Unemployment Compensation” (BAA-UC). The new rule allows states to pay unemployment insurance benefits to parents following the birth or adoption of a child. For some critics it is the source of the funding that is controversial. Opponents of the rule, who call it “Baby UI”, attack the use of unemployment insurance funds for people who choose to have children and choose to stay at home with them. Other critics question the authority of the DOL to implement this change to unemployment compensation legislation.
Unemployment compensation (UC) was originally based on the principal that people who involuntarily lose their jobs should be ready and available for work when a job is offered. States that participate in the Federal-State UC program have these A&A requirements. The DOL points out that the A&A requirement is not in the Federal UC Legislation, but is a requirement for state UC legislation. In the past the DOL has had the authority to interpret federal legislation and to make specific exemptions from A&A for the following special situations: training, illness, jury duty, temporary layoff. Now the DOL is extending the A&A exemption to employees who take leave to be with their newborn or newly adopted children.
The responses to this new rule by both public and employer groups have shown some misconceptions about the BAA-UC. It is not paid leave under the Family and Medical Leave Act (FMLA), nor is it a new program apart from the current UC program. The BAA-UC is voluntary for participating states and is not dependent upon employer size, as is the FMLA. As well it is limited to parents of newborns and newly adopted children, and does not guarantee parental leave or offer job protection. What it offers is a new basis for eligibility under the regular UC program.
Value of the Program for Employers
The DOL cites six national and international studies that examine the benefits of paid parental leave for employers. Results show that women with paid leave are more likely to return to their employer after the leave, that they work later into their pregnancies and that they start back to work sooner than women without paid leave. As well countries with paid parental leave have higher rates of employed women. The DOL suggests that the BAA-UC “experiment” will allow states to test whether this partial wage replacement program for new parents will promote their long-term attachment to the workforce.
Value of the Program for Families
AFL-CIO President John Sweeney noted that the United States is one of the only industrialized countries not to offer paid parental leave. He sees the BAA-UC as an important step in responding to families who cannot afford to take time off to care for their newborns or newly adopted children.
The Labor Department’s final rule on Birth and Adoption Unemployment Compensation is available on the Labor Department’s Internet site: www.dol.gov.