Charting a Path for Unemployment Insurance

Building on the momentum generated by historic American Rescue Plan Act investments in unemployment insurance modernization, the Department of Labor has released a comprehensive plan for transforming the unemployment insurance (UI) system, entitled Building Resilience: A plan for transforming unemployment insurance.

The plan details how the department is tackling challenges across seven areas of the UI system, and key legislative challenges that must be solved to unlock the plan’s potential.

1. Adequately funding UI administration
2. Delivering high-quality customer service
3. Building resilient and responsive state IT systems
4. Bolstering state UI programs against fraud 
5. Ensuring equitable access to robust benefits and services 
6. Rebuilding and stabilizing the funding of state UI benefits
7. Strengthening reemployment and connections to suitable work

The legislative recommendations, which are grounded in the Biden administration’s UI reform principles, would help the department more effectively oversee the UI system and further support states’ efforts to build and sustain stable UI programs. The plan is a response to a recommendation made by the Government Accountability Office in 2022, when it put the UI system on its High Risk list.

To kick off the next stage of UI transformation activities detailed in the plan, we gathered key claimant advocates, labor unions, business representatives, state UI agency officials, UI program experts and other stakeholders for two interactive discussions on the future of UI. These events highlighted key areas of the transformation plan and emphasized collaboration as a critical component of advancing system change. 

Acting Secretary of Labor Julie Su gave opening remarks at both events, acknowledging the vital role of UI in guiding the country through the darkest moments of the COVID-19 pandemic and accelerating the economic recovery. However, in its current form, UI is unable to deliver the full safety net that America needs. Emphasizing the importance of repairing the UI safety net now while the economy is strong, Acting Secretary Su said: “Now is the time to seize the moment and make lasting investments and reforms to prepare for the next economic crisis.”

Acting Secretary Su also noted that early successes demonstrate what’s possible when states and the department have the resources to work together. She spoke about the hundreds of American Rescue Plan Act-supported projects underway tackling discrete challenges in the system, as well as what we’ve learned about what needs to change in the UI system – an ongoing effort that directly informed the transformation plan.

The acting secretary also emphasized the significant benefits that lie ahead for all stakeholders if we continue building upon the transformative work kicked off by American Rescue Plan Act. As she emphasized, the time to fix the UI system is now, during today’s historic stretch of low unemployment. Ongoing collaboration by state and federal policy makers, including Congress, together with other key system stakeholders is critical to repairing this essential U.S. safety net program.

  
Claire McKenna is a senior policy advisor in the U.S. Department of Labor’s Office of Unemployment Insurance Modernization