Unemployment Insurance

To administer a program of unemployment insurance for eligible workers through Federal and State cooperation; to administer payment of trade adjustment assistance, alternative trade adjustment assistance, disaster unemployment assistance, unemployment compensation for Federal employees and ex-service

Agency - Department of Labor

The Department of Labor fosters and promotes the welfare of job seekers, wage earners and retirees by improving their working conditions, advancing their opportunities, protecting their retirement and health benefits and generally protecting worker rights and monitoring national economic measures.

Office - Local One-Stop center; State Workforce Agency; Employment and Training Administration regional offices listed in Appendix IV of the Catalog.

Program Accomplishments

State agencies pay unemployment compensation to eligible workers and collect state unemployment taxes from employers. These agencies also pay unemployment benefits and adjustment allowances to eligible former Federal civilian employees (UCFE), ex-service members (UCX), disaster unemployment assistance (DUA), and trade-impacted workers (TRA & ATAA).

Uses and Use Restrictions

The states have the direct responsibility for establishing and operating their own unemployment insurance programs, while the Federal Government finances the cost of administration.

State unemployment insurance tax collections are used solely for the payment of benefits.

Federal unemployment insurance tax collections are used to finance expenses deemed necessary for proper and efficient administration of the state unemployment insurance laws; to reimburse state funds for one-half the costs of extended benefits paid under the provisions of state laws which conform to the provisions of the Social Security Act and the Federal Unemployment Tax Act; and to make repayable advances to states when needed to pay benefit costs.

Funds used for benefit payments may not be used for any program administration costs nor for training, job search, and job relocation payments.

Disaster Unemployment Assistance (DUA) is paid out of funds provided by the Federal Emergency Management Agency (FEMA).

Benefits for former Federal civilian employees, including postal workers, and former members of the Armed Forces are paid out of the Federal Employees Compensation Account (FECA) in the Unemployment Trust Fund, subject to reimbursement by the former employing agency.

Eligibility Requirements

Applicant Eligibility

State workforce agencies, including those in the District of Columbia, Puerto Rico and the Virgin Islands.

Beneficiary Eligibility

All workers whose wages are subject to State unemployment insurance laws, Federal civilian employees, ex-service members, trade readjustment allowance for workers who become unemployed or underemployed because of the adverse effect of increased imports or because of shifts in production outside the U.S., and workers whose unemployment is caused by a Presidentially declared disaster under the Robert T. Stafford Disaster Relief and Emergency Assistance Act, are eligible if they are involuntarily unemployed, able to work, available for work, meet the eligibility and qualifying requirements of the state law, and are free from disqualifications. Individual State information on eligibility requirements is available from local One-Stop Career Centers.


Awards of grants to states are conditioned on the Secretary of Labor's determination that the states' unemployment compensation laws are in conformity with the Social Security Act and the Federal Unemployment Tax Act and that State practices substantially comply with these laws. Costs will be determined in accordance with OMB Circular No. A-87 for State and local governments.

Aplication and Award Process

Preapplication Coordination

This program is excluded from coverage under E.O.


Application Procedures

The standard application forms as furnished by the Federal agency and required by OMB Circular No. A-102 must be used for this program. Eligible applicants are furnished applications (State Quality Service Plan) by the Employment and Training Administration for this program. States submit the plans to apply for grants to the appropriate regional office of the Employment and Training Administration, based on target performance levels issued to the states through ETA regional offices pursuant to nationally-developed workload estimates. All plans are to be constructed in terms of selected workloads to be undertaken and the resources and numbers of employees needed to accomplish them. This program is excluded from coverage under OMB Circular No. A-110.

Award Procedures

The Regional Administrator for Employment and Training issues a preliminary approval for a State within the dollar target provided by the ETA National Office, based on the State plan submitted.


State plans are submitted to the appropriate Regional Office for final approval no later than mid-September.


Social Security Act, as amended, 42 U.S.C. 501-504, 1101-1109; Trade Act of 1974, as amended, Public Law 93-618, 88 Stat. 2024, 19 U.S.C. 2311; Federal Unemployment Tax Act, as amended, 26 U.S.C. 3404 note; Federal Employees and Ex-Service Members, 5 U.S.C. 8501 and 8521; Robert T. Stafford Disaster Relief and Emergency Assistance Act, as amended, Public Law 100-707, 88 Stat. 153, 42 U.S.C. 5171.

Range of Approval/Disapproval Time

Approximately 45 days at the Regional Office level.


Contact Federal agency.



Assistance Considerations

Formula and Matching Requirements

Matching requirements - not applicable. Grants for administration of programs is determined by formula based on State workload projections pursuant to economic assumptions and nationally developed workload estimates.

Length and Time Phasing of Assistance

Annual grants for base operation of programs, plus additional quarterly funding based on actual workloads. Financing of administrative costs is accomplished through Letter of Credit drawdowns needed to meet immediate cash requirements.

Post Assistance Requirements


Weekly, monthly, quarterly, and yearly statistical reports of unemployment insurance workloads.

Separate quarterly financial status reports are required for grants used for administration of each type of program.


Subject to audits by the Department of Labor or other authorized Government agencies. In accordance with the provisions of OMB Circular No. A-133 (Revised, June 27, 2003), Audits of States, Local Governments, and Nonprofit Organizations, nonfederal entities that expend financial assistance of $500,000 or more in Federal awards will have a single or a program-specific audit conducted for that year. Nonfederal entities that expend less than $500,000 a year in Federal awards are exempt from Federal audit requirements for that year, except as noted in Circular No. A-133.


State requirements are to be in conformity with Federal statutes.

Financial Information

Account Identification

20-8042-0-7-999, 16-0326-0-1-999,


(Grants) FY 07 $,2,510,000,000; FY 08 est $2,474,000,000; and FY 09 est $2,646,000,000 (Benefits) FY 07 $33,350,000,000; FY 08 est $35,356,000,000; and FY 09 est $37,975,000,000.

Range and Average of Financial Assistance

Grants: $1,900,000 to $359,000,000. Average: $45,400,000.

Regulations, Guidelines, and Literature

"Unemployment Insurance For Ex-Service Members;" "Unemployment Insurance For Federal Workers;" "Significant Provisions of State Unemployment Insurance Laws;" "Comparison of State Unemployment Insurance Laws;" and regulations, factsheets, and other program information are available on the Internet at http://workforcesecurity.doleta.gov/unemploy.

Information Contacts

Regional or Local Office

Local One-Stop center; State Workforce Agency; Employment and Training Administration regional offices listed in Appendix IV of the Catalog.

Headquarters Office

Administrator, Office of Workforce Security, Employment and Training Administration, Department of Labor, 200 Constitution Avenue, N.W. Washington, DC 20210. Telephone: (202) 693-3029. Contact: Cheryl Atkinson.

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