July 21, 2020

Young, Sasse Bill to Upgrade Dated Unemployment Insurance Systems During Coronavirus

WASHINGTON – U.S. Senators Todd Young (R-Ind.) and Ben Sasse (R-Neb.) today introduced the Unemployment Insurance Systems Modernization Act, legislation that would upgrade antiquated state unemployment insurance (UI) systems to more quickly respond to future emergencies, like the coronavirus pandemic. The pandemic has demonstrated a clear need to modernize states’ UI system technology.


“Millions of Americans have filed claims for unemployment insurance as a result of the coronavirus pandemic. However, due to the age and rigidity of state UI systems, it took many states at least a month to update their systems and process unemployment benefits,” said Senator Young. “It’s time to upgrade these decades-old UI systems to quickly process these benefits, allow for more flexible responses to emergencies, and enable the data-sharing needed to reduce fraud in the UI program.”


“This pandemic has shown that too many unemployment insurance systems are old and out of date. We need to bring these brittle systems into the 21st century so we can quickly and responsibly target aid to those who need it most,” said Senator Sasse.


U.S. Department of Labor Secretary Eugene Scalia recently stated that “one of the greatest challenges in the [Unemployment Insurance] system is the information technology infrastructure used by States to administer their programs.” State UI systems are, on average, 28 years old. 


These antiquated systems are the primary reason why Congress was limited to a flat dollar amount increase for UI benefits in the CARES Act. This is also the reason why many states were delayed in delivering all of the CARES Act benefits. The legacy systems have also left the door open to fraud as some states have been scammed with millions of dollars in fraudulent claims. 


The Unemployment Insurance Systems Modernization Act would require states to upgrade their state UI systems to be better prepared to handle a surge in claims, adjust wage replacement levels, be able to vary benefits over time, as well as automate a number of processes which are currently done manually in many states. It would also include a number of program integrity provisions that include requiring the use of the electronic system states use to detect and prevent fraud and those employers use to communicate with the state UI agency, and providing the Department of Labor with additional authority to hold states accountable for performance.


For the full bill text, click here.