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06/08/99 TUE 10:38 FAX 202 219 8506 ETA/UIS 1 002 UI FOR NEW PARENTS Fact Sheet A 1996 study by the Commission on Family and Medical Leave found that wage loss was the most significant barrier to parents taking advantage of unpaid leave following the birth or adoption of a child. On Sunday, May 23, 1999, President Clinton directed the Secretary of Labor to propose new regulations and model State legislation to enable States to develop innovative ways of using the Unemployment Insurance (UI) program to support parents taking leave to care for a newborn or newly-adopted child. States today have significant flexibility in designing their own UI programs. Legislation was introduced in several States during this and prior years to provide UI benefits to workers on some form of leave to meet family obligations. The Administration was asked whether the UI program can be used for such purposes consistent with Federal UI law. Under new regulations that the Department of Labor (DOL) will propose, the States will be able to use UI to assist new parents. It is worth noting that paying UI to parents on leave following birth or adoption appears to be a logical extension of the UI program. All States already pay UI to workers who are laid off but whom the employer expects to recall. Providing paid leave for employees who have just become parents and need to take some time away from the job is somewhat analogous to this and other current uses of the program. States that wish to participate in the program proposed by the President will need to amend their laws. The UI program is authorized under the Social Security Act and the Federal Unemployment Tax Act but operates under laws specific to each State. These State laws determine how workers qualify for benefits within federal guidelines. The DOL will work with the States that have expressed interest this year in the course of issuing its regulation so that these States will be in a position to implement, at the first possible opportunity, appropriately structured plans to use UI to assist new parents. Whether the same people will be covered as under the FMLA, benefit duration, and other benefit issues, as well as employer costs issues, will be addressed during the rulemaking process. The DOL anticipates that the proposal will allow States to spread costs broadly throughout the system, rather than limiting costs to the particular employers whose employees use this benefit. It is difficult to predict when individuals will be able to receive benefits. The DOL must first issue regulations and model State legislation, and States must then change their own laws. DOL expects rules will be published around January 2000. This new nogrum will he whorly volume for M state