As Q2 came to a close, the 35th Annual National UI Issues Conference took place in Kansas City, MO. Here are a few highlights from the national program perspective of the UI Program Update, prepared by Gay M. Gilbert with the US Department of Labor, the Office of Unemployment Insurance, and the Employment and Training Administration:

The UI Program is experiencing the lowest workload since the 70s.

States are experiencing significantly constrained funding, which limits staffing capacity

*  Administrative funding is not sufficient & budget climate remains poor
*  Loss of institutional knowledge and staff capacity putting the program at risk
*  IT Modernization still needed by a majority of states

As a result, states continue to struggle with meeting performance standards and integrity measures

*  UI customers are paying the price for poor program performance

States are not ready for the next recession

*  Over half of state trust funds are not solvent enough to withstand the next recession
*  During the last “Great Recession,” 36 states borrowed a total of $48.5B and as of 06/15/16, 3 states still owe $3.3B

Many states have severely restricted benefit availability

*  Fraud has increased and is becoming harder to fight
*  Reduced benefit duration (weeks)
*  Elimination of dependents benefits
*  Raised qualifying earnings
*  Changed definition of misconduct
* Increased number of weeks of employment needed to requalify for UI after being declared ineligible due to misconduct.

Taxing structures in many states do not distribute the tax burden fairly among employers

*  Increased taxable wage base
*  Issued bonds to repay Title XII Loans
*  Change Experience Rating System

The national unemployment rate at the end of the quarter (Q2 2016) was 4.9%, a slight increase from May, but still just under the rate at the end of the first quarter.