Recently the National Association of State Workforce Agencies (NASWA) released its list of 2022 Legislative Priorities. These advocacy issues are published annually on behalf of state workforce agencies, developed in collaboration with members through 10 national policy committees. Through this list of legislative priorities, NASWA identifies the workforce development investments it recommends for Congress, as well as policy changes for the workforce system, data infrastructure support and unemployment insurance administration.

There are several key takeaways from their priority issues this year, especially concerning unemployment insurance.

The one most on the minds of employers with whom we engage is the waiver of all nonfraudulent pandemic related unemployment compensation.  Some states already chose this route but there are still many states that put the burden on employers to identify claims associated with the pandemic or which have chosen not to allow for non-charging of pandemic claims. If this recommendation comes to fruition, many employers could see a lower tax rate for 2021 and 2022.

Another item of interest to employers would be the waiver of interest payments and accrual of interest on federal advances. During the pandemic, state unemployment trust fund balances were depleted so to ensure the continuance of the program, some states had to borrow funds via a Title XII loan. If the loans are not repaid by a certain date each year, interest accrues and must be paid. The waiver of this interest payment would certainly have a positive impact to employers. Since employers fund the unemployment insurance system, states would be looking to them to provide repayment of the interest.

One other notable recommendation is giving states the flexibility over the CARES Act funding by extending their authority over its use. Again, some states used this funding to help replenish their trust fund balances, thereby precluding the need to borrow from the federal government. If states are given further flexibility, they could use this to improve their antiquated databases or add staffing.

While all of the recommendations would be a step in the right direction, these three are topics with the most interest for our clients. The full list of NASWA recommendations is as follows:

Unemployment Insurance Administration:

The main focus on NASWA’s unemployment insurance recommendations are designed to prepare for future recessions while promoting efficient and equitable administration of UI programs. The recommendations include:

• Waive all nonfraudulent pandemic related unemployment compensation
• Authorize state staffing flexibility through 2022
• Hold states harmless for any overpayments made under the federal Lost Wages Assistance (LWA) program
• Waive interest payments and the accrual of interest on federal advances to states
• Increase administrative funding as a whole
• Provide flexibility for states with solvent Trust Funds
• Allow states to waive 2022 evaluation requirements for the Reemployment Services and Eligibility Assessment (RESEA) program
• Provide additional flexibility and deadlines for use of UI above-base funds
• Exempt the UI program from sequestration requirements
• Update the Extended Benefits program
• Give states flexibility over CARES Act administrative funding by extending their authority and expanding permitted uses of the funding
• Encourage further investments in UI program integrity
• Expand Short Term Compensation (Workshare) coverage
• Amend the Improper Payments Information Act (IPIA) and the Elimination and Recovery Act (IPERIA)

Workforce System:

NASWA’s recommended changes in the workforce system are designed to increase flexibility for states and enhance federal investment. They advocate for the following actions to achieve those goals:

• Increase investment in core workforce funding
• Avoid short-term, episodic, and/or competitive funding opportunities
• Promote Workforce Innovation and Opportunity Act (WIOA) funding flexibility
• Increase permanent funding for the Wagner-Peyser Act
• Scale up apprenticeships
• Address youth employment needs by providing states more flexibility under the WIOA youth program
• Establish subsidized employment opportunities
• Support the states’ abilities to promote equal opportunity in workforce programs
• Continue funding of the Reemployment Services and Eligibility Assessment (RESEA) program at full authorization levels
• Maintain investment for governors’ statewide needs at 15%
• Sustain state flexibility for Wagner-Peyser staffing
• Expand eligibility for Disabled Veteran Outreach Program (DVOP) services to veterans aged 50 and over and to veteran spouses
• Maintain service to veterans, transitioning service members, and military spouses within the workforce development system

Data Infrastructure Support

NASWA also advocates for the following recommendations to invest in state-driven data infrastructure, better align the workforce with post-secondary and infrastructure investments, reduce systemic barriers to success and promote economic mobility:

• Provide adequate funding to support state Labor Market Information (LMI) divisions and the U.S. Bureau of Labor Statistics
• Provide increased funding to states under the federal-state cooperative arrangement
• Increase funding to state LMI/research divisions
• Invest long-term in multistate data collaboratives
• Require partnerships between education, workforce systems, and labor market information systems to support more informed planning and successful outcomes
• Increase access to and availability of childcare
• Expand high speed internet access
• Enhance the capacity of state agencies to conduct and fund marketing and outreach efforts
• Improved alignment of workforce, human services, housing and education agencies
• Invest in supporting technologies for integrated service delivery

Regardless of the legislative outcomes for NASWA’s unemployment insurance priorities this year, companies can still take steps to manage their costs by leveraging the expertise of unemployment management professionals.