S 2312119th CongressIn Committee

Unemployment Insurance Modernization and Recession Readiness Act

Introduced: Jul 16, 2025

Sponsor: Sen. Wyden, Ron [D-OR] (D-Oregon)

Economy & TaxesLabor & Employment

Standard Summary

Comprehensive overview in 1-2 paragraphs

The Unemployment Insurance Modernization and Recession Readiness Act is a broad reform bill aiming to overhaul both extended unemployment benefits (EB) and regular unemployment insurance (UI) in the United States. Key goals are to provide more automatic and generous support during recessions, ensure benefits are consistent and portable across states, and add new programs to help jobseekers (including self-employment, short-time work, and a separate jobseeker allowance). The bill would shift more of the EB cost to the federal government, tighten and expand triggers for EB, and set new floors and rules for regular UI to guarantee a minimum benefit duration and earnings replacement. It also introduces numerous program expansions (e.g., protections for victims of violence, removal of waiting weeks, and partial/unemployment rules for part-time workers) and would begin most changes in 2027 (with some provisions taking effect earlier or under certain conditions). In short, the bill is designed to make unemployment insurance more reliable, more generous during downturns, and more adaptable to changing work arrangements, while creating new programs to support jobfinding and self-employment.

Key Points

1Full federal funding of extended unemployment benefits and coordinated EB improvements
2- EB would be funded 100% by the federal government (with limited offsets related to employer contribution considerations). The bill also reorganizes and expands EB, including new triggers and transition rules, portability, and an emphasis on ensuring continued EB during and after downturns. Sequestration protections for EB are included.
3New and elevated unemployment triggers to activate EB
4- State TUR trigger: EB can turn on when a state’s 3-month average unemployment reaches 5.5% or higher.
5- Elevated national trigger: EB can also turn on when national unemployment is elevated (with its own criteria and a requirement to report whether there is an “on” indication in the monthly employment data).
6- Coordination with other EB triggers ensures that when multiple triggers are “on,” enhanced benefits may be increased further.
7Tiered increases in EB duration and benefits during high unemployment
8- During high-unemployment periods, EB would be augmented in tiers (2nd, 3rd, and 4th tiers) with increasing percentages and weeks:
9- Tier 2: double the standard EB amount (100% vs 50%) and up to 26 additional weeks (vs 13).
10- Tier 3: 150% and up to 39 weeks.
11- Tier 4: 200% and up to 52 weeks.
12- These augmentations apply based on defined thresholds of unemployment and would persist for the period applicable to the individual recipient, even if thresholds later fall.
13Improved EB calculation, transition, and portability
14- The formula for benefits in EB accounts is adjusted to be more favorable to individuals (using the greatest amount rather than the least in certain calculations).
15- When a state ends an EB period, individuals with remaining EB can continue receiving for up to six months if eligible.
16- EB portability is expanded to align EB with how regular UI is treated across states (benefits can be used when moving between states).
17Additional EB program improvements and protections
18- Elimination of the mandatory 13-week EB off period in many situations.
19- Removal of the “look-back” element in certain insured unemployment rate triggers.
20- Expanded definitions and inclusions for which unemployment-related payments are considered and how they interact with EB.
21- EB payments would be exempt from sequestration.
22Regular UI modernization: floors, protections, and new options
23- Floor on weeks: At least 26 weeks of regular UI benefits, with state maximums adjusted so that total entitlement is not less than 26 weeks (or, if a state uses a max entitlement, that entitlement must be at least 26 times the weekly benefit amount).
24- Floor on minimum wage replacement: The weekly benefit would be capped by the state’s max weekly benefit but otherwise tied to a floor based on roughly 75% of the highest-earning quarter of the base period divided by 13.
25- Floor on maximum benefit: The maximum weekly benefit cannot be less than two-thirds of the state's average weekly wage (as determined annually).
26- Part-time work protections and earnings disregard: Workers who work part-time would not be barred from UI solely because of hours worked, and partial unemployment would be allowed with earnings disregards applied when calculating benefits.
27- Base period reforms: Reforms to which base period is used (the earnings history used to determine eligibility/benefits) to improve fairness, including accommodating unpaid leave, caregiving, or illness.
28- Expanded good cause: A broader definition of good cause for leaving a job (e.g., compelling reasons) to prevent disqualification from benefits.
29- Victims of violence or harassment: UI eligibility protections for victims, with documented confirmation requirements.
30- Elimination of waiting week: The initial waiting week for benefits would be removed.
31- Temporary work assignments: Completing a temporary job would be treated as an involuntary layoff for purposes of eligibility.
32- Self-employment assistance program: Provisions to support self-employment through a dedicated assistance program.
33- Short-time compensation: A more flexible short-time work program to allow partial unemployment as a bridge to full employment.
34- Other changes: New provisions affecting eligibility of student workers, dependents’ allowances, and coverage during labor disputes and for educational employees.
35Jobseeker Allowance (Title III)
36- The bill creates a new “Jobseeker allowance” program (Sec. 301) to support jobseekers, complementing regular UI and EB. Specific details are not provided in the excerpt, but it signals a dedicated benefit stream for those seeking work.
37Effective dates and sequencing
38- Most Title I and Title II provisions (other than certain sections like 104 and 109) would apply to weeks of unemployment beginning on or after January 1, 2027, or sooner if a state law changes, but not earlier than 60 days after enactment.
39- Section 104 (EB account calculations) has its own effective date timeline.
40- Section 109 (sequestration exemption) applies to sequestration orders issued after enactment.

Impact Areas

Primary affected groups- Unemployed and underemployed workers who rely on extended benefits or regular UI, including those in states with high unemployment rates.- Workers who would benefit from new protections for part-time work, caregiving scenarios, victims of violence/harassment, and self-employment-oriented supports.- States and UI agencies that administer EB and UI programs, which would shift to greater federal funding and require adjustments to state laws and IT systems.Secondary affected groups- Employers (through potential changes in employer experience rating and the interaction with EB funding, as well as changes in unemployment durations and job-search requirements).- Jobseekers and students, through the Jobseeker Allowance program and expanded eligibility rules.- Victims of violence or harassment and their service providers, who gain stronger protections and documentation pathways.Additional impacts- Potential macroeconomic effect: The act aims to stabilize consumer spending during recessions by providing more automatic and longer-lasting unemployment support.- Administrative and implementation considerations: States would need to adjust statutes, regulations, and funding mechanisms to comply with the new rules; federal funding and new triggers would require coordination across federal and state agencies.- Budgetary impact: Shifting EB to 100% federal funding and adding new programs and floors will affect federal spending and state program design.

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