Taxation of Unemployment Benefits

Unemployment compensation (UC) benefits have been fully subject to the federal income tax since the passage of the Tax Reform Act of 1986 (P.L. 99-514). Individuals who receive UC benefits during a year may elect to have the federal (and in some cases state) income tax withheld from their benefits. Legislation was introduced in the 108th Congress that would have repealed the taxation of UC benefits, provided a two-year suspension of the taxation of UC benefits, or transferred the proceeds from taxing UC benefits to the Unemployment Trust Fund. This report provides an overview of the taxation of UC benefits and legislation related to taxing UC benefits

Leave Benefits in the United States

[Excerpt] In addition to their jobs, workers have obligations — civic, familial, and personal — to fulfill that sometimes require them to be absent from the workplace (e.g., to serve on a jury, retrieve a sick child from day care, or attend a funeral). The U.S. government generally has allowed individual employers to decide whether to accommodate the non-work activities of employees by granting them leave, with or without pay, rather than firing them. In other countries, national governments or the international organizations to which they belong more often have developed social policies that entitle individuals to time off from the workplace (oftentimes paid) for a variety of reasons (e.g., maternity and vacations). Public policies specifically intended to reconcile the work and family lives of individuals have garnered increased attention among countries in the Organization for Economic Cooperation and Development (OECD). In the United States, which is an OECD member, congressional interest recently has coalesced around family-friendly paid leave proposals (e.g., H.R. 1542/S. 910, S. 80 and H.R. 5781, S. 1681 and H.R. 5873). They would entitle workers to time off with pay to accomplish parental and caregiving obligations to help women in particular balance work and family responsibilities because they are the typical family caregiver and a majority of women in the U.S. population are in the labor force. Currently, there are few federal statutes that pertain directly or indirectly to employer provision of leave benefits for any purpose. This report begins by reviewing those policies, including the Pregnancy Discrimination Act and the Family and Medical Leave Act. Temporary Disability Insurance (TDI) programs, which five states have established to compensate for lost wages while workers are recovering from nonoccupational illnesses and injuries, are discussed as well. So too are the California and New Jersey family leave insurance programs, which essentially extend the TDI programs of the two states to employees caring for family members. The report then examines the incidence of different types of paid leave that U.S. employers voluntarily provide as part of an employee’s total compensation (wages and benefits). For example, vacations and holidays are the most commonly offered leave benefits: more than three-fourths of employees in the private sector receive paid time off for these reasons. Access to leave by various employee and employer characteristics also is analyzed, with particular attention focused on paid sick leave, which is offered to 57% of private sector employees. The report closes with results from a federal government survey of the average direct cost to businesses of different types of leave. Indirect employer costs that might arise in connection with some types of leave more than others, such as the greater likelihood of hiring and training temporary replacements for employees absent because of maternity versus bereavement reasons, are not included. Neither are estimates of potential gains to employers (e.g., a more stable and experienced workforce, increased productivity due to greater worker morale) and society (e.g., improved public health, lower formal caregiving costs, and broader participation in civic affairs)

Welfare Reform: An Issue Overview

CRS ReportCRSWelfareReform101403.pdf: 866 downloads, before Oct. 1, 2020

Pension Sponsorship and Participation: Summary of Recent Trends

[Excerpt] According to the U.S. Census Bureau’s Current Population Survey (CPS), the number of private sector workers between the ages of 25 and 64 whose employer sponsored a retirement plan fell from 53.5 million in 2007 to 52.3 million in 2008. The number of private-sector workers who participated in employer-sponsored retirement plans fell from 44.1 million in 2007 to 42.9 million in 2008. The proportion of all 25 to 64 year-old workers in the private sector, whether employed full time or part-time, who participated in employer-sponsored retirement plans decreased from 45.1% in 2007 to 43.6% in 2008. Between 2000 and 2008, the number of private-sector workers between the ages of 25 and 64 who participated in employer-sponsored retirement plans fell by 3.2 million, declining from 46.1 million to 42.9 million. The percentage of workers who participated in employer-sponsored retirement plans fell from 50.3% in 2000 to 43.6% in 2008. A CRS analysis of the CPS indicates that, among private-sector workers aged 25 to 64 who were employed year-round, full-time: • The percentage of workers whose employer sponsored a retirement plan was 59.9% in 2007 and 59.0% in 2008. • The percentage of workers who participated in employer-sponsored retirement plans was 52.0% in 2007 and 51.1% in 2008. • Only 25.8% of workers at firms with fewer than 25 employees participated in an employer-sponsored retirement plan in 2008, compared to 45.9% of workers at firms with 25 to 99 employees and 63.6% at firms with 100 or more employees. • Among those who were employed year-round, full-time, 51.2% of men and 51.0% of women participated in an employer-sponsored retirement plan in 2008. • Only 43.3% of private-sector workers aged 25 to 34 and employed year-round, full-time participated in an employer-sponsored retirement plan in 2008, compared to 50.9% of workers aged 35 to 44, 55.4% of those aged 45 to 54, and 56.6% of those aged 55 to 64. • Black, Hispanic, and other non-white workers were less likely to have participated in an employer-sponsored retirement plan than white, non-Hispanic workers. Fifty-seven percent of white workers participated in an employer-sponsored retirement plan in 2008, compared to 45.6% of black non-Hispanic workers, 30.3% of Hispanic workers, and 47.9% of other non-white workers (mainly Asian-American and Native American workers). • Only 27.7% of workers whose annual earnings were in the lowest quartile in 2008 (under $28,000) participated in a retirement plan at work, compared to 68.6$65,000). The CPS ­ a survey of households ­ shows fewer private-sector workers participating in employer-sponsored retirement plans than are reported by the National Compensation Survey (NCS), which is a survey of business establishments. According to the CPS, the proportion of private-sector workers aged 25 to 64 who participated in an employer-sponsored retirement plan of some kind fell from 45.0% in 2005 to 43.6% in 2008. In contrast, NCS data indicate that 50% of workers in the private sector participated in employer-sponsored retirement plans in 2005 and 51% of private-sector workers participated in employer-sponsored retirement plans in 2008

Health Insurance Coverage for Retirees

[From Summary] Many retirees depend on their former employer for retirement health insurance, either as their sole source of coverage for those under 65 or as a supplement to their Medicare coverage once reaching age 65. However, the future of these benefits is uncertain. With the retirement of the baby boom generation looming ahead, employers offering coverage to their retired workers will face a huge future financial commitment. For this reason, many employers are re-examining their commitment to providing retiree health benefits. Some employers have already reduced or eliminated health insurance coverage for their retirees. Further, among employers who provide health insurance for current retirees, their current workers are less likely to be guaranteed these benefits upon retirement

Immigration: The Effects on Low-Skilled and High-Skilled Native-Born Workers

The large influx of immigrants in recent decades has led to an equally long, still unresolved debate over their effect on the labor market outcomes of native-born workers. Economic theory posits that an increase in the supply of labor, such as from immigration, will reduce the wages and employment of native-born workers. Studies, utilizing two approaches to test the theory, have produced conflicting results with differing implications for public policy. The concentration of foreign-born workers in certain cities and skill groups led some economists to posit that immigration’s greatest impact would be felt by similarly skilled native-born workers living in those areas. Studies thus have compared differences in labor market outcomes between native-born workers who live in high- versus low-immigrant areas and who most often compete for jobs with foreign-born workers; given the composition of the recent immigrant flow, these would be low-skilled U.S. workers. Most inter-area analyses have found scant evidence that foreign-born labor adversely affects the labor market prospects of U.S. workers in general. A few inter-area studies have estimated a slight negative impact on low-skilled natives—who represent a small share of total U.S. employment. Other economists have argued that the inter-area approach underestimates immigration’s consequences because it assumes that labor, capital, and goods do not rapidly adjust to the immigration-induced increase in the supply of labor. If, for example, native-born competitors quickly decide to leave high-immigrant areas, their movements would spread any employment and wage effects due to immigration across the nation, and thereby make it difficult for spatially based research to detect any impact. Some analysts, therefore, have concluded that immigration’s labor market effects can best be identified by examining data at the national level. The economy-wide approach is not without its limitations, however. The relationship between internal labor migration and immigration remains unsettled as well. Several national studies have estimated that immigration, given its composition in recent decades, has hurt—albeit to differing degrees—the labor market opportunities of the least skilled and experienced U.S. workers. If a policy goal is to improve the prospects of U.S. workers who have not graduated from high school, this research suggests that changing the skill composition of legal immigrants and reducing the flow of unauthorized aliens might be fruitful courses of action. However, some of the very limited number of analyses that focus on high-skilled workers in particular (e.g., those in computer science and engineering fields) estimate that an increase in foreign labor adversely affects comparably skilled native-born workers. Thus, shifting the immigrant supply toward higher-skilled workers might not only harm this native-born skill group, but also undercut the most often recommended means of ameliorating immigration’s impact on low-skilled U.S. workers, namely, pursuing additional education

Foreign Students in the United States: Policies and Legislation

[Excerpt] Five years after the September 11, 2001, terrorist attacks by foreign nationals — including several terrorists on students visas — the security concerns over foreign student visas are being supplanted by competitiveness concerns. Potential foreign students, as well as all aliens, must satisfy Department of State (DOS) consular officers abroad and immigration inspectors upon entry to the United States that they are not ineligible for visas under the so-called “grounds for inadmissibility” of the Immigration and Nationality Act, which include security and terrorist concerns. The consular officers who process visa applicants are required to check the National Counterterrorism Center’s (NCTC) automated lookout systems before issuing any visa. In part because of these security measures, student visa debates have shifted from security to market-based discussions

Emergency Unemployment Compensation

[Excerpt] The Emergency Unemployment Compensation (EUC) program was created by P.L. 110-252. This new temporary unemployment insurance program provides up to 13 additional weeks of unemployment benefits to certain workers who have exhausted their rights to regular unemployment compensation (UC) benefits. The program effectively begins July 6, 2008, and will terminate on March 28, 2009. No EUC benefit will be paid beyond the week ending July 4, 2009. This report will be updated to reflect congressional action or programmatic changes. Individuals should contact their state’s unemployment agency to obtain information on how to apply for and receive EUC benefits. The U.S. Department of Labor maintains a website with links to each state’s agency at http://www.workforcesecurity.doleta.gov/map.asp]

Minimum Wage, Overtime Pay, and Child Labor Inventory of Proposals in the 109th Congress to Amend the Fair Labor Standards Act

This report discusses potential changes to the Fair Labor Standards Act that may occur during the 109th Congress