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Texas Becomes First State to Apply for a Waiver to Help Move the Unemployed from Benefit Checks to Paychecks

February 28, 2012

Washington, DC – New flexibility for states to run their unemployment programs has been on the books for barely a week and one state is already taking advantage of the reforms. On February 24, 2012, Texas became the first state to seek a federal waiver that would allow state unemployment funds to pay for reemployment programs.  This waiver authority is being made available to states for the first time as part of the “The Middle Class Tax Relief and Job Creation Act,” (H.R. 3630/P.L. 112-96), which includes the most significant reforms to the unemployment benefits system since the 1930s.  Commenting on the action taken in Texas, Ways and Means Committee Chairman Dave Camp (R-MI) issued the following statement:

“The goal of the unemployment system should be to get people back to work and earning paychecks, rather than have them simply collecting unemployment checks.  I applaud Texas for taking advantage of the new reforms allowed under the law and aggressively taking steps to design a program to help people get back to work as quickly as possible.”   

Until recently, states were prohibited from using unemployment funds to help people with the types of assistance Texas plans to offer through its unemployment program.  The law brings the federal unemployment system more in line with the demands of today’s economy by allowing states to tailor reemployment programs and develop innovative ways to help people get back to work.  Here is how Texas describes the waiver program they plan to operate using this new flexibility, “With DOL approval, Texas will withdraw up to $100 million over a three-year period to fund subsidized wage reimbursements to employers through reemployment demonstration project to expedite the reemployment of individuals who have established a benefit year and are otherwise eligible to claim UC [Unemployment Compensation] under Texas law.”