The APA Government Relations Task Force (GRTF) formed a workgroup on unemployment insurance (UI) to consider the Federal Unemployment Tax Act (FUTA) and State Unemployment Tax Act (SUTA) and insolvency of state funds, infrastructure of the UI system, the role of payroll professionals and their employers, potential partnerships with other groups and organizations interested in UI, appropriate action by the APA, and any other UI‑related topics raised by participants.
Despite changes to FUTA over time, the basic program structure remains from 1939. In addition, the program was designed for employer contributions through employment taxes because of the role employers play in involuntary unemployment. Thus, employees who voluntarily leave their jobs or are fired for misconduct are ineligible for UI compensation. However, when involuntary unemployment is caused by natural disasters, pandemics, and related government orders, employers are also not the cause, similar to employee voluntary termination and misconduct, yet FUTA taxes are still imposed.
The APA believes that the structure of the FUTA should be reviewed to consider the current labor market, role of employers, state insolvency, and impacts of unpredictable situations. Payroll professionals are engaged in their employers’ UI compliance such that their expertise lends credibility to APA’s FUTA and SUTA recommendations. APA’s Government Relations team and GRTF members lobby on both a federal and state level.
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Alice P. Jacobsohn, Esq. is Director of Government Relations for the APA.
