Building Resilience Action Area 1: Adequately Funding UI Administration
This report outlines the U.S. Department of Labor’s comprehensive action plan to strengthen the unemployment insurance (UI) system by addressing chronic underfunding and proposing legislative reforms to support long-term modernization and resilience.
As part of the broader Building Resilience transformation strategy, this section focuses on Action Area 1: Adequately Funding UI Administration.
It details how persistent underfunding has constrained state UI systems, limiting their ability to modernize, staff appropriately, and prevent fraud. The Department of Labor updated its funding formula in FY 2022 to better reflect real administrative costs, and it is now evaluating funding levels and distribution mechanisms through a multi-phase study. The report also proposes legislative reforms, including fully funding the President’s FY 2025 Budget Request, enabling more practical enforcement tools, and allowing states to reinvest recovered overpayments into program integrity improvements.
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