DIRECTIVE	:	UNEMPLOYMENT INSURANCE PROGRAM LETTER NO. 26-00
TO	:	ALL STATE EMPLOYMENT SECURITY AGENCIES
FROM	:	GRACE A. KILBANE Administrator Office of Workforce Security
SUBJECT	:	Model State Legislation and Commentary to aid States implementing Birth and Adoption Unemployment Compensation Unemployment Compensation (BAA-UC)

1. Purpose. To provide Model State Legislation and Commentary for States implementing BAA-UC. The Model State Legislation is offered as a guide for States that need to amend their current UC laws, it is not required. The Commentary provides information on the Model State Legislation and will aid States in making policy decisions.

2. References. 20 Code of Federal Regulations (CFR) parts 604, 615, and 625; sections 303(a)(1) and (8), Social Security Act (SSA); Unemployment Insurance Program Letters (UIPLs) No. 21-80 and No. 44-93; Family and Medical Leave Act, Pub. Law 103-3; the Manual of Employment Securit~Legislation (rev. 1950); UIPL No.787 transmitting the Secretary of Labor's Decision of September 25,1964, In the Matter of the Hearing to the South Dakota Department of Employment Security Pursuant to Section 330411) of the Internal Revenue Code of 1954: and Jenkins v. Bowling, 691 F.2d 1225 (7th Cir. 1982).

3. Background. The Department of Labor (Department) created, by regulation, an opportunity for State agencies that administer the UC program to pay, as part of a voluntary, experimental effort, UC to parents who take time off from employment after the birth or placement for adoption of a child. (20 CFR Part 604.) This regulation allows States the opportunity to develop innovative ways of using UC to support parents taking approved leave or who otherwise leave their employment to be with their newborns or newly-adopted children and will permit us to evaluate the effectiveness of using the UC program for these or related purposes.

4. Model-State Legislation. The attached Model State Legislation is offered as an optional aid for States that choose to enact BAA-UC. The Model State Legislation assumes that States will provide BAA-UC based on the same earnings and employment criteria that apply to other individuals. It also assumes that States will provide BAA-UC for no more than 12 weeks; that BAA-UC payments will count toward the maximum number of weeks:of UC, and that employers will not be charged for BAA-UC. Further, the Model State Legislation provides for the deduction of other income from BAA-UC. The Model State Legislation conforms to the regulations at 20 CFR Part 604; however, States have wide latitude in creating their BAA-UC provisions within the parameters of those regulations.

5. Commentary. A Commentary in question-and-answer format is also attached (Attachment II) as an aid for States. The Commentary discusses policy approaches taken in the Model State Legislation and also discusses other matters.

6. Action. We suggest that States consider developing a BAA-UC experiment to provide partial wage replacement to parents on approved leave or who otherwise leave employment to be with their newborns and newly-adopted children. We expect that States will take into consideration the impact of such an effort on their unemployment funds prior to enactment. Appropriate staff should be provided with this UIPL.

7. Inquiries. Please direct inquiries to the appropriate Regional Office.

   Attachment I - Model State Legislation

   Attachment II - Commentary