Colorado governor signs law to direct federal funds to repay unemployment insurance debt

Colorado Gov. Jared Polis (D) on May 25 signed SB22-234, which will direct $600 million of federal American Rescue Plan Act (ARPA) funds to help pay back the state’s $1 billion unemployment insurance trust fund debt to the federal government.

The law will also forgive certain non-fraud overpayments, meaning some workers who received more unemployment insurance payments than they were owed during the coronavirus pandemic will not have to pay the money back. The law also contains provisions allowing claimants to work part-time and make up to half their previous incomes without a benefit reduction and allowing unlawful U.S. immigrants to claim unemployment insurance benefits if their employer pays unemployment taxes.

The $600 million funding aims to reduce the unemployment insurance tax burden on employers, which increased in 2022 and was slated to increase in 2023 if the fund’s solvency did not improve.

Unemployment insurance is a joint federal and state program that provides temporary monetary benefits to eligible laid-off workers who are actively seeking new employment. Qualifying individuals receive unemployment compensation as a percentage of their lost wages in the form of weekly cash benefits while they search for new employment.

The federal government oversees the general administration of state unemployment insurance programs. The states control the specific features of their unemployment insurance programs, such as eligibility requirements and length of benefits.

For more information on Colorado’s unemployment insurance program, click here. For information about unemployment insurance programs across the country, click here.

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