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On The Dol

Unemployment for newborns

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This story appears in the February 2001 issue of Entrepreneur. Subscribe »

If the (DOL) has its way, new parents will soon get a slice of state insurance (UI) money. The "Birth and Adoption Unemployment Compensation" proposal went into effect in August 2000 and allows states to initiate programs using their UI funds to pay out birth and adoption benefits.

Not surprisingly, business groups are crying foul. The , the Society of Human Resource Management and labor policy organization LPA responded to the proposal by filing a civil suit to fight it. "This opens up [benefits] to a whole new class of workers, not ones who are unemployed and looking for work, which is the premise the program is built on. It's an inappropriate use of UI funds," says Randel Johnson, U.S. Chamber vice president for labor and . The U.S. Chamber asserts that the proposal hurts the safety net for the unemployed, and employers will eventually have to pay higher UI taxes. Sally Paxton, a deputy solicitor at the DOL, contends the heart of the case is whether the DOL has the right to change the rules. "We enforce and interpret the [UI] statutes, and we are confident we have the authority to do this."

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