Unemployment Insurance and Special Employee Protection Programs

Providing special assistance to certain groups impacted by federal policies is a complex and controversial question. GAO reviewed two such special assistance programs, the Redwood Employee Protection Program and the title V Program of the Regional Rail Reorganization Act of 1973. Although these special assistance programs had common objectives, they did not have consistent eligibility requirements, benefits, or benefit periods. Some employees covered by the programs told GAO they had little financial need to work because the programs replaced over 75 percent of their income. This has resulted in a reduction in the employee's incentive to work. Administering the programs was difficult and cumbersome. Identifying adversely affected workers was often difficult, and the delivery of assistance to workers was complicated by the complex benefit determination process. GAO recommended that a uniform approach be used to provide special assistance to groups adversely affected by federal policies. Such an approach would require that workers exhaust regular unemployment compensation benefits before receiving the additional cash benefits. To lessen the disincentive to employment, the special benefits should be at the same rate as regular unemployment compensation, rather than the higher rate. This approach would help eliminate some of the administrative costs and problems associated with the delivery of program benefits. GAO further recommended that uniform eligibility standards and methods for determining compensation amounts be established so that all recipients are treated equally.