This bill modernizes unemployment insurance by federally funding extended benefits, establishing national minimum standards for regular benefits, and creating a new federal Jobseeker Allowance program.
Ron Wyden
Senator
OR
The Unemployment Insurance Modernization and Recession Readiness Act comprehensively overhauls the nation's unemployment system by strengthening federal support during downturns, establishing robust national minimum standards for regular benefits, and creating a new federal Jobseeker Allowance program. Title I modernizes extended benefits by shifting costs to the federal government and updating activation triggers, while Title II mandates a 26-week minimum duration and eliminates the waiting week for regular state benefits. Finally, Title III establishes a new, federally funded Jobseeker Allowance starting in 2027 to provide ongoing support to those actively seeking work.
UI Modernization Bill Sets 26-Week Minimum Unemployment Pay and Launches New $250/Week Jobseeker Allowance
This massive piece of legislation, the Unemployment Insurance Modernization and Recession Readiness Act, is essentially a complete overhaul of the American safety net for the unemployed. It sets up federal minimum standards for state unemployment benefits (UI) and creates a brand-new federal allowance for job seekers. For the millions of people who have lost a job or worry about being laid off, this bill is a game-changer, though most changes won’t kick in until January 1, 2027, unless your state acts fast.
The New Floor: UI Benefits Get a Serious Upgrade
For decades, states have been racing to the bottom on unemployment benefits, leaving many workers with short time limits and low weekly checks. This bill slams the brakes on that trend by establishing federal floors that states must meet. First, Sec. 201 mandates that states must offer a minimum of 26 weeks of unemployment benefits. If you live in one of the states that currently offers only 12 or 14 weeks, this means you get a much longer runway to find your next job.
Second, the bill sets floors for the actual dollar amount you receive. Sec. 203 requires that the maximum weekly benefit a state offers cannot be less than two-thirds (66.7%) of that state’s average weekly wage. This is a huge deal for keeping benefits aligned with the cost of living. Furthermore, Sec. 202 establishes a minimum replacement rate, ensuring your weekly check is based on at least 75% of your earnings from your highest-paid quarter, divided by 13. Translation: if you had a strong quarter, the state can’t lowball your weekly benefit.
Quitting Your Job Just Got Less Risky
One of the most frustrating parts of the current UI system is the penalty for quitting voluntarily. Sec. 206 dramatically expands the definition of “good cause” for quitting, meaning you won't be disqualified from benefits if you leave for a “compelling reason.” This includes situations that reflect modern life and responsibilities, like needing to care for a sick family member, losing childcare with no reasonable alternative, or moving with a spouse for their new job outside your commuting area.
Crucially, if you quit because you reasonably believe your employer violated state or federal law regarding wages, discrimination, or safety, that also counts as good cause. This provision gives workers a significant new layer of protection and leverage against bad actors. Plus, Sec. 208 eliminates the mandatory waiting week before benefits start, meaning money hits your account faster when you need it most.
Recession Ready: Fully Federal Extended Benefits
Title I focuses on what happens when the economy tanks. The bill fixes the broken Extended Benefits (EB) program, which is supposed to kick in during severe job market crises but often doesn't. Sec. 102 makes it much easier to trigger EB by lowering the threshold to a 5.5% unemployment rate (either state or national). It also introduces new tiers of benefits, allowing for up to 52 weeks of extended payments in the worst downturns, a massive increase from the current standard.
Most importantly, Sec. 101 shifts the cost burden. The federal government will now cover 100% of the cost of these extended benefits. This is a huge win for states, which often resist triggering EB because they have to share the cost. However, there’s a catch: states only get the 100% funding if they agree not to charge the cost of those extended benefits back to the employer through experience ratings. This provision ensures that employers aren't penalized for a national recession, but it also means states have to adjust their accounting to secure the full federal funding.
The New Jobseeker Allowance: A Safety Net for the Gaps
Title III creates the Jobseeker Allowance, a new federal program designed to catch people who often fall through the cracks of traditional UI. Starting at $250 per week in 2027 (Sec. 301), this allowance is available to the unemployed, the underemployed, and even the self-employed, provided they are actively looking for work and meet certain income criteria. This is a massive shift, finally acknowledging the reality of the gig economy and the self-employed.
For those who qualify, the allowance is protected: it will not count as income when determining eligibility for other federal, state, or local aid programs for the first 13 months. This protection is critical, ensuring that getting a temporary allowance doesn't accidentally disqualify a family from SNAP benefits or housing assistance. Like the extended benefits, the federal government covers 100% of the cost of this new allowance, easing the financial burden on states.