Should employers share the financial burden faced by the family of a soldier who must move because he/she is transferred to a new duty station in the U.S. Armed Forces? This is an interesting public policy issue which we have not heard discussed. However, we have observed a trend to shift part of the cost of relocation (lost wages) to employers, and to use the unemployment compensation program for this purpose.
In the last twelve months five state unemployment laws have been changed to specifically permit the payment of unemployment benefits to the person who is compelled to resign because of his/her spouse’s military obligations. Historically, most state unemployment laws have imposed a disqualification for unemployment benefits when an individual quits for non-work-related reasons unless there is a “good cause” exception, and such exceptions are limited. However, a clear trend has developed to make such an exception for a soldier’s spouse.
Arkansas law was amended on March 26, 2007, to provide that no individual may be disqualified for voluntarily leaving to move with a spouse who is in military service to a new duty station, if the individual has made a reasonable effort to preserve his/her job. South Carolina law was amended on June 7, 2007 to permit benefits for the same reason, provided that the separation from employment occurs within fifteen days of the scheduled relocation date. Connecticut and New Mexico laws were changed effective July 1, 2007. The Connecticut provision granting benefits will expire on June 30, 2008 unless renewed. The New Mexico law is more expansive, in that it applies to a worker who resigns because his/her spouse who is in the military service or the New Mexico National Guard receives a permanent change of station orders, activation orders, or unit deployment orders. Finally, Montana law was amended October 1, 2007 to permit benefits when an individual leaves employment because of the mandatory military transfer of the individual’s spouse. In a new wrinkle, the Montana amendment also grants relief from charges to the employer when an employee is laid off, thus qualifying for benefits, because of the return to work of a permanent employee who was called to military service.
This is an issue on which the federal unemployment law is silent. Since there is no national directive, the state unemployment laws deal with it in an inconsistent manner. In addition to the five states discussed above, Florida, Georgia, and Texas laws contain specific provisions approving unemployment claims for military spouses who are forced to move. Colorado law has a more limited provision, approving claims when a person quits to relocate as a result of the spouse’s transfer for medical reasons in time of war or armed conflict. A few other states generally grant benefits to the military spouse who is forced to move, even though there is no specific legal provision. These states include California, Kansas, Maine, New York, and Washington.
Payment of unemployment benefits to military spouses raises the question of whether their employers’ tax accounts should be charged for such benefits. State unemployment laws tend to grant the employer relief from charges in this situation, but this does not mean that the cost evaporates. When relief from charges is granted, the cost of such benefits is not assigned to a specific employer, but is nonetheless borne by the state’s trust fund and spread among all tax-paying employers in the state. Such “socialized costs” put upward pressure on the tax rates assigned to all experience-rated employers. Employers in states with a large military presence will bear a disproportionate share of this cost. Perhaps overlooked is the fact that the employer whose worker must relocate has the burden of hiring and training a replacement.
Viewed from the perspective of the military family transferring to a new duty station, some will have the support of unemployment compensation resulting from the civilian spouse’s work history and others will not, depending on the law of the state from which they are transferring.
Whether or not you find this trend to be an appropriate use of the unemployment compensation program, it is a good example of how the program has the capacity to adapt to changing times and continues to meet the needs of unemployed workers since the first benefits were paid to Mr. Neels Ruud in Wisconsin, on August 17, 1936, in the amount of $15.00.
UI Compensation for Military Spouses