Two months ago, the President signed the Middle Class Tax Relief and Job Creation Act of 2012.  That legislation extended the vital payroll tax cut and federal unemployment insurance programs that have been so crucial for American families and to the continued and sustained economic recovery.   But it also included several important reforms to the Unemployment Insurance system that didn’t grab the headlines the day it passed.

The Obama Administration is committed to finding new and innovative ways to turn the unemployment system into a reemployment system.  States, as laboratories of democracy, can play a crucial role in developing creative strategies that help us accomplish this goal in ways that may inform the policies of other states and the federal government in the future.   

Today, I had the privilege to announce guidance to states interested in developing demonstration projects to help their unemployed obtain jobs faster and more efficiently.   These demonstrations are a key component in the first major overhaul of the Unemployment Insurance system in decades. 

Through this initiative, 10 states will have the opportunity to develop new and creative ways to help recipients of UI funds get back to work faster.  These states will design programs that help the unemployed get back to work, while lowering costs and ensuring that all participants receive the same worker protections.  This will create a level playing field for employers who follow the rules and have their employees’ welfare in mind.

The Labor Department is preparing to announce more guidance in the coming months that further improve the functionality of the UI system.  These reforms will provide states with more flexibility to respond to changes in the economy, provide employers tools to avoid layoffs, help the unemployed get back into the workforce faster and even expand opportunities for the unemployed to start their own businesses.

Authored by Secretary Hilda Solis