Unemployment Reform

1. Require A One-Week Waiting Period Before Unemployment Benefits Start

2. Index Unemployment Benefits to the Current Job Market


Iowa should require a 1-week waiting period before unemployment benefits go into effect. This allows a small amount of additional time for Iowa Workforce Development to verify eligibility before checks go into the mail. The vast majority of states in the United States have already enacted a 1-week waiting period, including every state that borders Iowa. This would save roughly $24 million annually in the unemployment insurance fund, which could result in lower average payroll taxes for employers, helping ease the financial pressures businesses are presently facing.

Further, Iowa should move to a system that indexes unemployment benefits relative to the current job market. Presently, Iowa allows unemployed individuals to collect unemployment benefits for up to 26 weeks (excluding the 39 weeks allowed in the event of a permanent business closure). Given the current job market, that is an excessive amount of time to allow individuals to remain on unemployment. Indexing unemployment would take the current job market into consideration and automatically adjust the maximum benefit period relative to the unemployment rate, reducing the maximum amount of time in periods of low unemployment and increasing the maximum amount of time in periods of high unemployment. This reform could help reduce the amount of time individuals spend on unemployment and help get Iowans back to work faster, addressing our present workforce shortage and reducing stress on the unemployment insurance benefit trust fund.


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