I 

110TH CONGRESS 

1ST SESSION H. R. 2202 

To amend the Social Security Act to provide for wage insurance for dislocated 

workers. 

IN THE HOUSE OF REPRESENTATIVES 

MAY 8, 2007 

Mr. MCDERMOTT introduced the following bill; which was referred to the 

Committee on Ways and Means 

A BILL 

To amend the Social Security Act to provide for wage 

insurance for dislocated workers. 

1 Be it enacted by the Senate and House of Representa2 tives of the United States of America in Congress assembled, 

3 SECTION 1. SHORT TITLE; TABLE OF CONTENTS. 

4 (a) SHORT TITLE.—This Act may be cited as the 

5 ‘‘Worker Empowerment Act’’. 

6 (b) TABLE OF CONTENTS.—The table of contents is 

7 as follows: 

Sec. 1. Short title; table of contents. 

TITLE I—REEMPLOYMENT ADJUSTMENT ASSISTANCE 

Sec. 101. Establishment of programs. 

Sec. 102. Administrative costs. 

Sec. 103. Technical assistance. 


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Sec. 104. Reports to Congress. 

Sec. 105. Effective date. 

TITLE II—WAGE INSURANCE CONTRIBUTIONS 

Sec. 201. Wage insurance contributions. 

1 TITLE I—REEMPLOYMENT 

2 ADJUSTMENT ASSISTANCE 

3 SEC. 101. ESTABLISHMENT OF PROGRAMS. 

4 (a) IN GENERAL.—Section 303 of the Social Security 

5 Act (42 U.S.C. 503) is amended by adding at the end the 

6 following: 

7 ‘‘(l)(1) Each State (through the State agency charged 

8 with the administration of the State law of such State) 

9 shall, not earlier than January 1, 2009, and not later than 

10 2 years after the date of the enactment of this subsection, 

11 implement a reemployment adjustment assistance pro12 gram that provides the benefits described in paragraph 

13 (2). 

14 ‘‘(2)(A) A State shall use the funds provided to the 

15 State under section 101(b) of the Worker Empowerment 

16 Act to pay to an individual described in paragraph (3) the 

17 amount equal to 50 percent of the amount by which— 

18 ‘‘(i) the wages received by such individual at 

19 the time of the separation described in paragraph 

20 (3)(A), as certified by the State in accordance with 

21 subparagraph (B), exceeds (if at all) 


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1 ‘‘(ii) the wages received by such individual from 

2 reemployment, as certified by the State in accord3 ance with subparagraph (C). 

4 ‘‘(B) For purposes of subparagraph (A)(i)— 

5 ‘‘(i) the wages received by an individual at the 

6 time of separation shall be computed based on the 

7 wages received by such individual for the 52-week 

8 period ending before the date of separation; and 

9 ‘‘(ii) a certification under subparagraph (A)(i) 

10 as to the amount of those wages so received shall be 

11 based on (I) information collected directly from the 

12 person or persons employing such individual during 

13 the 52-week period before the date of separation, 

14 (II) statements of earnings submitted by the indi15 vidual (as provided to such individual by the person 

16 or persons referred to in subclause (I)), or (III) ap17 plicable wage data collected by the State. 

18 ‘‘(C) For purposes of subparagraph (A)(ii)— 

19 ‘‘(i) the wages received by an individual from 

20 reemployment— 

21 ‘‘(I) shall be initially certified using wages 

22 received for the individual’s first full week of re23 employment; and 


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1 ‘‘(II) shall thereafter be periodically recer2 tified, to reflect any changes in wages, not more 

3 than quarterly; and 

4 ‘‘(ii) a certification under subparagraph (A)(ii) 

5 as to the amount of wages received from reemploy6 ment shall be based on (I) statements of earnings 

7 submitted by the individual (as provided by the re8 employing entity) or (II) applicable wage data col9 lected by the State. 

10 ‘‘(D)(i) To the extent that a State makes its certifi11 cations under subparagraph (A)(i) on the basis of infor12 mation obtained pursuant to subparagraph (B)(ii)(I) or 

13 (II), the State shall regularly conduct random audits 

14 against relevant information obtained pursuant to sub15 paragraph (B)(ii)(III). 

16 ‘‘(ii) To the extent that a State makes its certifi17 cations under subparagraph (A)(ii) on the basis of infor18 mation obtained pursuant to subparagraph (C)(ii)(I), the 

19 State shall regularly conduct random audits against rel20 evant information obtained pursuant to subparagraph 

21 (C)(ii)(II). 

22 ‘‘(E)(i) Notwithstanding any other provision of this 

23 paragraph— 

24 ‘‘(I) for purposes of computing benefits in the 

25 case of an individual to whom clause (ii) applies, 


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1 subparagraph (A) shall be applied by substituting 

2 the applicable percentage under clause (ii)(II) for 

3 ‘50 percent’; and 

4 ‘‘(II) for purposes of computing benefits in the 

5 case of an individual to whom clause (iii) applies, 

6 subparagraph (A) shall be applied by substituting 

7 the applicable percentage under clause (iii)(II) for 

8 ‘50 percent’. 

9 ‘‘(ii)(I) This clause applies in the case of any indi10 vidual whose weekly wages at the time of separation (de11 termined based on the amount most recently certified with 

12 respect to such individual under subparagraph (A)(i)) ex13 ceed the contribution and benefit base (as determined 

14 under section 230 of the Social Security Act) which is ef15 fective with respect to the year which includes the last day 

16 of the 52-week period on the basis of which weekly wages 

17 are computed. 

18 ‘‘(II) The applicable percentage under this subclause 

19 is, with respect to any individual, the percentage obtained 

20 by subtracting from 50 percent the product of 2.5 times 

21 the lesser of the percentage by which the individual’s 

22 weekly wages at the time of separation (as described in 

23 subclause (I)) exceeds the contribution and benefit base 

24 (as so described) or 20 percent. 


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1 ‘‘(iii)(I) This clause applies in the case of any indi2 vidual whose weekly wages from reemployment (deter3 mined based on the amount most recently certified with 

4 respect to such individual under subparagraph (A)(ii)) are 

5 less than 50 percent of the median of weekly wages within 

6 the individual’s State (determined in accordance with any 

7 regulations prescribed by the Secretary of Labor), except 

8 as provided in subclause (III). 

9 ‘‘(II) The applicable percentage under this subclause 

10 is, with respect to any individual, the percentage equal to 

11 the sum of 50 percent plus one-quarter of the number of 

12 percentage points by which the individual’s weekly wages 

13 from reemployment (as described in subclause (I) and ex14 pressed as a percentage relative to the median of weekly 

15 wages within the individual’s State (as so described)) is 

16 less than 50 percent. 

17 ‘‘(III) This clause shall not apply in the case of any 

18 individual who is subject to clause (ii). 

19 ‘‘(F) Benefits under any program described in para20 graph (1) shall be payable on at least a monthly basis. 

21 ‘‘(3) An individual shall not be eligible for benefits 

22 under any program described in paragraph (1) unless such 

23 individual— 

24 ‘‘(A) is separated from employment with an em25 ployer that employed such individual continuously 


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1 for at least the 2-year period before the date of sep2 aration either— 

3 ‘‘(i) involuntarily (other than for cause); or 

4 ‘‘(ii) voluntarily under circumstances which 

5 would, by virtue of the terms of a collective bar6 gaining agreement, satisfy the relevant State 

7 law requirements relating to the type of separa8 tion from employment that is required in order 

9 to be eligible for unemployment compensation; 

10 ‘‘(B) is reemployed for substantially the same 

11 number of hours each pay period as at the time of 

12 separation; and 

13 ‘‘(C) is not reemployed by the employer from 

14 which the individual was separated. 

15 ‘‘(4) The benefits described in paragraph (2) shall 

16 not, in the case of any individual, be payable— 

17 ‘‘(A) by virtue of any separation, beyond the 

18 date that occurs 2 years after the date of such sepa19 ration; or 

20 ‘‘(B) in an amount exceeding $10,000 for either 

21 year of the 2-year period that begins on the date of 

22 such separation. 

23 ‘‘(5) For purposes of this subsection— 


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1 ‘‘(A) the term ‘wages’ means all cash or cash 

2 equivalent remuneration (as defined by the Secretary 

3 of Labor) for employment, excluding any tips; 

4 ‘‘(B) the term ‘employment’ means any service 

5 performed within the United States for an employer 

6 by an individual who is a citizen of the United 

7 States or who is authorized to work in the United 

8 States; and the term ‘United States’, when used in 

9 this subparagraph in a geographical sense, includes 

10 the States, the District of Columbia, the Common11 wealth of Puerto Rico, and the Virgin Islands; 

12 ‘‘(C) the term ‘employer’ includes each em13 ployer, as defined by the State law of the State con14 cerned; and 

15 ‘‘(D) the term ‘pay period’, with respect to an 

16 individual, means a period (of not more than 31 con17 secutive days) for which a payment of remuneration 

18 is ordinarily made to the individual by the person 

19 employing such individual. 

20 ‘‘(6) Not later than December 31, 2008, the Sec21 retary of Labor shall by regulation establish guidelines to 

22 provide for the uniform application of paragraph (3).’’. 

23 (b) PAYMENTS TO STATES.— 

24 (1) IN GENERAL.—There shall be paid to each 

25 State which has a reemployment adjustment assistVerDate Aug 31 2005 05:53 May 09, 2007 Jkt 059200 PO 00000 Frm 00008 Fmt 6652 Sfmt 6201 E:\BILLS\H2202.IH H2202

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1 ance program that (in the judgment of the Secretary 

2 of Labor) meets the requirements of section 303(l) 

3 of the Social Security Act, as amended by subsection 

4 (a), an amount equal to 100 percent of the benefits 

5 paid to individuals by such State under such pro6 gram. 

7 (2) ESTIMATION, FREQUENCY, ETC. OF

8 AMOUNTS PAYABLE.—Sums payable to any State 

9 under this subsection shall be payable, either in ad10 vance or by way of reimbursement (as determined by 

11 the Secretary of Labor), in such amounts as the 

12 Secretary estimates the State will be entitled to re13 ceive under this subsection for each calendar month, 

14 reduced or increased, as the case may be, by any 

15 amount which the Secretary finds that the estimates 

16 of the Secretary for any prior calendar month were 

17 greater or less than the amounts which should have 

18 been paid to the State. Estimates shall be made on 

19 such basis as the Secretary considers appropriate. 

20 (3) CERTIFICATION AND PAYMENT OF

21 AMOUNTS.—The Secretary of Labor shall, from time 

22 to time, certify to the Secretary of the Treasury the 

23 sum payable to each State under this subsection. 

24 The Secretary of the Treasury, prior to audit and 

25 settlement by the Government Accountability Office, 


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1 shall make payments to the State in accordance with 

2 the certification from amounts available in the Wage 

3 Insurance Trust Fund under section 9511 of the In4 ternal Revenue Code of 1986. 

5 (4) LIMITATION ON USE OF AMOUNTS RE6 CEIVED.—Money paid to a State under this sub7 section may be used solely for the purpose of paying 

8 benefits described in paragraph (1). Money so paid 

9 which is not used for such purpose shall be returned, 

10 at the time specified by the Secretary of Labor, to 

11 the Treasury of the United States and credited to 

12 the Wage Insurance Trust Fund. 

13 (5) STATE DEFINED.—For purposes of this 

14 subsection, the term ‘‘State’’ has the meaning given 

15 such term under section 205 of the Federal-State 

16 Extended Unemployment Compensation Act of 

17 1970. 

18 (6) RULE OF CONSTRUCTION.—Nothing in this 

19 subsection shall prevent or limit any distribution of 

20 amounts from the Wage Insurance Trust Fund for 

21 reasonable costs associated with the implementation 

22 and operation of reemployment adjustment assist23 ance programs (as described in section 303(l) of the 

24 Social Security Act) or for any other purpose (other 


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1 than the payment of benefits) allowable under sec2 tion 9511 of the Internal Revenue Code of 1986. 

3 (c) CONFORMING AMENDMENT.—Section 303(a) of 

4 the Social Security Act (42 U.S.C. 503(a)) is amended— 

5 (1) by striking the period at the end of para6 graph (10) and inserting ‘‘; and’’; and 

7 (2) by adding at the end the following: 

8 ‘‘(11) A reemployment adjustment assistance 

9 program that meets the requirements of subsection 

10 (l).’’. 

11 SEC. 102. ADMINISTRATIVE COSTS. 

12 Section 302(a) of the Social Security Act (42 U.S.C. 

13 502(a)) is amended by striking the period at the end of 

14 the first sentence and inserting ‘‘and 100 percent of so 

15 much of the reasonable expenditures of the State as are 

16 attributable to the costs of the implementation and oper17 ation of its reemploment adjustment assistance program 

18 (as described in section 303(l)).’’. 

19 SEC. 103. TECHNICAL ASSISTANCE. 

20 The Secretary of Labor shall provide technical assist21 ance and advice to assist the States in implementing the 

22 reemployment adjustment assistance programs required 

23 under the amendments made by this title. 


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1 SEC. 104. REPORTS TO CONGRESS. 

2 (a) INITIAL REPORT.—Not later than 3 years after 

3 the date of the enactment of this Act, the Secretary of 

4 Labor shall submit to Congress a report on the operation 

5 and effectiveness of the reemployment adjustment assist6 ance programs required under the amendments made by 

7 this title. 

8 (b) ANNUAL REPORTS.—Not later than 4 years after 

9 the date of the enactment of this Act, the Secretary of 

10 Labor shall submit to Congress the first of 5 annual re11 ports. Each such report shall include a detailed analysis 

12 of the following: 

13 (1) The average annual income from wages that 

14 individuals receiving reemployment adjustment as15 sistance from programs under section 303(l) of the 

16 Social Security Act (hereinafter ‘‘beneficiaries of the 

17 Worker Empowerment Act’’) earned in the 2 years 

18 prior to employment dislocation, and the average 

19 quarterly income of such individuals in the 2 years 

20 following reemployment. 

21 (2) The average amount of quarterly benefits 

22 provided to beneficiaries of the Worker Empower23 ment Act from programs under section 303(l) of the 

24 Social Security Act, and the average duration of 

25 those benefits. 


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1 (3) The average duration of unemployment ex2 perienced by beneficiaries of the Worker Empower3 ment Act before becoming eligible for benefits de4 scribed in paragraph (2). 

5 (4) Whether beneficiaries of the Worker Em6 powerment Act accepted lower-wage employment 

7 that they would otherwise have refused (if this Act 

8 had not been enacted), and whether such employ9 ment would have been refused in the absence of the 

10 receipt of unemployment compensation. 

11 (5) To what extent beneficiaries of the Worker 

12 Empowerment Act displaced lower-skilled workers 

13 seeking the same job. 

14 (6) To what extent employers paid lower wages 

15 than they would otherwise have because of the im16 plementation of the reemployment adjustment assist17 ance programs described in section 303(l) of the So18 cial Security Act. 

19 SEC. 105. EFFECTIVE DATE. 

20 Nothing in this title or in any amendment made by 

21 this title shall be considered to permit or require the pay22 ment of reemployment adjustment assistance benefits— 

23 (1) based on any separation from employment 

24 taking effect before January 1, 2009; or 


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1 (2) to supplement remuneration for employment 

2 performed in any pay period beginning before the 

3 commencement date of the program under which 

4 such benefits would be payable. 

5 TITLE II—WAGE INSURANCE 

6 CONTRIBUTIONS 

7 SEC. 201. WAGE INSURANCE CONTRIBUTIONS. 

8 (a) IN GENERAL.—Subtitle C of the Internal Rev9 enue Code of 1986 (relating to employment taxes) is 

10 amended by adding at the end the following new chapter: 

11 ‘‘CHAPTER 26—WAGE INSURANCE 

12 CONTRIBUTIONS 

‘‘CHAPTER 26—WAGE INSURANCE CONTRIBUTIONS

‘‘Sec. 3601. Rate of tax. 

13 ‘‘SEC. 3601. RATE OF TAX. 

14 ‘‘(a) IN GENERAL.—In addition to other taxes, there 

15 is hereby imposed on every employer an excise tax, with 

16 respect to having individuals in his employ, equal to 0.06 

17 percent of the wages (as defined in section 3401(a)) paid 

18 by him with respect to employment. 

19 ‘‘(b) LIMITATION.—The amount of wages taken into 

20 account under subsection (a) with respect to an employee 

21 for a calendar year shall not exceed the contribution and 

22 benefit base (as determined under section 230 of the So23 cial Security Act) which is effective with respect to such 

24 year. 


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1 ‘‘(c) APPLICABLE RULES.—For purposes of this 

2 chapter, rules similar to the rules of sections 3122, 3123, 

3 3125, 3126, and 3127 shall apply.’’. 

4 (b) ESTABLISHMENT OF WAGE INSURANCE TRUST

5 FUND.—Subchapter A of chapter 98 of such Code (relat6 ing to trust fund code) is amended by adding at the end 

7 the following: 

8 ‘‘SEC. 9511. WAGE INSURANCE TRUST FUND. 

9 ‘‘(a) CREATION OF TRUST FUND.—There is estab10 lished in the Treasury of the United States a trust fund 

11 to be known as the ‘Wage Insurance Trust Fund’ (re12 ferred to in this section as the ‘Trust Fund’), consisting 

13 of such amounts as may be appropriated or credited to 

14 the Trust Fund as provided in this section or section 

15 9602(b). 

16 ‘‘(b) TRANSFERS TO TRUST FUND.—There is hereby 

17 appropriated to the Trust Fund an amount equivalent to 

18 the taxes received in the Treasury under section 3601. 

19 ‘‘(c) DISTRIBUTION OF AMOUNTS IN TRUST FUND.— 

20 Amounts in the Trust Fund shall be available without fur21 ther appropriation to make expenditures to carry out— 

22 ‘‘(1) section 303(l), and so much of section 

23 302(a), of the Social Security Act as relates to the 

24 implementation and operation of the program under 

25 such section 303(l), and 


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1 ‘‘(2) the Worker Empowerment Act. 

2 ‘‘(d) AUTHORITY TO BORROW.— 

3 ‘‘(1) IN GENERAL.—There are authorized to be 

4 appropriated to the Trust Fund, as repayable ad5 vances, such sums as may be necessary to carry out 

6 the purposes of the Trust Fund. 

7 ‘‘(2) LIMITATION ON AGGREGATE ADVANCES.— 

8 The maximum aggregate amount of repayable ad9 vances to the Trust Fund which is outstanding at 

10 any one time shall not exceed an amount equal to 

11 the amount which the Secretary estimates will be 

12 equal to the sum of the amounts appropriated to the 

13 Trust Fund under subsection (b) during the fol14 lowing 24 months. 

15 ‘‘(3) REPAYMENT OF ADVANCES.— 

16 ‘‘(A) IN GENERAL.—Advances made to the 

17 Trust Fund shall be repaid, and interest on 

18 such advances shall be paid, to the general fund 

19 of the Treasury when the Secretary determines 

20 that moneys are available for such purposes in 

21 the Trust Fund. Any amount transferred as a 

22 repayment under this subsection shall be cred23 ited against, and shall operate to reduce, any 

24 balance of advances repayable under this sub25 section. 


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1 ‘‘(B) RATE OF INTEREST.—Interest on ad2 vances made to the Trust Fund shall be— 

3 ‘‘(i) at a rate determined by the Sec4 retary (as of the close of the calendar 

5 month preceding the month in which the 

6 advance is made) to be equal to the cur7 rent average market yield on outstanding 

8 marketable obligations of the United 

9 States with remaining periods to maturity 

10 comparable to the anticipated period dur11 ing which the advance will be outstanding, 

12 and 

13 ‘‘(ii) compounded annually.’’. 

14 (c) CONFORMING AMENDMENTS.— 

15 (1) Section 6302(b) of such Code is amended 

16 by inserting ‘‘26,’’ after ‘‘21,’’. 

17 (2) Section 6513(c) of such Code is amended by 

18 striking ‘‘or 24’’ and inserting ‘‘24, or 26’’. 

19 (3) Section 7507(d) of such Code is amended is 

20 amended by striking ‘‘chapter 21 or chapter 23’’ and 

21 inserting ‘‘chapter 21, 23, or 26’’. 

22 (4) Section 7509 of such Code by adding at the 

23 end the following new sentence: ‘‘The preceding sen24 tence shall apply with respect to the tax imposed by 

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1 plies to the tax imposed with respect to chapter 

2 21.’’. 

3 (d) CLERICAL AMENDMENTS.— 

4 (1) The table of chapters for subtitle C of such 

5 Code is amended by adding at the end the following 

6 new item: 

‘‘CHAPTER 26. WAGE INSURANCE CONTRIBUTIONS.’’. 

7 (2) CONFORMING AMENDMENT.—The table of 

8 sections for subchapter A of chapter 98 of such 

9 Code is amended by adding at the end the following: 

‘‘Sec. 9511. Wage Insurance Trust Fund.’’. 

10 (e) EFFECTIVE DATE.—The amendments made by 

11 this section shall apply to wages paid after December 31, 

12 2007. 

Æ 


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