Judge Rejects Challenge to DoL Unemployment Insurance Rule

August 6, 2002 (PLANSPONSOR.com) - A federal judge in the District of Columbia has blocked efforts by a coalition of business groups to challenge the US Department of Labor (DoL) rule allowing states to provide unemployment insurance to workers on parental leave.

The judge said that the business groups, LPA Inc., the Society for Human Resource Management, and the US Chamber of Commerce, didn’t prove they were harmed by the rule. The court pointed out that no states have taken advantage of the rule to institute such benefits.

The DoL’s June 200 rule allows the jobless insurance on a voluntary, experimental basis, to parents who take leave following a child’s birth or adoption.

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The judge said that each state legislature has discretion on whether and how to implement and fund such programs. States may fund the programs by increasing employer contribution rates or developing new funding sources.

The business groups sued in June 2000, trying to get the rule thrown out.

The complaint alleges that the rule violates the substantive requirements of the unemployment compensation system and the Family and Medical Leave Act, and that it arbitrarily departs from long-standing agency policies.

The court agreed with DoL’s view – that the adverse effects predicted by the business group plaintiffs (increased taxes, increased absenteeism, and decreased productivity) have not occurred.

The case is LPA Inc. v. Chao, D.D.C., No. 00-1505, 7/24/02.