§505 Demonstration Projects

Summary

The Secretary of Labor can make agreements with up to 10 States to run trial projects that try new ways to help people on unemployment get back to work faster or to make State reemployment programs work better. The Governor must apply. The application must say what the project will do, how long it will run, any requested exceptions to certain federal rules, its goals and expected results, proof the project will run at least 1 calendar year without raising the State’s net costs in its Unemployment Trust Fund account, a plan for an impact study (including effects on skills, pay, and job retention), a promise to give reports the Secretary asks for, and a promise that any work meets the State’s suitable-work rule and the rules in section 3304(a)(5) of the Internal Revenue Code of 1986. The Secretary may allow limited exceptions to rules in section 3304(a)(4) of the Internal Revenue Code of 1986 or paragraph (1) or (5) of section 503(a) of this title so a State can run a project. Projects could start any time after February 22, 2012, can run no more than 3 years, and must end by December 31, 2015. Projects may only use employer training subsidies or direct payments to employers who hire people on unemployment; direct payments cannot be more than the worker’s weekly benefit amount and are only to cover wages above the person’s prior benefit level. The Secretary must approve or deny a complete application within 30 days and give public notice within 10 days; if not denied in 30 days the application is treated as approved. The Secretary can stop a project for violations. Funds certified under section 502(a) may pay for approved projects.