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The Original Purpose of Unemployment Insurance The unemployment insurance program was established under the Social Security Act of 1935 during the Great Depression. Its purpose was straightforward: provide temporary wage replacement to workers who become unemployed through no fault of their own while they search for new employment. The system was never designed to replace wages indefinitely. It was never intended to become a general income support program. Nor was it created to finance either side of a labor dispute, whether striking workers or employers. From the beginning, eligibility was tied to labor market attachment. Workers generally had to demonstrate they were: Unemployed Able to work Available for work Actively seeking work These principles were designed to ensure that benefits were paid to individuals who remained connected to the labor market and were making genuine efforts to return to employment.For nearly ninety years, those concepts have served as the foundation of unemployment insurance administration. What the U.S. Department of Labor Said in January 2026 The debate over strike benefits took on greater significance when the U.S. Department of Labor’s Employment and Training Administration issued guidance to state workforce agencies on January 8, 2026.In a letter to state administrators and unemployment insurance directors, Michelle Beebe, Administrator of the ETA Office of Unemployment Insurance, addressed the growing number of states considering or adopting laws allowing benefits for striking workers. The Department’s position is noteworthy because it does not say states are prohibited from paying benefits to striking workers. In fact, the guidance acknowledges longstanding federal precedent, including New York’s historical approach to providing benefits after an extended waiting period. However, the guidance also makes something else abundantly clear. States may not exempt striking workers from the federal requirement that claimants be able to work, available for work, and actively seeking work. The Department specifically stated that state agencies must continue evaluating those requirements on a week-by-week basis. The guidance further states that agencies must determine whether claimants are genuinely seeking employment and whether activities such as picketing have effectively removed them from the labor market. Most significantly, the Department explicitly stated that state laws providing blanket work-search exemptions for striking workers would violate federal unemployment compensation requirements. For those of us who have spent decades administering unemployment insurance programs, this guidance highlights the central tension in the current debate. The Administrative Reality Facing State Workforce Agencies The question is no longer whether states can pass laws allowing benefits to striking workers. The real question is how state agencies can administer those laws while simultaneously enforcing federal eligibility standards. Consider the practical challenge. A claimant participating in a strike may be spending hours each week walking a picket line, attending union meetings, participating in strike activities, and publicly advocating for a return to work under improved contract terms. At the same time, federal guidance requires the agency to determine whether that individual is actively seeking other employment and is immediately available to accept suitable work. Those are not simple determinations. Every unemployment professional understands that availability and work-search issues are among the most fact-intensive questions in the claims process. Adding labor disputes to the equation creates additional complexity for already strained workforce agencies. The issue becomes even more challenging when thousands of workers are involved in a single strike. Why Labor Dispute Disqualifications Historically Existed Historically, most states included labor dispute disqualifications in their unemployment insurance statutes. Those provisions were not necessarily anti-union. They were intended to preserve neutrality. Collective bargaining has traditionally involved economic pressure on both sides. Employers absorb operational losses and lost production. Workers sacrifice wages and benefits while pursuing contract objectives. Unemployment insurance remained outside that process. The reasoning was simple. UI was intended to provide support to unemployed individuals seeking work—not to finance economic activity associated with labor disputes. Whether one agrees with that philosophy or not, it explains why labor dispute disqualifications existed in most state laws for decades. The Emerging State Trend for Striking Workers That historical framework is beginning to change. According to the Congressional Research Service, New York and New Jersey currently permit certain striking workers to receive unemployment benefits after waiting periods. Washington and Oregon enacted legislation in 2025 expanding benefits for workers involved in labor disputes beginning in 2026. Several additional states have considered similar legislation in recent years. Supporters argue that workers exercising legally protected collective bargaining rights should not face severe financial hardship. They contend that unemployment benefits help stabilize families, reduce economic disruption, and create a more balanced bargaining environment. These arguments deserve serious consideration. However, they also raise broader questions regarding the future direction of unemployment insurance. Congress Is Now Debating the Future Direction of Unemployment Insurance Perhaps the clearest indication that this issue has become a national policy debate is the activity occurring in Congress. The Congressional Research Service recently identified several competing legislative proposals that would move federal policy in dramatically different directions. The SHIELD Act (H.R. 4424) would reinforce the traditional approach by prohibiting unemployment benefits for individuals participating in labor disputes, financially supporting strikes, or maintaining a direct interest in a labor dispute. At the opposite end of the spectrum is the Empowering Striking Workers Act of 2025 (H.R. 5206/S. 2731). This legislation would require states to consider certain workers involved in labor disputes as unemployed after specified triggering events, including fourteen days after a strike begins. A third proposal—the Unemployment Insurance Modernization and Recession Readiness Act (S. 2312/H.R. 4439)—would limit circumstances under which states could deny benefits due to strikes, lockouts, or employer labor law violations. The significance of these bills extends beyond their chances of passage. Collectively, they demonstrate that policymakers are questioning whether labor-dispute unemployment should be treated differently from unemployment caused by layoffs, plant closings, reductions in force, or economic downturns. That debate could shape unemployment insurance policy for decades. Could Strike Benefits Change Bargaining Dynamics? One of the most common concerns expressed by employer groups and some policymakers is that unemployment benefits could alter the economics of collective bargaining. Historically, financial pressure has encouraged both sides to seek resolution. Employers face lost production, reduced revenue, and operational disruption. Workers face lost wages. When unemployment benefits become available, critics argue that one side of that equation changes. Supporters respond that unemployment benefits are generally modest and unlikely to determine bargaining outcomes. The truth is that the relationship between benefits and strike duration remains difficult to measure. However, the concern is not unreasonable. If public benefits reduce the financial burden associated with a strike, policymakers should at least examine whether they influence bargaining behavior, settlement timing, or strike duration. Several employer organizations have argued that states should closely monitor these outcomes as more strike-benefit laws take effect. Trust Fund Solvency, Employer Charges, and Tax Rates As someone who has spent decades helping employers understand unemployment costs, I believe this is where the discussion becomes most important. Unemployment benefits are not free.Every benefit payment ultimately affects one or more of the following: Employer experience ratings Benefit charge statements State trust fund balances Solvency assessments Future unemployment tax rates Some advocates argue that strike-related benefits represent a relatively small percentage of overall unemployment expenditures. That may be true today. But unemployment insurance professionals understand that program expansions rarely exist in isolation. Every expansion establishes precedent. Every precedent creates pressure for future changes. At a minimum, additional benefit payments create additional trust fund obligations. States with healthy trust funds may absorb those costs more easily. States with existing trust fund debt or solvency concerns face a different reality. That concern has already been cited by governors and employer organizations opposing similar legislation. What This Means for TPAs and Employers Third-party administrators, employers and employer representatives should be paying close attention. These laws create new questions regarding: Benefit charging responsibility Non-charging provisions Trust fund financing Protest strategies Appeals activity Work-search verification Availability determinations Future tax rate impacts Employers should also recognize that many of these issues will ultimately be resolved through agency interpretation, administrative rulings, and court decisions. The legislation itself may only be the beginning. What Employers Should Be Watching The debate over strike benefits is still evolving. Employers should closely monitor: State legislative activity Federal conformity guidance USDOL enforcement actions Congressional proposals Trust fund solvency reports Administrative rulemaking Agency interpretation of work-search requirements Strike duration studies and labor dispute data After forty years in the unemployment insurance industry, I have learned that every eligibility expansion creates consequences that extend far beyond the original policy objective. The question facing policymakers is not whether striking workers experience financial hardship. They clearly do. The question is whether unemployment insurance—originally designed to support workers who are unemployed, available for work, and actively seeking work—should be transformed into a mechanism that supports participants in labor disputes. How policymakers answer that question may determine the future direction of unemployment insurance for years to come.

Executive Summary Selecting an HR compliance partner is a high‑stakes decision that extends far beyond administrative support. Employment regulations continue to evolve at an accelerated pace, placing increasing pressure on employers to remain compliant across federal, state, and local jurisdictions. The right compliance partner can help mitigate risk, improve consistency, and support strategic growth. The wrong one can expose organizations to costly penalties, operational disruption, and reputational harm. This guide outlines the critical considerations employers should evaluate before entering into an HR compliance partnership, highlighting the essential questions that reveal a provider’s expertise, accountability, and long‑term value. By asking the right questions before signing, employers can make informed decisions that protect both their workforce and their business. From Insight to Evaluation Before signing an agreement, employers should evaluate potential HR compliance partners by asking the following questions. Each question addresses a critical dimension of compliance expertise, responsiveness, accountability, and long‑term scalability. The 12 Essential Questions Which Employment Laws and Regulations Do You Actively Monitor? How Do You Stay Current as Regulations Change? Is Your Guidance Proactive—or Only Reactive When Issues Arise? Who Provides Compliance Guidance, and What Are Their Credentials? How Is Guidance Tailored to Our Industry, Workforce Size, and Risk Profile? How Do You Handle Multi‑State and Remote Workforce Compliance? What Are Your Response Time Expectations for Urgent Compliance Issues? How Do You Escalate High‑Risk Issues Such as Audits, Complaints, or Investigations? What Role Does Technology Play in Your Compliance Support Model? How Do You Support Employers During Audits, Investigations, or Disputes? What Accountability Do You Assume If Guidance Is Inaccurate or Incomplete? How Does Your Compliance Support Scale as Our Organization Grows? Why HR Compliance Has Become a Business‑Critical Function HR compliance is now one of the most complex and risk‑sensitive areas of modern business operations. From wage and hour laws and leave mandates to pay transparency, worker classification, and data privacy requirements, employers are expected to remain compliant in an environment where regulations evolve quickly and enforcement continues to intensify. Despite this reality, many organizations still approach the selection of an HR compliance partner as a routine vendor decision—often prioritizing cost or surface‑level features over long‑term impact. This approach can leave employers exposed when compliance issues arise. The Difference Between Reactive Support and Strategic Guidance A true HR compliance partner should function as an extension of an organization’s leadership team, delivering proactive guidance rather than reactive fixes. Before entering into an agreement, employers should understand which employment laws and regulations the partner actively monitors and how they stay current as rules change. Periodic updates alone are insufficient. Employers need confidence that guidance reflects the latest legal developments and is reviewed by qualified professionals who specialize in employment compliance. Who Provides the Guidance—and How It’s Applied Equally important is understanding who provides compliance guidance and how it is implemented. Employers should evaluate whether recommendations come from subject‑matter experts or generalists, and whether guidance is tailored to the organization’s industry, workforce size, and risk profile. As multi‑state and remote workforces become more common, compliance partners must demonstrate a practical, defensible approach to navigating overlapping—and sometimes conflicting—state and local requirements. Generic advice can create confusion, while customized guidance supports consistency and defensibility. Responsiveness When Compliance Issues Become Urgent Responsiveness is another defining characteristic of a strong compliance relationship. When urgent issues arise—such as employee complaints, audits, or regulatory inquiries—timely and actionable guidance can prevent escalation. Employers should clearly understand response time expectations, escalation processes, and how quickly their partner can deliver direction when it matters most. While technology can support compliance efforts, it should enhance expert judgment rather than replace it. The most effective tools translate legal requirements into everyday HR practices, streamline documentation, and improve visibility into compliance obligations. Accountability, Risk Support, and Long‑Term Scalability Accountability during high‑risk situations is a critical but often overlooked consideration. Employers should understand how a compliance partner supports audits, investigations, or disputes—and what responsibility the partner assumes if guidance proves inaccurate or incomplete. Real‑world examples, measurable outcomes, and long‑term client relationships can offer valuable insight into how a provider performs beyond sales conversations. Finally, organizations should assess whether the partnership is designed to scale. As businesses grow, expand into new markets, or evolve workforce strategies, compliance needs will change. A strong compliance partner anticipates growth and adapts alongside it. Moving from Vendor Relationships to True Partnerships Asking the right questions before signing an agreement helps employers move beyond transactional relationships and toward true compliance partnerships. When approached strategically, HR compliance becomes more than a defensive necessity—it becomes a foundation for trust, stability, and sustainable growth. Frequently Asked Questions About HR Compliance Partners Why is it important to carefully evaluate an HR compliance partner before signing an agreement? HR compliance partners influence how employment laws are interpreted and applied across an organization. Inadequate or outdated guidance can expose employers to legal, financial, and reputational risk, making thorough evaluation essential. How is an HR compliance partner different from an HR vendor? An HR vendor typically provides tools or administrative services. A compliance partner, by contrast, offers expert interpretation of employment laws, proactive monitoring of regulatory changes, and strategic guidance tailored to an employer’s specific circumstances. Do small and mid‑sized employers need the same level of compliance support as larger organizations? Yes. While organizational scale may differ, legal exposure does not. Smaller employers often face greater risk due to limited internal resources, making the right compliance partnership especially valuable. What role should technology play in HR compliance services? Technology should support compliance by improving efficiency, documentation, and visibility. It should never replace expert judgment or personalized guidance. How often should employers reassess their HR compliance partner? Employers should review the relationship at least annually—or sooner if there are significant changes in workforce size, geographic reach, or regulatory exposure.

Trust is tested in moments most organizations overlook. In this webinar, Hidden Moments That Build Employee Trust, experts from Experian Employer Services and H3HR Advisors explored how routine HR compliance and operational processes—such as onboarding, payroll accuracy, employment verification, and tax withholding—play a critical but often invisible role in shaping employee trust.  While employees rarely think about HR systems, they deeply feel the impact when these processes fail—especially during major life moments like starting a new job, securing housing, managing benefits, or ensuring timely pay. When organizations invest in reliable infrastructure and reduce friction in these hidden moments, they create stability, predictability, and confidence that carry forward into engagement, retention, and performance.  The key takeaway: Compliance isn't just about checking boxes—it's about showing up for employees when it matters most.   Why trust is built in the moments we don't talk about  Historically, compliance processes have been treated as back-office necessities—tasks that must be completed to avoid audits, fines, or legal exposure. But as the panel emphasized, employees don't experience compliance as a transaction. They experience it as support—or friction—during some of the most stressful moments of their lives.  Employees aren't thinking about systems. They're thinking about questions like:  Will I get paid correctly and on time?  Will my employment be verified so I can rent an apartment or buy a home?  Will my benefits work when my family needs them?  When HR processes are reliable, employees rarely notice. When they break down, trust erodes instantly—not only in HR, but in the organization.  The Hidden Infrastructure of Trust  The webinar highlighted a powerful truth: trust is built through consistency and dependability over time.  Research shared during the session underscores why this matters:  Only 61% of employees say they are very confident their payroll and withholdings are correct, meaning nearly 40% are unsure.  50% of employees would struggle to meet financial obligations if their paychecks were delayed by just one week.  Errors or delays in HR operations aren't just administrative inconveniences. They introduce stress into employees’ lives—and often into their families’ lives—at moments when stability matters most.  Where Trust Is Most at Risk  Trust is especially tested at the intersection of HR processes and real-life moments, when everyday administrative tasks carry real personal stakes for employees. From new‑hire onboarding and I‑9 verification—where first impressions are formed and early delays can undermine confidence—to payroll and tax withholding, where inaccurate or unpredictable pay can quickly erode trust, these processes shape how employees experience their employer.   Employment and income verification directly affect an employee’s ability to secure housing, loans, or transportation, while benefits enrollment tied to life events such as marriage, childbirth, or medical needs increases sensitivity to errors and miscommunications. Even programs like the Work Opportunity Tax Credit (WOTC) extend beyond compliance, opening doors to employment while delivering measurable business value. Many of these issues never escalate to leadership, yet they have a profound impact on individual employees—making their invisibility to executives precisely what makes them so risky.  Friction Is the Enemy of Trust  The panel consistently returned to one theme: reduce friction everywhere you can.  Friction shows up as:  Manual handoffs and workarounds  Delays caused by fragmented systems  Knowledge locked in one or two tenured team members  Rework, errors, and exception handling  Modern HR infrastructure—especially when paired with trusted partners—helps reduce this friction by improving accuracy, speed, and reliability for everyone involved: HR teams, employees, and third parties alike. The goal isn't more process. The goal is fewer steps, fewer errors, and greater confidence.  How to Measure Trust and Not Just Compliance  Traditional compliance metrics matter—but they don't tell the full story.  In addition to tracking accuracy, timeliness, and audit outcomes, organizations can measure trust by asking questions such as:  How confident are you in our HR processes?  Was this experience simple and predictable?  Did issues get resolved quickly and clearly?  Do you feel confident reaching out to HR again?  Short, well-timed feedback—embedded naturally at the end of key HR experiences—can surface powerful insights without overwhelming employees.  Over time, these signals connect directly to engagement, retention, and performance outcomes.  Key Takeaways Compliance is a powerful trust-building opportunity, because routine HR processes quietly shape how employees feel about their employer—often more than headline initiatives ever do. What may feel ordinary to HR teams, such as onboarding, payroll, or employment verification, can be life‑altering for employees and their families, especially during moments of financial or personal transition. When these processes are predictable and accurate, reliability creates calm—reducing stress and reinforcing confidence in the organization.   That reliability depends on strong infrastructure: the right technology and trusted partners allow HR to move from reactive problem‑solving to proactive support. Over time, trust compounds through these small, unseen moments; handled consistently and well, they create lasting credibility and a stronger, more resilient employee experience.  Reframing Compliance as Care The most powerful shift discussed in the webinar was a mindset change: Compliance isn’t just about risk mitigation—it’s about care, predictability, and partnership.  When organizations show employees they've thought ahead, invested in reliability, and designed systems around real life—not just regulations—trust follows naturally.  Download the Webinar On-Demand Want the full conversation, real-world examples, and additional insights from Experian Employer Services and H3HR Advisors?  Download the full webinar recording and slides to explore how modern HR infrastructure turns hidden compliance moments into lasting employee trust. 

The Work Opportunity Tax Credit (WOTC) has long been a valuable federal incentive designed to encourage employers to hire individuals from targeted groups who face barriers to employment. While the program is currently in a legislative hiatus, forward-looking employers should not interpret this pause as a reason to disengage. In fact, maintaining WOTC screening practices now positions organizations to capture significant tax credits if and when the program is reauthorized. WOTC is a federal tax credit available to employers who hire individuals from specific target groups, such as veterans, long-term unemployed individuals, SNAP recipients, and others. Depending on the category and tenure of the employee, credits can range from hundreds to several thousand dollars per qualified hire. Retroactive WOTC Eligibility Historically, when WOTC lapsed and later reinstated, Congress applied retroactive eligibility, allowing employers to claim credits for hires made during the hiatus period, provided proper documentation and screening were completed at the time of hire. The key principle here is documentation timing. WOTC eligibility hinges on completing prescreening (IRS Form 8850) on or before the day of the job offer and submitting it within required timeframes once the program is active. Why Employers Should Screen for WOTC During the Hiatus If employers stop screening now, they risk: Losing retroactive eligibility for hires made during the hiatus Missing out on potentially substantial tax credits Creating compliance gaps that cannot be corrected after the fact Conversely, employers who continue screening: Preserve eligibility for retroactive credits Maintain consistent hiring workflows Avoid operational disruption when the program resumes Given the historical pattern of WOTC reinstatement, continuing screening is a low-risk, high-upside strategy. To ensure compliance and maximize potential credits, employers should adhere to the following best practices: Integrate Screening into the Hiring Workflow: WOTC prescreening should occur seamlessly during the application or onboarding process, ideally embedded within your ATS or HRIS system. This is critical to maintaining an efficient process within your organization.  Ensure Timely Completion of IRS Form 8850: The form must be completed no later than the date of the job offer. Late completion invalidates eligibility and there are no do-overs. Once the document is late, employers have no further rights.  Maintain Consistent Candidate Experience: Screen all applicants uniformly to avoid bias or compliance risks. WOTC screening should be standardized and nondiscriminatory. This will ensure clean audit results, should your organization be audited.  Retain Documentation Rigorously: Proper recordkeeping is critical, especially during a hiatus period when submission timelines may shift upon program reauthorization. Once again, this is beneficial if your organization is under audit. Monitor Legislative Updates: Stay informed on WOTC status changes so submissions can be made promptly when the program resumes. Our website publishes updates as soon as they are made available. While the concept of WOTC is straightforward, execution is not. Employers often underestimate the administrative burden involved: Managing time-sensitive forms and deadlines Tracking eligibility across multiple target groups Navigating varying state workforce agency requirements Handling documentation audits and compliance reviews Monitoring legislative changes and submission windows For organizations with high hiring volumes or even moderate decentralized hiring, this can quickly become resource-intensive and error-prone.  The WOTC hiatus is not a pause in opportunity, it’s a test of preparedness. Employers who continue disciplined screening practices now will be best positioned to capitalize on retroactive credits when the program resumes. Maintaining compliance, consistency, and operational efficiency during this period can be challenging but it doesn’t have to be. Experian Employer Services provides a comprehensive, scalable solution to manage the full WOTC lifecycle with precision and efficiency. With Experian Employer Services as your partner, you can confidently navigate the hiatus while preserving every potential dollar of tax credit available to your organization. Questions about how to best manage your WOTC process during its hiatus? Reach out to our experts:

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