Virginia receives federal grant to support key unemployment insurance initiatives

Governor Terry McAuliffe today announced that the U. S. Department of Labor (DOL) has awarded nearly a million dollars in federal grant money to Virginia to support initiatives within the Unemployment Insurance (UI) program in two key areas. The Virginia Employment Commission (VEC) will administer the grants to further strengthen information technology systems and reduce the misclassification of employees as independent contractors.

Speaking about the announcement, Governor McAuliffe said, “I am pleased that Virginia was recognized and awarded these funds to strengthen the security of our unemployment insurance program, and to make it more responsive to the needs of Virginia’s workers and employers in this new Virginia economy. I am particularly pleased that this grant will help Virginia combat worker misclassification, which is a regrettably pervasive practice in our economy that undermines businesses that follow the law, deprives the Commonwealth of millions of dollars in tax revenues, and prevents workers from receiving legal protections and benefits.”

“This investment in VEC will enhance the Commonwealth’s unemployment insurance program and ensure our employers and workers can meet the demands of a changing economy,” said Secretary of Commerce and Trade Maurice Jones.  “Additionally, this grant will aid in our efforts to reduce worker misclassification in Virginia.”

The VEC received $500,000 through a competitive process for its information technology proposal.  These efforts will ensure necessary investments are made in the agency systems and IT security programs.  The U.S. DOL also awarded Virginia a $499,320 grant to combat worker misclassification.  The funds will increase the ability of Virginia’s unemployment insurance tax program to educate employers and detect and prevent misclassification.  Misclassification results when employers improperly classify employees as independent contractors.