Fiscal year 2025 state unemployment insurance resource allocations

CLASSIFICATION
   EMPLOYMENT AND TRAINING ADMINISTRATION                     Unemployment Insurance
               ADVISORY SYSTEM                                CORRESPONDENCE SYMBOL
          U.S. DEPARTMENT OF LABOR                            OUI/DFAS
             Washington, D.C. 20210                           DATE
                                                              September 25, 2025


ADVISORY:       UNEMPLOYMENT INSURANCE PROGRAM LETTER NO. 17-25

TO:             STATE WORKFORCE AGENCIES

FROM:           LORI FRAZIER BEARDEN
                Acting Assistant Secretary

SUBJECT:        Guidelines for Fiscal Year 2025 State Agency Unemployment Insurance
                Resource Allocations, Supplemental Budget Requests, and Above-Base
                Funding

1. Purpose. To provide information to states about Fiscal Year (FY) 2025 Unemployment
   Insurance (UI) State Administration base resource allocations, general guidelines for
   resource planning, above-base funding, and Supplemental Budget Requests (SBRs).

2. Action Requested. State Administrators are requested to provide copies of this
   Unemployment Insurance Program Letter (UIPL) to the appropriate staff.

3. Summary and Background.

   a. Summary – The Full-Year Continuing Appropriations and Extensions Act, 2025 (H.R.
      1968, P.L. 119-4), which was enacted on March 15, 2025, provides the U.S Department
      of Labor (Department) with FY 2025 appropriations for state UI operations. This UIPL
      provides information on the final base state UI administration allocations as well as
      information and guidance regarding above-base administrative funding. The table below
      summarizes the average weekly insured unemployment (AWIU) levels and dollar
      amounts corresponding to the FY 2025 President’s Budget request and the FY 2025
      appropriation.

       Summary of FY 2025 UI Budget Authority

                                     Budget Request         Appropriation              Difference
                           As reflected in UIPL No. 19-24
      AWIU Contingency Trigger             2,121,000             3,075,000                954,000
      State Administration            $3,034,274,000        $2,759,635,000          -$274,639,000
      RESEA / Integrity                $388,000,000           $388,000,000                     $0
      National Activities                $48,000,000           $18,000,000           -$30,000,000
      Total                           $3,470,274,000        $3,165,635,000          -$304,639,000


   RESCISSIONS                                                 EXPIRATION DATE
   None                                                        September 30, 2032

       The appropriation provides that these funds are available for obligation by the states
       through December 31, 2025, with the following exceptions. Funds used for automation or
       competitive grants awarded to states for improved operations and Reemployment
       Services and Eligibility Act (RESEA) grants are available for obligation by the state
       through September 30, 2027. If the automation project is being carried out through a
       consortium of states, the funds are available for obligation by the states through
       September 30, 2031, and must be expended by September 30, 2032. Funding for the
       Unemployment Insurance Integrity Center of Excellence is available for obligation by the
       state through September 30, 2026.

       As described in Section 4.c.iii. of this UIPL, ETA does not anticipate any reimbursable
       travel costs for FY 2025. Unused funding otherwise held for state travel reimbursements
       will instead be included in the amounts provided to states for above-base funding. If any
       reimbursable travel did occur in FY 2025, states should provide travel estimates and final
       reimbursement requests to the appropriate Regional Office no later than November 1,
       2025. States do not need to submit an additional SF 424 for travel reimbursements.

   b. Background – Before the beginning of each fiscal year, the Employment and Training
      Administration’s (ETA) Office of Unemployment Insurance announces preliminary
      dollars and staff year base administration resource planning targets for UI operations.
      States use this information in planning and developing State Quality Service Plans. These
      targeted funding levels are developed based on the President’s budget request for state UI
      administration funding for the relevant fiscal year and are subject to change pending the
      amount of funding provided under the full-year appropriations.

       The amount of state UI administrative resources through the Federal budget cycle is tied
       to national UI workloads. For FY 2025, the economic assumptions underlying the
       President’s Budget resulted in a projected national AWIU of 2.121 million. As a result,
       the FY 2025 base administration allocation remains at a 1.8 million AWIU level. The FY
       2025 President’s Budget included a request for $3,034,274,000 in total state UI
       administration funding. These figures were reflected in the FY 2025 State Workforce
       Agency [UI] Resource Planning Targets and Guidelines published in UPIL No. 19-24 on
       September 16, 2024. On March 15, 2025, the Full-Year Continuing Appropriations and
       Extensions Act was enacted providing for $2,759,635,000 in UI state administration
       funding, $274,639,000 below the requested level. Because the appropriated level was
       significantly lower than the requested level, the final base administration funding
       distributions were reduced.

4. Details.

   a. Final Base Administration Allocations. As a result of the lower funding provided in the
      FY 2025 full-year appropriation relative to those used to develop the preliminary FY
      2025 targets, the final FY 2025 base allocations are reduced from the preliminary target
      levels. The preliminary FY 2025 base target funding levels were set such that every state
      would receive a 5.94 percent increase in base administrative funding relative to FY 2024
      (see UIPL No. 19-24, Section 4.c.iv.). Based upon the funding received, the final base

       allocations were reduced from the preliminary target levels by 5.5 percent for all states.
       This reduction was applied to both the base administration funding and the postage
       funding. The attached table shows the total full FY 2025 base allocations for each state.
       These adjusted amounts have already been distributed – this UIPL provides notice of the
       final amounts awarded by state.

b. Above-Base Distribution.

  i.      Above-Base and Contingency Funding. The Employment and Training
          Administration (ETA) estimates the FY 2025 appropriation will be insufficient to
          provide for full funding of states’ above-base administrative earnings. ETA provided
          above base funding at $0.50 per $1.00 earned for the first two quarters of FY 2025
          and expects to continue to provide above-base funding at this rate for the remaining
          quarters. Additional funding, if available, will be included along with the FY 2025
          fourth quarter above-base distributions. If funding is insufficient, a further reduction
          to 4th quarter distributions may be necessary. In addition, the AWIU contingency
          trigger, which is set to 3,075,000, is significantly higher than the Department’s
          estimated AWIU from the FY 2025 President’s Budget request which was set at
          2,121,000. As a result, no additional contingency funding is expected to be available
          in FY 2025.

 ii.      Administrative Funding for Coronavirus Aid, Relief, and Economic Security
          (CARES) Act Programs. The CARES Act statute requires that ETA reimburse states
          for administrative expenses involved in the temporary pandemic programs for all
          applicable weeks of unemployment in 2020 and 2021. Ongoing administrative
          workload, at a diminishing rate, is primarily focused on data retention, establishing
          and collecting overpayments, and processing workload backlogs. Funding for
          ongoing administrative costs for certain CARES Act programs during FY 2025 was
          made available through two separate funding opportunities as outlined in UIPL No.
          17-24 and UIPL No. 02-25.

iii.      Support. The overhead rate for above-base state UI, Trade Readjustment Allowances
          (TRA), Alternative Trade Adjustment Assistance (ATAA), and Reemployment Trade
          Adjustment Assistance (RTAA) administration remains at 19 percent.

 iv.      Postage. In the past, ETA has, where funding is available, provided above-base
          funding for postage directly to state workforce agencies based on the number of
          weeks claimed above the base workloads accounted for in the states’ base postage
          allocations. In recent years, unprecedented volatility in workload volumes and
          insufficient funding levels has forced ETA to withhold postage funding on above-
          base workloads. Based on the current state of above-base administrative funding,
          ETA will once again withhold postage from states’ above-base distributions. If
          additional funding is available at the end of the year, ETA will first prioritize
          payments for above-base earnings before providing above-base postage funding.

     v.    Trade Readjustment Allowance (TRA) Redeterminations. Currently, there are no
           court decisions on the TRA program that would require the states to make monetary
           redeterminations. If one occurs, states must follow the UI-3 reporting instructions in
           Employment and Training (ET) Handbook No. 336, 18th Edition, Change 4.

   c. Supplemental Budget Requests (SBRs). Instructions for SBRs and other special
      projects are provided primarily through UIPLs. The State Quality Service Plan Handbook
      also contains SBR instructions and procedures for SBRs. Pending funding availability,
      states may submit a Standard Form (SF) 424 (Office of Management and Budget (OMB)
      Approval No. 4040-0004) and SF 424A (OMB Approval No. 0348-0444) to request
      additional funds for certain types of administrative costs (listed below) that are not
      funded within the states’ base and above-base grants.

      i.   Special Projects. FY 2025 funding for Reemployment Services and Eligibility
           Assessments (RESEAs) will be provided to states to administer these activities in
           accordance with UIPL No. 12-25 and each state’s approved FY 2025 RESEA state
           plan.

     ii.   Travel. As in recent years, funding is available for reimbursements associated with
           certain priority travel, however ETA does not anticipate any reimbursable travel costs
           for FY 2025. Unused funding otherwise held for state travel reimbursements will
           instead be included in the amounts provided to states for above-base funding. If any
           reimbursable travel did occur in FY 2025, states should provide travel estimates and
           final reimbursement requests to the appropriate Regional Office no later than
           November 1, 2025. States do not need to submit an additional SF 424 for travel
           reimbursements. Reimbursement requests for covered FY 2025 travel costs received
           after November 1 may not be paid.

   d. Nationally Funded Activities. As provided in the State Unemployment Insurance and
      Employment Service Operations appropriation, the Department will make payments, on
      behalf of the states, to the entities operating the National Directory of New Hires and the
      State Information Data Exchange System for use by the states.

   e. State Flexibility. All state UI administrative grant funds must be used in accordance with
      applicable Federal law, including Section 303(a)(8) of the Social Security Act (SSA) and
      the cost principles contained in 2 C.F.R. Part 200 and 2 C.F.R. Part 2900. States have
      flexibility to expend grant funds as they deem appropriate and necessary to manage and
      operate their UI programs to meet established goals and requirements within the
      parameters of Federal law. The only limitation is that states must use the annual allocated
      staff-year level for claims activities for above-base reporting purposes. This ensures that
      states do not earn more above-base resources than they otherwise would have been
      entitled to earn. This flexibility does not pertain to funding issued for special projects or
      SBRs; funding for these purposes must be spent in accordance with the spending plans
      approved for these respective projects

5. Inquiries. Please direct inquiries to the appropriate Regional Office.

6. References.

   •   Section 303(a)(8) of the Social Security Act, (42 U.S.C. Section 503(a)(8));
   •   Full-Year Continuing Appropriations and Extensions Act, 2025, Public Law (Pub. L.)
       119-4;
   •   2 C.F.R. Part 200, Uniform Administrative Requirements, Cost Principles, and Audit
       Requirements for Federal Awards, Final Rule;
   •   2 C.F.R Part 2900, Uniform Administrative Requirements, Cost Principles, and Audit
       Requirements for Federal Awards (U.S. Department of Labor);
   •   UIPL No. 12-25, Fiscal Year (FY) 2025 Funding Allotments and Operating Guidance for
       Unemployment Insurance (UI) Reemployment Services and Eligibility Assessments
       (RESEA) Grants, issued June 10, 2025, https://www.dol.gov/agencies/eta/advisories/uipl-
       12-25;
   •   UIPL No. 19-24, Fiscal Year (FY) 2025 State Workforce Agency Unemployment
       Insurance (UI) Resource Planning Targets and Guidelines, issued September 16, 2024,
       https://www.dol.gov/agencies/eta/advisories/uipl-19-24;
   •   UIPL No. 17-24, Supplemental Budget Request (SBR) Opportunity for Additional
       Administrative Funding to Support States’ Ongoing Administrative Activities Associated
       with Certain Coronavirus Aid, Relief, and Economic Security (CARES) Act
       Unemployment Compensation (UC) Programs, issued August 26, 2024,
       https://www.dol.gov/agencies/eta/advisories/uipl-17-24;
   •   UIPL No. 02-25, Instructions to States for Ongoing Workload-Based Administrative
       Funding for the Federal Benefit Programs Under the Coronavirus Aid, Relief, and
       Economic Security (CARES) Act, as amended, issued November 6, 2024,
       https://www.dol.gov/agencies/eta/advisories/uipl-02-25; and
   •    ETA Handbook No. 336, 18th Edition (March 2019), Unemployment Insurance State
       Quality Service Plan (SQSP), Planning and Reporting Guidelines.

7. Attachment(s).

   •   Attachment I: State UI Base Administrative Grants – FY 2025

                                                                           Attachment I


               Final FY 2025 Base UI Administrative Funding Allocations
                              Base
State                                             Postage            Base Total
                         Administration
Total                        2,501,993,340          124,896,870         2,626,890,210
Alabama                         25,783,915              783,781            26,567,696
Alaska                          24,069,197              326,361            24,395,558
Arizona                         36,217,355            1,764,764            37,982,119
Arkansas                        17,427,540              723,062            18,150,602
California                     339,245,415           25,907,019           365,152,434
Colorado                        37,979,391            2,302,616            40,282,007
Connecticut                     45,368,497            1,768,293            47,136,790
Delaware                         8,762,315              372,736             9,135,051
District of Columbia             9,101,633              390,544             9,492,177
Florida                         79,621,086            4,490,322            84,111,408
Georgia                         52,301,434            2,836,785            55,138,219
Hawaii                          14,460,197              504,540            14,964,737
Idaho                           14,582,279              619,108            15,201,387
Illinois                       148,323,440            5,673,390           153,996,830
Indiana                         41,291,057            1,729,633            43,020,690
Iowa                            27,243,335              918,100            28,161,435
Kansas                          20,160,438              703,552            20,863,990
Kentucky                        29,104,057              872,637            29,976,694
Louisiana                       24,977,319              986,244            25,963,563
Maine                           14,036,820              488,034            14,524,854
Maryland                        56,053,611            1,574,141            57,627,752
Massachusetts                   55,552,663            4,401,604            59,954,267
Michigan                       131,515,452            3,264,159           134,779,611
Minnesota                       42,037,961            3,079,128            45,117,089
Mississippi                     20,331,928              524,181            20,856,109
Missouri                        39,095,811            1,631,773            40,727,584
Montana                          7,899,377              492,488             8,391,865
Nebraska                        14,214,841              451,312            14,666,153
Nevada                          23,377,696            1,311,942            24,689,638
New Hampshire                   10,930,318              324,025            11,254,343
New Jersey                     118,077,460            6,115,534           124,192,994
New Mexico                      13,829,957              680,699            14,510,656
New York                       163,938,863           10,162,647           174,101,510
North Carolina                  51,240,116            2,059,658            53,299,774
North Dakota                     7,383,110              248,847             7,631,957
Ohio                            73,769,011            3,129,818            76,898,829
Oklahoma                        21,487,732              952,461            22,440,193
Oregon                          46,205,887            2,150,855            48,356,742
Pennsylvania                   119,781,399            5,517,174           125,298,573
Puerto Rico                     12,038,138            1,021,352            13,059,490
Rhode Island                    13,159,115              628,767            13,787,882

                                                               Attachment I


                     Base
State                                     Postage         Base Total
                 Administration
South Dakota            4,726,484               201,394        4,927,878
Tennessee             33,967,620              1,334,107       35,301,727
Texas                142,700,106              8,806,414      151,506,520
Utah                  22,170,762                975,506       23,146,268
Vermont                 8,024,033               253,106        8,277,139
Virgin Islands          1,642,276                28,814        1,671,090
Virginia              40,152,648              1,795,094       41,947,742
Washington            87,801,840              3,714,872       91,516,712
West Virginia         10,662,199                547,126       11,209,325
Wisconsin             63,263,506              1,952,155       65,215,661
Wyoming                 7,845,992               205,250        8,051,242