The Inclusive Economy
Self-Employment Assistance Program Sees Major Expansion
By Katherine Lucas McKay on 02/22/2012 @ 11:45 AM
Program receives boost; grants available
For the past two years, CFED has kept you up-to-date on an innovative proposal to expand access to entrepreneurship training through the Department of Labor’s (DOL) Self Employment Assistance (SEA) Program. Today, we have great news: Senator Ron Wyden (D-OR) included a major expansion of SEA in the recently signed legislation to extend Unemployment Insurance (UI)! As a result, thousands more unemployed workers will be able to unleash their entrepreneurial talents while they receive unemployment benefits and training to help their businesses succeed.
The nation has been struggling with an unemployment rate higher than eight percent for more than three years and nearly half of all unemployed workers have been out of work for more than six months. For some job seekers, starting a business provides a way to create their own jobs. For more than 20 years, SEA has allowed UI recipients in seven states to work full-time on starting a business while receiving unemployment benefits. SEA has been evaluated and found effective but has had limited reach because it was difficult for states to participate.
Senator Wyden’s SEA reform legislation is based on a bill he introduced in the Senate last year, with support from Senators Carper (D-DE) and Casey (D-PA). It allows a state to opt in easily, through a formal agreement between the Governor’s administration and the U.S. Department of Labor (DOL). A critical feature of the legislation is that it authorizes and appropriates $35 million in one-time funding for states; the grants are to be used to set up new SEA programs or improve existing ones, including through the development and implementation of entrepreneurship training resources for UI recipients.
Specific provisions include:
- States can extend a maximum of 26 weeks of SEA benefits to unemployed workers interested in entrepreneurship
- Limits participation to one percent of a state’s total pool of UI recipients. This will prevent the program from adding to the budget and is based on average take-up rates in the states that currently offer SEA
- Establishes reporting and evaluation requirements to track total jobs created, participants’ business income over time, and tax revenues associated with SEA
- States can provide training and resources to SEA participants through partnerships with nonprofit organizations that have expertise in business development services
We anticipate that microenterprise development organizations across the nation will have opportunities to expand their services through partnerships with state workforce agencies. CFED will keep you informed as DOL rolls out the new rules and requirements for the state grant funding. Meanwhile, if you hope to see a new or improved SEA program in your state, now is the time to contact your state workforce agency!