SHIELD Act

Bill Number

H.R. 4424

Origin Chamber

House

Congress

119th Congress, Session 1

Policy Area

Social Welfare

Status

Introduced

Latest Action

2025-07-16: Referred to the House Committee on Ways and Means.

Last Updated

2025-12-10T09:06:32Z

AI-Generated Summary

Purpose of the Legislation

The SHIELD Act (H.R. 4424) aims to clarify and restrict eligibility for unemployment insurance benefits when an individual's job loss stems from a labor dispute, such as a strike. It seeks to ensure that benefits are reserved for involuntary unemployment not connected to the worker's active involvement in or support for such disputes (excluding lockouts by employers).

Key Provisions

• Amendment to the Social Security Act: Adds a new requirement under Section 303(a) stating that states must deny "regular compensation" (standard unemployment benefits) for any week an individual is unemployed due to a strike or other labor dispute (not a lockout) if the individual:
• Is participating in the dispute,
• Is providing financial support to it, or
• Has a direct interest in its outcome (e.g., as a family member or close associate affected by the dispute).
• Amendment to the Federal Unemployment Tax Act (FUTA): Repeals an existing federal rule (Internal Revenue Code Section 3304(a)(5)) that previously required states to deny benefits during labor disputes.
• Effective Date: Changes take effect 2 years after enactment, but states may update their laws sooner if they choose.

Significant Changes to Existing Law

• Previously, federal law (via FUTA) broadly required states to disqualify workers from unemployment benefits if their unemployment resulted from a labor dispute, without specifying levels of involvement or support.
• This bill replaces that broad requirement with a more targeted one in the Social Security Act, focusing disqualification on active participation, financial support, or direct interest in the dispute. The FUTA repeal removes the federal mandate, shifting emphasis to state-level implementation under the Social Security Act.
• Lockouts (when employers prevent workers from accessing jobs) remain exempt, preserving benefits in those cases.

Potential Impacts

• On Government Agencies: State unemployment insurance agencies will need to revise eligibility rules and verification processes within 2 years, potentially increasing administrative burdens to assess workers' involvement in disputes. The federal government may see reduced oversight via FUTA but could face more uniform state compliance through the Social Security Act.
• On Citizens: Workers involved in strikes or disputes may lose access to unemployment benefits, affecting their financial stability during labor actions. This could discourage participation in strikes but protect benefits for those uninvolved or affected by employer lockouts.
• On International Relations: No direct impacts, as the bill focuses on domestic unemployment policy.

Main Stakeholders Affected

• Workers and Unions: Striking employees or those supporting strikes (including financially or through family ties) could be denied benefits, potentially weakening organized labor's leverage in negotiations.
• Employers: Businesses may benefit from reduced financial pressure on workers to strike, as it limits access to public benefits during disputes.
• State Governments: Responsible for implementing changes in unemployment systems, which could affect state budgets and compliance with federal funding requirements.
• Federal Taxpayers: Indirectly impacted through FUTA, as the repeal may alter how unemployment taxes fund state programs.

Notable Legal, Constitutional, or Political Implications

• Legal: Strengthens federal guidelines for state unemployment laws under the Social Security Act, potentially leading to more consistent nationwide rules but allowing state flexibility before the 2-year deadline. It may invite legal challenges from labor groups arguing it infringes on workers' rights to organize or access benefits.
• Constitutional: No overt conflicts with the Constitution, but it touches on the balance between federal spending power (via Social Security Act conditions) and states' rights to administer welfare programs. It does not directly implicate free speech or association rights, though indirect effects on labor disputes could be debated.
• Political: The bill, introduced by a bipartisan group of House members, reflects tensions in labor policy, favoring restrictions on benefits during voluntary disputes while protecting against employer actions. It could influence future negotiations between workers, unions, and businesses without altering broader labor laws like the National Labor Relations Act.

This summary was generated by AI and may contain inaccuracies. Refer to the official source document for the authoritative text.

Sponsor

Rep. Yakym, Rudy [R-IN-2]

Cosponsors (14)

Rep. Tenney, Claudia [R-NY-24], Rep. Murphy, Gregory F. [R-NC-3], Rep. Bean, Aaron [R-FL-4], Rep. Van Duyne, Beth [R-TX-24], Rep. Moran, Nathaniel [R-TX-1], Rep. Rouzer, David [R-NC-7], Rep. Kelly, Mike [R-PA-16], Rep. Moore, Blake D. [R-UT-1], Rep. Palmer, Gary J. [R-AL-6], Rep. Crank, Jeff [R-CO-5], Rep. Perry, Scott [R-PA-10], Rep. Self, Keith [R-TX-3], Rep. Smucker, Lloyd [R-PA-11], Rep. Bentz, Cliff [R-OR-2]

Recent Actions

• 2025-07-16: Referred to the House Committee on Ways and Means.
• 2025-07-16: Introduced in House
• 2025-07-16: Introduced in House

Bill Versions

• Securing Help for Involuntary Employment Loss and Displacement Act — issued 2025-07-16 — PDF (2 pages)