Unemployment Insurance

Author: Kevin Shivers Date: May 18, 2011

The Pennsylvania House is ready to take action on unemployment compensation reform! House Bill 916 was reported last week from the Pennsylvania House Labor and Industry Committee. The bill could be considered by the full House next week. Without the reforms included in HB 916, business owners could see payroll taxes rise $100 per worker or more

Pennsylvania has borrowed close to $4 billion to pay unemployment compensation benefits - more than virtually all other states. Despite an unemployment rate that is lower than most states, Pennsylvania still pays out more in unemployment benefits than any state except California.

Without the critical changes in HB 916, the cost of the unemployment system will continue to outpace revenue and Pennsylvania will be required to continue to borrow money to pay benefits. This will force employers and workers to pay higher unemployment taxes for much of the next decade to repay the federal loans plus billions in unnecessary interest payments. The reforms in House Bill 916 are an important first step to return the state unemployment trust fund to solvency.

Specifically, House Bill 916:

Saves close to $600 million annually!

Strengthens standards used to determine eligibility for benefits

Cracks down on the ability of claimants to quit their jobs and still collects benefits

Requires claimants to actively search for work

Increases earnings required before claimants can reapply for benefits

Eliminates the "high-quarter" calculation in determining weekly benefit amount

Eliminates double-dipping by those who receive severance packages & collect UC benefits

Enables employers to participate in UC appeals hearings over the telephone

Provides automatic relief from charges for employers who had a former employee denied benefits

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