Proposed changes to unemployment benefits face lawmakers

FRANKFORT, Ky. (WTVQ/Press Release) – A proposed bill in the state House of Representatives could make changes to unemployment benefits. House Bill 4 details what would qualify someone for unemployment. Some of the changes include actively applying or interviewing for at least five jobs per week and not rejecting a job offer or interview.

The Kentucky Center for Economic Policy completed a study that found if HB4 was passed, the economy would suffer as it would force many workers into jobs they aren’t suited for that pay less than their previous job.

“We want people moving into higher paying jobs that match their careers, that help make sure that the skills they’ve developed up to that point are put to good use,” says Dustin Pugel with the Kentucky Center for Economic Policy. “That’s good for them and it’s good for their employers, and ultimately it’s good for the economy as a whole.”

Pugel says even though many parts of the bill are detrimental to unemployed workers in the state, he’s glad to see work sharing included in the revisions to help keep people employed.

The COVID-19 pandemic has compounded Kentucky’s existing workforce shortage, leaving the state’s unemployment insurance system overrun and insufficient. In response, Chairman Russell Webber of the House Economic Development and Workforce Investment Committee has filed legislation that would reform the current system to encourage re-employment, aid small businesses, and prepare Kentucky for the future.

“If you have left your home over the past year, you have witnessed the effects of this workforce crisis,” says Representative Webber. “Small businesses are closing their doors, restaurants are understaffed, and healthcare workers are spread thin. We’ve reached a critical time to implement real change and get Kentuckians back to work.”

Kentucky currently lags in the nation when it comes to workforce participation and the percentage of adults who are actively employed. Historically, Kentucky UI claimants have spent more time receiving benefits compared to other states, and the pandemic has only worsened the effects. A 2019 report from the Kentucky Chamber of Commerce shows the average duration of benefits for claimants to be among the highest in the nation at 18.2 weeks.

“The UI system should encourage rapid re-employment and act as a support for laid-off workers to get back in the field,” says Webber. “The current system is not accomplishing this goal. In fact, it appears to be moving us in the opposite direction.”

The measure, the Unemployment Insurance Sustainability Act of 2022, ensures benefits will be there for laid-off workers when they need them and assists those workers in retraining and upskilling to increase potential for job opportunities. Additionally, the bill would implement a work-share program similar to those currently in place in 27 other states. The program would act as an alternative to laying-off workers by permitting employers to temporarily reduce hours and corresponding wages, making employees eligible to collect partial unemployment benefits.

The Unemployment Insurance Sustainability Act of 2022 has 5 key components:

  1. Strengthens Kentucky’s work search program to encourage re-employment
  2. Ties the maximum number of benefit weeks to economic conditions to support employment and make sure Kentucky is prepared for future downturns
  3. Helps laid-off workers upskill and retrain
  4. Makes unemployment taxes fair for small businesses and entrepreneurs
  5. Gives employers an alternative to lay-offs by establishing a work-share program

“Kentucky has been operating on an inefficient system for too long, and we are now seeing the height of those effects,” says Webber. “This bill is a vital step in rebuilding our workforce and restoring our economy.”

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