UPDATE: State lawmakers override Beshear veto of legislation restricting eligibility for unemployment benefits

The legislation triggered emotional floor debates and a defection by some GOP lawmakers

Update from March 21, 2022:

FRANKFORT, Ky. (WTVQ) – The Republican-led Kentucky House and Senate on Monday overrode Gov. Andy Beshear’s veto of House Bill 4, which significantly restricts eligibility for unemployment insurance benefits.

Supporters say the legislation will increase Kentucky’s low workforce participation and help employers fill vacant job openings, while also lowering the unemployment insurance taxes for businesses paying into the fund.

Critics, which include some Republican lawmakers from eastern Kentucky districts with limited job openings, say it will hurt struggling people who lost their previous job through no fault of their own and have trouble finding a job making a living wage.

Under the legislation, the number of weeks unemployed Kentuckians are eligible for the benefits will be reduced from 26 to anywhere from 12-to-24 weeks, the exact time period will be based on the statewide jobless rate from nine to 12 months earlier.

Work search requirements will also go from one to five per week in order to remain eligible for benefits.

Also, five weeks of benefits will be added for people enrolled in approved job training or certification programs.

Gov. Beshear says the measure harms people who need the safety net benefit.

The bill was backed by the influential Kentucky Chamber of Commerce.

 

Update from March 3, 2022:

FRANKFORT, Ky. (WTVQ) – Legislation that would change the length of unemployment insurance benefits and job search requirements for recipients received approval from the Senate on Thursday.

According to the Legislative Research Committee (LRC), House Bill 4 effectively changes the maximum duration of benefits from a flat 26 weeks to between 12 and 29 weeks based on economic conditions and a claimant’s personal decision on whether or not to seek job training. It would take effect at the beginning of next year.

“House Bill 4 significantly strengthens Kentucky’s work search standards, which will help guide unemployed workers to find reemployment more quickly by equipping them with appropriate standards and practices for finding a new job,” said Sen. Wil Schroder, (R) Wilder.

Schroder presented the legislation on the Senate floor, where it passed with a 22-13 vote. Rep. Russell Webber, (R) Shepherdsville, is the primary sponsor of the measure.

Known as the Unemployment Insurance Sustainability Act of 2022, HB 4 seeks to make a number of changes to Kentucky’s unemployment program, according to the LRC. Lawmakers had filed three floor amendments to the bill, but all were withdrawn on Thursday before an hour of ardent debate on the measure.

Supporters said the bill is needed to help businesses stay open and address critical workforce shortages across the state. However, critics argued the legislation would harm working families who are already facing financial hardship.

Schroder said federal law requires benefit claimants to be available for work and actively search for work as conditions of receiving benefits.

“States have flexibility to set standards for what it means to search for work,” he said. “Kentucky has historically set minimal search standards, only requiring claimants to list one job contact per week.”

Under the bill, the LRC reports claimants would need to engage in a minimum of five verifiable work search activities each week in order to remain eligible for benefits. At least three of the work search activities must consist of submitting an application or interviewing for a job. Additional activities can include search support such as job shadowing or attending networking events.

According to the LRC, between 2009 and 2019, Kentucky claimants spent an average of 19 weeks receiving benefits – the longest benefit duration in the nation. As of June 2021 only 53.8% of Kentucky’s adults were actively employed – the fifth lowest employment population ratio in the entire country, he said.

Schroder added that HB 4 supports laid-off workers who choose to upskill by offering them five weeks of unemployment benefits if they enroll in qualified job training or certification program.

Senate Minority Caucus Chair Reginald Thomas, (D) Lexington, said he does not support the bill and could not stand behind the decreased length of benefits.

“It slashes unemployment benefits,” he said. “It basically guts the unemployment security system and says to workers: “No, if you’re out of work through no fault of your own, we’re just going to forget about you.”

Some of the biggest critics were from Eastern Kentucky.

Sen. Robin L. Webb, (D) Grayson, said that, as a former coal miner, she recalled times when good-paying jobs were plentiful in the area.

“It’s an insult, it’s a slap in the face to people who risk their lives to keep energy going,” she said. “You closed the coal-fired plant. We’ve done away with a lot of the jobs, moved them all to the Golden Triangle and other populated places. There’s no equity in that, and there’s no equity in this.”

Sen. Phillip Wheeler, (D) Pikeville, also said he could not support the measure after seeing economic devastation in Eastern Kentucky for the past two decades. He spoke through tears as he lauded those who worked in coal mines, many of whom want to keep working.

“For nearly three decades, coal severance monies poured out of the mountains to our general fund, building roads, schools and improvements throughout our commonwealth,” he said. “We Eastern Kentuckians have always been willing to stand up and do our part, and we remain ready to do so today.”

Senate President Pro Tem David P. Givens, (R) Greensburg, said he empathizes with his colleagues and the challenges some people face in their districts. But he also cited concerns for small businesses that contribute to the unemployment insurance fund.

“It’s there to be used as a safety net in time of challenge and transition,” he said.  It’s there in ways to make employees be able to sustain a livelihood in times that otherwise it would be hard. But it’s not a safety net for these small businesses. When they fail or close, there’s no UI fund for them to knock the door on and draw money from. When the business fails, it fails.”

The bill now heads back to the House for concurrence.

 

Original story below:

FRANKFORT, Ky. (WTVQ/AP) — The Kentucky House voted Thursday to revamp rules for unemployment benefits, capping an impassioned debate over the bill’s impact on laid-off workers and the state’s economy.

Key parts of the bill would increase work-search requirements for people receiving jobless benefits and tie the length of time recipients get benefits to the unemployment rate. That provision could cut the number of benefit weeks by more than half in times of low jobless rates.

Supporters, including the Kentucky Chamber of Commerce, said it represents an important step toward improving the state’s chronic workforce shortages as businesses struggle to fill jobs.

“We can’t become known as a state that is short on workers,” Kentucky Chamber executive Kate Shanks told a House committee Thursday. “This is a huge issue for us to tackle.”

Opponents said the stricter rules would increase hardships for many laid-off workers, forcing them to accept lower-wage jobs as they face a quicker cutoff of benefits.

“What rationale can there be for enacting a law that will harm Kentuckians already hanging by a thread?” Dale Raines, with the Kentucky Council of Churches, said during the committee hearing.

The bill struck a nerve with eastern Kentucky lawmakers, who said the stricter rules would hurt their constituents struggling to find work in a region where many coalfield jobs have vanished.

“For the people of my district, for the people of my region, let me beg of you not to do this,” Republican Rep. John Blanton said during the hourslong House debate.

Blanton implored his colleagues to focus on policies to promote job growth in areas like his that struggle with chronically high unemployment.

“All I’m asking for is not a handout, a hand up,” he said. “We have a right to have jobs in our region, the same as everywhere else.”

Blanton tried to revise the bill to retain the state’s current 26 weeks of eligibility for unemployment insurance benefits and reduce the work-search requirements to reflect more limited job opportunities in areas like his. His amendment was defeated.

Opponents warned the bill would reduce the maximum number of weeks to between 12 and 24.

Democratic Rep. Angie Hatton, also from eastern Kentucky, warned that the reduced access to benefits would lead to more population losses in the region.

“This bill, however well intentioned, will cause more people to move away from our counties to go find work when their unemployment runs out,” Hatton said. “That’s the last thing on earth that we need right now.”

The bill’s supporters pointed to the need to improve Kentucky’s workforce participation rate, saying the state needs more workers paying taxes to meet its many long-term financial needs. And they noted that the unemployment insurance system is supported by businesses.

Another leading opponent of the bill, state AFL-CIO President Bill Londrigan, warned that the proposed changes in the bill could delay overhauling Kentucky’s outdated technology for processing jobless claims.

Like other states, Kentucky was overwhelmed by record waves of claims for jobless assistance caused by the coronavirus pandemic. Tens of thousands of Kentuckians found themselves in limbo for months as they waited for their jobless claims to be processed.

The measure also would create a method to report benefit recipients who fail to show up for job interviews or turn down job offers. It also offers inducements through an extra five weeks of benefits for laid-off workers participating in job training or other education programs.

Overall, the proposal would make significant changes to the state’s unemployment benefit system. It includes increased job search requirements, triggers to force people to take lower-paying jobs, reduces benefit weeks to as few as 12 weeks and allows employers to report people who don’t show up for interviews. Supporters say something is needed to force people to get in the work force and take jobs. Governor Andy Beshear disagreed. He says things like state funded Pre-K programs and even more investment in child care are the answers, helping parents who are challenged by child care issues when it comes to employment. He said the pre-K program would pay long-term education benefits that also would improve the work force in the future.

“You don’t cut safety nets when times are good, especially when that safety net was so challenged so recently. Every month while national publications have talked about quit rates our new hires rate has been higher. I’m opposed to it, it’s not going to help out our work force participation, it’s just going to harm some people who need that safety ne,” Beshear said during a briefing when asked about HB 4.

“This is a huge issue for us to tackle. There isn’t one specific bill or one specific program that can address our worker shortage but House Bill 4 specifically tackles a few of the challenges we laid out in our workforce report this past summer,” Shanks said

Beshear noted the end to federal unemployment bonus payments in other states and in Kentucky didn’t lead to a surge in work force participation.

The bill’s primary sponsor, Rep. Russell Webber, R-Shepherdsville, said the bill is not intended to solve all of the unemployment and workforce participation issues facing the Commonwealth, but it is an “important first step.”

“Right now, 47% of the working age population in Kentucky is not working, so we have 53% of our working age population that is actively working,” Russell said. “… We cannot be known as a state without workers or a state that is short on workers.”

Under HB 4, the duration of unemployment insurance benefits will be based upon the state average unemployment rate. One provision of the bill says if the state average unemployment rate is less than 4.5%, benefits may last for up to 12 weeks. Under current statute, unemployment insurance benefits may last up to 26 weeks.

The bill would also require recipients to engage in at least five verifiable work search activities a week with at least three of those activities being applying for a job, interviewing for employment or job shadowing.

Another provision of HB 4 would give recipients an additional five weeks of eligibility if he or she is enrolled in an approved job training or certification program.

“This is a great opportunity, and it helps Kentuckians,” Webber said.

Webber also assured his colleagues that this bill would not hurt seasonal workers or those impacted by the Western Kentucky tornadoes.

Several lawmakers, however, expressed fears that HB 4 would hurt rural communities.

Rep. John Blanton, R-Salyersville, said he believes HB 4 would be “devastating” to the people in his district, where jobs are hard to find and many people commute up to two hours away from home in order to work.

Blanton attempted to pass a floor amendment that would change several things about Webber’s original bill, such as keeping the maximum length of benefits at 26 weeks; however the amendment failed.

“You see, people drawing unemployment insurance are people who want to work and have been working, but now we’re going to go after them?” Blanton said. “… I would think if we want to solve our workforce participation problem, we would go after that 53,000 that’s not working rather than those 18,000 that are out of work but are willing to work.”

Rep. Norma Kirk-McCormick, R-Inez, agreed with Blanton, saying the bill is “super bad” for her district.

Rep. Al Gentry, D-Louisville, also agreed that the bill would hurt rural communities. Gentry made a motion to postpone voting on HB 4, but his motion failed.

Several other lawmakers joined their colleagues in speaking against HB 4. Minority Floor Leader Joni L. Jenkins, D-Shively, said she worries about the burden the bill would place on the state unemployment office, which is currently understaffed.

Rep. Josh Bray, R-Mount Vernon, however, said he believes HB 4 is a “step in the right direction.”

“If you want to bring jobs to Eastern Kentucky, we have to improve our workforce participation rate,” Bray said.

Rep. Phillip Pratt, R-Georgetown, a small business owner, joined in supporting HB 4. Rep. Jason Nemes, R-Louisville, also spoke in support of HB 4, calling it a “good bill.”

HB 4 will now go before the Senate for consideration.

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