Bill before Senate would reform unemployment benefits

The minimum yearly earnings needed to be qualified for unemployment benefits in Connecticut is $600, the third lowest requirement in the nation. The law was set in place in 1967 and has not been raised since. Adjusted for inflation, this figure would be $4,277.82 by today’s standards.

A bill before the state Senate would raise Connecticut’s work requirement to $2,000 yearly and make several other adjustments to its unemployment calculations to put the state on equal footing with its neighbors. H.B. 5367 will raise the amount an individual has to earn in a year in order to qualify for unemployment benefits, use an individual’s yearly earnings to calculate benefits, place a three year freeze on benefit increases and require that recipients post their resume online to attract job recruiters.

Typically benefit rates are calculated using an individual’s two highest quarterly earnings. However, the proposed change would use the entire year’s earnings, thereby adjusting the payout to meet realistic earning levels. Also, benefits increase by up to $18 dollars yearly but the three year freeze will cap payments at current levels.

It is estimated that these changes will save $251 million over the next two years, although total costs to hire administrative staff are unknown at this point.

The bill has been avidly supported by business associations and opposed by state unions and the National Employment Law Project. The Metro-Hartford Alliance and the Connecticut Business and Industry Association testified that Connecticut’s unemployments taxes have been some of the heaviest in the country. David Krechevsky of the Waterbury Regional Chamber said that current unemployment laws make it “less likely” that companies will “invest in their businesses and expand their workforces.”

But there has been good news for Connecticut businesses. The Department of Labor announced in March that the state had completely paid back the $1 billion loan taken from the federal government to cover unemployment benefits following the recession. This means that unemployment insurance costs on Connecticut businesses will drop from $187 to the standard $42 per employee.

The Connecticut unemployment fund risked becoming insolvent in 2009 when unemployment benefit requests skyrocketed, necessitating the loan. Business leaders believe these reforms will help the state avoid such risks in the future.

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Marc E. Fitch

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