PA Legislators Consider Unemployment Compensation Reforms

By June 11th, the state must change its unemployment compensation rules to meet federal guidelines, or 45,000 Pennsylvanians will lose their unemployment benefits.

Gov. Corbett has been supportive of more significant unemployment compensation reforms, including enhanced work requirements and prohibiting individuals from collecting unemployment compensation benefits while they are receiving severance pay equal to or greater than UC benefits.

HB 916, sponsored by Rep. Scott¬†Perry, follows Corbett’s significant reforms, including limiting benefits, and would pay off the commonwealth’s $3.7 billion UC debt to the federal government by 2018. Only California, New York, and Michigan owe more.¬† HB 916 is supported by the Manufacturer and Business Association and by the PA Chamber. The Department of Labor and Industry estimates annual savings of $632 million.

SB 1030, sponsored by Sen. John Gordner, takes a more modest approach by reducing benefits while adding more stringent job search requirements. The estimated savings are $50 million per year.

Pennsylvania already has one of the highest unemployment tax rates per employee. Pennsylvania’s unemployment compensation fund will only be sustainable by adopting true reforms that address cost-drivers and eligibility, without making it more expensive for employers to hire workers.

EDITORS NOTE: The original post indicated SB 1030 would increase employer UC taxes, that is not a component of the current legislation.