House Moves Unemployment Compensation Reform

More Unemployment Compensation reform is moving through the Pennsylvania House. Yesterday, HB 1754 sponsored by Rep. Ron Miller, and HB 1852 sponsored by Rep. Seth Grove, cleared the Labor and Industry Committee. Both bills are designed to strengthen anti-fraud provisions.

Specifically, HB 1754 would establish a definitive definition of “willful misconduct.” Currently the vague definition often allows employees who are fired for their own misconduct to collect unemployment benefits. HB 1852 increases the number of weeks individuals who commit UC fraud are barred from collecting benefits, called penalty weeks, from four to 10 weeks. The bill also removes the four-year limit on the imposition of penalty weeks.

Pennsylvania’s Unemployment Compensation system is broken and bankrupt. The state paid $227 million in fraudulent claims last year and still owes about $3 billion in loans. The state started borrowing money from the federal government to pay claims in March 2009 and ran up a debt of almost $4 billion at its peak.

These bills are a step in the right direction, but far from the substantive reform the House dismissed last spring.