Connecticut Seal

General Assembly

File No. 230

    February Session, 2016

Substitute House Bill No. 5367

House of Representatives, March 29, 2016

The Committee on Labor and Public Employees reported through REP. TERCYAK of the 26th Dist., Chairperson of the Committee on the part of the House, that the substitute bill ought to pass.

AN ACT CONCERNING THE TOTAL UNEMPLOYMENT BENEFIT RATE AND AN ONLINE EMPLOYMENT EXCHANGE.

Be it enacted by the Senate and House of Representatives in General Assembly convened:

Section 1. Section 31-231a of the general statutes is repealed and the following is substituted in lieu thereof (Effective October 1, 2016):

(a) For a construction worker identified pursuant to regulations adopted in accordance with subsection (c) of this section, the total unemployment benefit rate for the individual's benefit year commencing on or after April 1, 1996, shall be an amount equal to one twenty-sixth, rounded to the next lower dollar, of his or her total wages paid during that quarter of his or her current benefit year's base period in which wages were the highest but not less than fifteen dollars nor more than the maximum benefit rate as provided in subsection (b) of this section.

(b) For an individual not included in subsection (a) of this section, the individual's total unemployment benefit rate for his or her benefit year commencing after September 30, 1967, shall be an amount equal to one twenty-sixth, rounded to the next lower dollar, of the average of his or her total wages, as defined in subdivision (1) of subsection (b) of section 31-222, paid during the two quarters of his or her current benefit year's base period in which such wages were highest but not less than fifteen dollars, and commencing after October 1, 2016, shall be an amount equal to one twenty-sixth, rounded to the next lower dollar, of the average of his or her total wages, as defined in section 31-222, paid during the four quarters of his or her current benefit year's base period but not less than fifty dollars nor more than one hundred fifty-six dollars in any benefit year commencing on or after the first Sunday in July, 1982, nor more than sixty per cent rounded to the next lower dollar of the average wage of production and related workers in the state in any benefit year commencing on or after the first Sunday in October, 1983, and provided the maximum benefit rate in any benefit year commencing on or after the first Sunday in October, 1988, shall not increase more than eighteen dollars in any benefit year, such increase to be effective as of the first Sunday in October of such year, and further provided the maximum benefit rate shall not increase in benefit years 2016, 2017 and 2018. The average wage of production and related workers in the state shall be determined by the administrator, on or before August fifteenth annually, as of the year ended the previous June thirtieth to be effective during the benefit year commencing on or after the first Sunday of the following October and shall be so determined in accordance with the standards for the determination of average production wages established by the United States Department of Labor, Bureau of Labor Statistics.

(c) The administrator shall adopt regulations pursuant to the provisions of chapter 54 to implement the provisions of this section. Such regulations shall specify the National Council on Compensation Insurance employee classification codes which identify construction workers covered by subsection (a) of this section and specify the manner and format in which employers shall report the identification of such workers to the administrator.

Sec. 2. Section 31-236 of the general statutes is repealed and the following is substituted in lieu thereof (Effective October 1, 2016):

(a) An individual shall be ineligible for benefits:

(1) If the administrator finds that the individual has failed without sufficient cause either to apply for available, suitable work when directed so to do by the Public Employment Bureau or the administrator, or to accept suitable employment when offered by the Public Employment Bureau or by an employer, such ineligibility to continue until such individual has returned to work and has earned at least six times such individual's benefit rate. Suitable work means either employment in the individual's usual occupation or field or other work for which the individual is reasonably fitted, provided such work is within a reasonable distance of the individual's residence. In determining whether or not any work is suitable for an individual, the administrator may consider the degree of risk involved to such individual's health, safety and morals, such individual's physical fitness and prior training and experience, such individual's skills, such individual's previous wage level and such individual's length of unemployment, but, notwithstanding any other provision of this chapter, no work shall be deemed suitable nor shall benefits be denied under this chapter to any otherwise eligible individual for refusing to accept work under any of the following conditions: (A) If the position offered is vacant due directly to a strike, lockout or other labor dispute; (B) if the wages, hours or other conditions of work offered are substantially less favorable to the individual than those prevailing for similar work in the locality; (C) if, as a condition of being employed, the individual would be required to join a company union or to resign from or refrain from joining any bona fide labor organization; (D) if the position offered is for work which commences or ends between the hours of one and six o'clock in the morning if the administrator finds that such work would constitute a high degree of risk to the health, safety or morals of the individual, or would be beyond the physical capabilities or fitness of the individual or there is no suitable transportation available from the individual's home to or from the individual's place of employment; or (E) if, as a condition of being employed, the individual would be required to agree not to leave such position if recalled by the individual's former employer;

(2) (A) If, in the opinion of the administrator, the individual has left suitable work voluntarily and without good cause attributable to the employer, until such individual has earned at least ten times such individual's benefit rate, provided whenever an individual voluntarily leaves part-time employment under conditions that would render the individual ineligible for benefits, such individual's ineligibility shall be limited as provided in subsection (b) of this section, if applicable, and provided further, no individual shall be ineligible for benefits if the individual leaves suitable work (i) for good cause attributable to the employer, including leaving as a result of changes in conditions created by the individual's employer, (ii) to care for the individual's spouse, child, or parent with an illness or disability, as defined in subdivision [(16)] (17) of this subsection, (iii) due to the discontinuance of transportation, other than the individual's personally owned vehicle, used to get to and from work, provided no reasonable alternative transportation is available, (iv) to protect the individual, the individual's child, the individual's spouse or the individual's parent from becoming or remaining a victim of domestic violence, as defined in section 17b-112a, provided such individual has made reasonable efforts to preserve the employment, but the employer's account shall not at any time be charged with respect to any voluntary leaving that falls under subparagraph (A)(iv) of this subdivision, (v) for a separation from employment that occurs on or after July 1, 2007, to accompany a spouse who is on active duty with the armed forces of the United States and is required to relocate by the armed forces, but the employer's account shall not at any time be charged with respect to any voluntary leaving that falls under subparagraph (A)(v) of this subdivision, or (vi) to accompany such individual's spouse to a place from which it is impractical for such individual to commute due to a change in location of the spouse's employment, but the employer's account shall not be charged with respect to any voluntary leaving under subparagraph (A)(vi) of this subdivision; or (B) if, in the opinion of the administrator, the individual has been discharged or suspended for felonious conduct, conduct constituting larceny of property or service, the value of which exceeds twenty-five dollars, or larceny of currency, regardless of the value of such currency, wilful misconduct in the course of the individual's employment, or participation in an illegal strike, as determined by state or federal laws or regulations, until such individual has earned at least ten times the individual's benefit rate; provided an individual who (i) while on layoff from regular work, accepts other employment and leaves such other employment when recalled by the individual's former employer, (ii) leaves work that is outside the individual's regular apprenticeable trade to return to work in the individual's regular apprenticeable trade, (iii) has left work solely by reason of governmental regulation or statute, or (iv) leaves part-time work to accept full-time work, shall not be ineligible on account of such leaving and the employer's account shall not at any time be charged with respect to such separation, unless such employer has elected payments in lieu of contributions;

(3) During any week in which the administrator finds that the individual's total or partial unemployment is due to the existence of a labor dispute other than a lockout at the factory, establishment or other premises at which the individual is or has been employed, provided the provisions of this subsection do not apply if it is shown to the satisfaction of the administrator that (A) the individual is not participating in or financing or directly interested in the labor dispute that caused the unemployment, and (B) the individual does not belong to a trade, class or organization of workers, members of which, immediately before the commencement of the labor dispute, were employed at the premises at which the labor dispute occurred, and are participating in or financing or directly interested in the dispute; or (C) the individual's unemployment is due to the existence of a lockout. A lockout exists whether or not such action is to obtain for the employer more advantageous terms when an employer (i) fails to provide employment to its employees with whom the employer is engaged in a labor dispute, either by physically closing its plant or informing its employees that there will be no work until the labor dispute has terminated, or (ii) makes an announcement that work will be available after the expiration of the existing contract only under terms and conditions that are less favorable to the employees than those current immediately prior to such announcement; provided in either event the recognized or certified bargaining agent shall have advised the employer that the employees with whom the employer is engaged in the labor dispute are ready, able and willing to continue working pending the negotiation of a new contract under the terms and conditions current immediately prior to such announcement;

(4) During any week with respect to which the individual has received or is about to receive remuneration in the form of (A) wages in lieu of notice or dismissal payments, including severance or separation payment by an employer to an employee beyond the employee's wages upon termination of the employment relationship, unless the employee was required to waive or forfeit a right or claim independently established by statute or common law, against the employer as a condition of receiving the payment, or any payment by way of compensation for loss of wages, or any other state or federal unemployment benefits, except mustering out pay, terminal leave pay or any allowance or compensation granted by the United States under an Act of Congress to an ex-serviceperson in recognition of the ex-serviceperson's former military service, or any service-connected pay or compensation earned by an ex-serviceperson paid before or after separation or discharge from active military service, or (B) compensation for temporary disability under any workers' compensation law;

(5) Repealed by P.A. 73-140;

(6) If the administrator finds that the individual has left employment to attend a school, college or university as a regularly enrolled student, such ineligibility to continue during such attendance;

(7) Repealed by P.A. 74-70, S. 2, 4;

(8) If the administrator finds that, having received benefits in a prior benefit year, the individual has not again become employed and been paid wages since the commencement of said prior benefit year in an amount equal to the greater of three hundred dollars or five times the individual's weekly benefit rate by an employer subject to the provisions of this chapter or by an employer subject to the provisions of any other state or federal unemployment compensation law;

(9) If the administrator finds that the individual has retired and that such retirement was voluntary, until the individual has again become employed and has been paid wages in an amount required as a condition of eligibility as set forth in subdivision (3) of section 31-235; except that the individual is not ineligible on account of such retirement if the administrator finds (A) that the individual has retired because (i) such individual's work has become unsuitable considering such individual's physical condition and the degree of risk to such individual's health and safety, and (ii) such individual has requested of such individual's employer other work that is suitable, and (iii) such individual's employer did not offer such individual such work, or (B) that the individual has been involuntarily retired;

(10) Repealed by P.A. 77-426, S. 6, 19;

(11) Repealed by P.A. 77-426, S. 6, 19;

(12) Repealed by P.A. 77-426, S. 17, 19;

(13) If the administrator finds that, having been sentenced to a term of imprisonment of thirty days or longer and having commenced serving such sentence, the individual has been discharged or suspended during such period of imprisonment, until such individual has earned at least ten times such individual's benefit rate;

(14) If the administrator finds that the individual has been discharged or suspended because the individual has been disqualified under state or federal law from performing the work for which such individual was hired as a result of a drug or alcohol testing program mandated by and conducted in accordance with such law, until such individual has earned at least ten times such individual's benefit rate;

(15) If the individual is a temporary employee of a temporary help service and the individual refuses to accept suitable employment when it is offered by such service upon completion of an assignment until such individual has earned at least six times such individual's benefit rate; [and]

(16) During any week in which the administrator finds that the individual, having commenced a claim for benefits on or after January 1, 2017, has failed to post his or her resume on an online employment exchange designated by the administrator and designed for employers and job seekers in the state after the sixth consecutive week of collecting benefits under this chapter. The administrator may adopt regulations, in accordance with the provisions of chapter 54, to implement the provisions of this subdivision; and

[(16)] (17) For purposes of subparagraph (A)(ii) of subdivision (2) of this subsection, "illness or disability" means an illness or disability diagnosed by a health care provider that necessitates care for the ill or disabled person for a period of time longer than the employer is willing to grant leave, paid or otherwise, and "health care provider" means (A) a doctor of medicine or osteopathy who is authorized to practice medicine or surgery by the state in which the doctor practices; (B) a podiatrist, dentist, psychologist, optometrist or chiropractor authorized to practice by the state in which such person practices and performs within the scope of the authorized practice; (C) an advanced practice registered nurse, nurse practitioner, nurse midwife or clinical social worker authorized to practice by the state in which such person practices and performs within the scope of the authorized practice; (D) Christian Science practitioners listed with the First Church of Christ, Scientist in Boston, Massachusetts; (E) any medical practitioner from whom an employer or a group health plan's benefits manager will accept certification of the existence of a serious health condition to substantiate a claim for benefits; (F) a medical practitioner, in a practice enumerated in subparagraphs (A) to (E), inclusive, of this subdivision, who practices in a country other than the United States, who is licensed to practice in accordance with the laws and regulations of that country; or (G) such other health care provider as the Labor Commissioner approves, performing within the scope of the authorized practice. For purposes of subparagraph (B) of subdivision (2) of this subsection, "wilful misconduct" means deliberate misconduct in wilful disregard of the employer's interest, or a single knowing violation of a reasonable and uniformly enforced rule or policy of the employer, when reasonably applied, provided such violation is not a result of the employee's incompetence and provided further, in the case of absence from work, "wilful misconduct" means an employee must be absent without either good cause for the absence or notice to the employer which the employee could reasonably have provided under the circumstances for three separate instances within a twelve-month period. Except with respect to tardiness, for purposes of subparagraph (B) of subdivision (2) of this subsection, each instance in which an employee is absent for one day or two consecutive days without either good cause for the absence or notice to the employer which the employee could reasonably have provided under the circumstances constitutes a "separate instance". For purposes of subdivision (15) of this subsection, "temporary help service" means any person conducting a business that consists of employing individuals directly for the purpose of furnishing part-time or temporary help to others; and "temporary employee" means an employee assigned to work for a client of a temporary help service.

(b) Any individual who has voluntarily left part-time employment under conditions which would otherwise render him or her ineligible for benefits pursuant to subparagraph (A) of subdivision (2) of subsection (a) of this section, who has not earned ten times his or her benefit rate since such separation and who is otherwise eligible for benefits shall be eligible to receive benefits only as follows: (1) If such separation from the individual's part-time employment precedes a compensable separation, under the provisions of this chapter, from his or her full-time employment, he or she shall be eligible to receive an amount equal to the benefits attributable solely to the wages paid to him or her for any employment during his or her base period other than such part-time employment; or (2) if such separation from the individual's part-time employment follows a compensable separation, under the provisions of this chapter, from his or her full-time employment, he or she shall be eligible to receive an amount equal to the lesser of the partial unemployment benefits he or she would have received under section 31-229 but for such separation from his or her part-time employment or the partial unemployment benefits for which he or she would be eligible under section 31-229 based on any subsequent part-time employment. In no event may the employer who provided such part-time employment for the individual be charged for any benefits paid pursuant to the subsection. For purposes of this subsection, "full-time employment" means any job normally requiring thirty-five hours or more of service each week, and "part-time employment" means any job normally requiring less than thirty-five hours of service each week.

This act shall take effect as follows and shall amend the following sections:

Section 1

October 1, 2016

31-231a

Sec. 2

October 1, 2016

31-236

LAB

Joint Favorable Subst.

 

The following Fiscal Impact Statement and Bill Analysis are prepared for the benefit of the members of the General Assembly, solely for purposes of information, summarization and explanation and do not represent the intent of the General Assembly or either chamber thereof for any purpose. In general, fiscal impacts are based upon a variety of informational sources, including the analyst's professional knowledge. Whenever applicable, agency data is consulted as part of the analysis, however final products do not necessarily reflect an assessment from any specific department.

OFA Fiscal Note

State Impact:

Agency Affected

Fund-Effect

FY 17 $

FY 18 $

Labor Dept.

UCF - Savings

Up to 107.8 million

Up to 143.2 million

Labor Dept.

UCF - Cost

112,320

224,640

Labor Dept.

UCF - Cost

Potential Significant

None

Note: UCF=Unemployment Compensation Fund

Municipal Impact: None

Explanation

The bill makes various unemployment benefits-related changes which result in an estimated savings to the Unemployment Compensation Fund (UCF) of up to $107.8 million in FY 17 and up to $143.2 million in FY 18, as well as an estimated cost to the UCF of $112,320 in FY 17 and $224,640 in FY 18 and a one-time potentially significant cost in FY 17.

Increasing, from $600 to $2,000, the minimum base period earnings required to qualify for unemployment benefits is estimated to result in an annualized savings of up to $5.6 million to the UCF. Based on unemployment claims data from 2015, it is estimated that this change would disqualify up to 9,300 claimants that are currently eligible.1

Modifying the unemployment benefit calculation based on average wages over four quarters results in an estimated annualized savings of approximately $136 million to the UCF. Based on unemployment claims data from 2015, it is estimated that this change would decrease the weekly benefit received by approximately 130,000 claimants. 2

Freezing the maximum unemployment benefit rate at the current value of $598 through 2018 results in an annual savings of $1.6 million to the UCF in 2017 and 2018. This estimate assumes an average annual increase of $5, which is the approximate amount of increase in recent years.

Requiring unemployment benefit recipients to post a resume online is anticipated to result in an increased cost to the Labor Department associated with additional adjudication hearings for claimants who are out of compliance with the requirement. Specifically, it is anticipated that additional personnel would be necessary to accommodate the workload at an annualized cost of approximately $224,640 ($120,000 for salary and $104,640 for fringe costs).

It is anticipated that implementing the benefits changes under the bill's provisions would also result in a significant one-time cost to the UCF associated with system programming and other information technology changes.

The Out Years

The annualized ongoing fiscal impact identified above would continue into the future subject to inflation, with the exception of the freezing of the maximum unemployment benefit rate which expires in 2018.

Sources:

Labor Department Unemployment Division Statistics

OLR Bill Analysis

sHB 5367

AN ACT CONCERNING THE TOTAL UNEMPLOYMENT BENEFIT RATE AND AN ONLINE EMPLOYMENT EXCHANGE.

SUMMARY:

This bill makes several changes to unemployment benefits and eligibility requirements for receiving them. It:

None of the above changes apply to construction workers' unemployment benefits or eligibility.

For all unemployment benefits claimants, the bill also (1) freezes the maximum benefit cap through 2018 and (2) requires claimants who file for benefits after January 1, 2017 to post their resumes on an online employment exchange after they receive benefits for six consecutive weeks.

EFFECTIVE DATE: October 1, 2016

MINIMUM BENEFITS AND EARNINGS

The bill increases the minimum weekly unemployment benefit for non-construction workers from $15 to $50. Because the law requires claimants to have earned at least 40 times their weekly benefit during their base period to qualify for benefits, increasing the minimum benefit also increases what claimants must earn over the course of their base period to qualify for benefits (CGS 31-235). Thus, to qualify for the bill's $50 minimum weekly benefit, claimants must earn at least $2,000 ($50 x 40) over their base period, instead of the $600 required by current law.

BENEFIT DETERMINATIONS

Under current law, a claimant's weekly unemployment benefit is calculated as one twenty-sixth of the claimant's average quarterly wages during the two highest earning quarters of his or her base period. For example, if claimant “A” earns $10,000 per quarter in two quarters and $5,000 per quarter in two quarters, he receives a $384 weekly benefit (1/26 of $10,000). And if claimant “B” earns $10,000 per quarter in all four quarters, he also receives a $384 benefit.

The bill instead requires benefits for non-construction worker claimants to be calculated as one twenty-sixth of the claimant's average quarterly wages during the four quarters of his or her base period. Under this formula, claimant A would receive a $288 weekly benefit (1/26 of $7,500) while claimant B's benefit would remain $384 (1/26 of $10,000).

MAXIMUM BENEFIT CAP FREEZE

The law caps the maximum benefit allowed for any unemployment claimant at 60% of the average wage paid to the state's production (i.e., manufacturing) workers. The labor commissioner adjusts the cap on the first Sunday of each October but cannot increase it more than $18 each year. The bill freezes the cap at its current value ($598) for anyone who files for unemployment in 2016, 2017, or 2018.

ONLINE RESUME POSTING

The bill requires claimants who file for unemployment benefits after January 1, 2017 to post their resumes on an online employment exchange after they receive benefits for six consecutive weeks. Claimants are ineligible for benefits during any week in which the labor commissioner finds they failed to do so. The online exchange must be one designated by the labor commissioner and designed for the state's employers and job seekers. The commissioner may adopt regulations to implement the bill's online resume requirement.

BACKGROUND

Related Bills

sHB 5369, reported favorably by the Labor and Public Employees Committee, requires the maximum benefit cap to be 50% of the statewide average wage, rather than 60% of the average production wage.

COMMITTEE ACTION

Labor and Public Employees Committee

Joint Favorable Substitute

Yea

13

Nay

0

(03/10/2016)

TOP

1 It is possible that some of these claimants would be eligible for unemployment benefits under an alternate wage calculation. Thus, the savings estimate represents a maximum impact to the UCF.

2 The increase in minimum base period earnings requirement and four-quarter calculation method do not apply to construction workers.