Connecticut Seal

General Assembly

File No. 232

    February Session, 2016

Substitute House Bill No. 5369

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 AN ADJUSTMENT TO THE METHOD FOR DETERMINING THE MAXIMUM WEEKLY UNEMPLOYMENT BENEFIT RATE.

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 Section 31-231a of the general statutes is repealed and the following is substituted in lieu thereof (Effective July 1, 2016):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 total wages paid during that quarter of his 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 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 total wages, as defined in subdivision (1) of subsection (b) of section 31-222, paid during the two quarters of his current benefit year's base period in which such wages were highest but not less than fifteen 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] fifty 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. 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] March thirty-first 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 the average [production wages established by the United States Department of Labor, Bureau of Labor Statistics] wage of workers in the state calculated pursuant to the Connecticut Quarterly Census of Employment and Wages or such other method that accurately reflects the average wage of workers in the state as prescribed by the administrator.

(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.

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

Section 1

July 1, 2016

31-231a

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 - Uncertain

See Below

See Below

Note: UCF=Unemployment Compensation Fund

Municipal Impact: None

Explanation

The bill alters the methodology by which the maximum unemployment benefit rate is determined. Specifically, the bill changes the formula for deriving the benefit cap from 60% of the average wage paid to the state's production workers to 50% of the average wage of all workers in the state or another method prescribed by the Labor Commissioner. The impact on the Unemployment Compensation Fund (UCF) is uncertain as the bill does not require a single methodology for determining the maximum benefit; thus, the bill may result in a cost, savings, or no impact to the UCF depending on the methodology actually employed.

The Out Years

The annualized ongoing fiscal impact identified above would continue into the future subject to annual adjustments in the maximum unemployment benefit rate.

OLR Bill Analysis

sHB 5369

AN ACT CONCERNING AN ADJUSTMENT TO THE METHOD FOR DETERMINING THE MAXIMUM WEEKLY UNEMPLOYMENT BENEFIT RATE.

SUMMARY:

This bill changes how the maximum unemployment benefit cap is determined. Current law caps a claimant's unemployment benefits at 60% of the average wage paid to the state's production (i.e., manufacturing) workers, as determined under the U.S. Bureau of Labor Statistics' standards for determining average production wages. The bill instead requires the cap to be 50% of the average wage of all workers in the state, as calculated under the Connecticut Quarterly Census of Employment and Wages or another method prescribed by the commissioner that accurately reflects the average wage of workers in the state.

Under current law, the average wage is determined for each year ending June 30. The bill instead requires it to be determined for each year ending March 31. By law, unchanged by the bill, the commissioner must annually determine a new cap by August 15. It becomes effective on the first Sunday of October but cannot increase more than $18 each year.

EFFECTIVE DATE: July 1, 2016

BACKGROUND

Related Bill

sHB 5367, reported favorably by the Labor and Public Employees Committee, freezes the maximum benefit cap at its current value ($598) for anyone who files for unemployment through 2018.

COMMITTEE ACTION

Labor and Public Employees Committee

Joint Favorable Substitute

Yea

13

Nay

0

(03/10/2016)

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