Labor and Public Employees Committee

JOINT FAVORABLE REPORT

Bill No.:

HB-5367

Title:

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

Vote Date:

3/10/2016

Vote Action:

Joint Favorable Substitute

PH Date:

3/3/2016

File No.:

SPONSORS OF BILL:

Labor and Public Employees Committee

Rep. Jason Rojas, 9th Dist.

Rep. John K. Hampton, 16th Dist.

Rep. Jeffrey J. Berger, 73rd Dist.

Rep. Caroline Simmons, 144th Dist.

Rep. David Alexander, 58th Dist.

Rep. David Arconti, 109th Dist.

Rep. David Zoni, 81st Dist.

Rep. Michelle L. Cook, 65th Dist.

Rep. Theresa W. Conroy, 105th Dist.

Rep. Pam Staneski, 119th Dist.

REASONS FOR BILL:

To set a person's unemployment benefit rate using a year of wages; to put a three-year cap on how much a person can claim for unemployment benefits; and to make sure that people receiving benefits post a resume to find employment to keep receiving benefits.

**Substitute Language (LCO #2985): Specifies that a claimant is only disqualified from benefits in each week that he or she fails to post a resume online.

RESPONSE FROM ADMINISTRATION/AGENCY:

Scott D, Jackson, Commissioner, Connecticut Department of Labor: Opposes the bill. He believes any proposed changes to the Unemployment Insurance system should be done in the context of a comprehensive reform package regarding the eligibility for and financing of unemployment insurance (UI) benefits. Portions of the provisions of the bill do not conform to federal unemployment compensation requirements and would be catastrophic to the DOL and the business community. He further states the bill would negatively impact claimants by increasing their threshold to qualify for benefits and place a huge burden on the Department and would negatively impact ongoing information technology processes in the Department for a long time.

NATURE AND SOURCES OF SUPPORT:

Coalition of Connecticut Chambers of Commerce: The bill would protect the Unemployment Compensation Trust Fund by adopting measures that are effective in neighboring states.

Eric W. Gjede, Assistant Counsel, Connecticut Business and Industry Association: Supports this bill as it would set the maximum benefit rate is allowed to increase by $18 every year. Freezing this for three years could save as much as $10 million per year, and it would start basing benefits on an employee's annual salary rather than two highest quarters, that avoid inequitably rewarding seasonal workers.

Home Builders and Remodelers Association of Connecticut: Supports this bill as the state's unemployment compensation system needs to be fixed so that businesses in the state can be competitive with other states, particularly surrounding states. Employers in the three immediate neighbor states (MA, NY and RI) all pay far less in Unemployment taxes than those located in Connecticut.

MetroHartford Alliance: Supports this bill as it makes important reforms to Connecticut's unemployment compensation benefits, bringing us more in line with neighboring states.

National Federation of Independent Business: Supports this bill as the modest reforms included, from increasing the base wages to at least $2,000 from the current $600, have not been updated for over thirty years, and dramatically lags that of many other and surrounding states.

David Krechevsky, Director, Public Policy and Economic Development, Waturbury Regional Chamber: supports this bill as employers in the state are paying more toward federal unemployment taxes for the fifth consecutive year as the state repays more than $1 billion it borrowed from the federal government to cover unemployment costs during the recession.

NATURE AND SOURCES OF OPPOSITION:

Lori J. Pelletier, President, Connecticut AFL-CIO: Opposes this bill, as in her words, requiring employees to post resumes online while simultaneously gutting the Department of Labor's department responsible for assisting unemployed workers is absurd. The State should learn from other IT mistakes before expanding requirements tied to families' finances.

George Wentworth, National Employment Law Center: Opposes this bill as the rapid short term increase in receiving wages would be detrimental to those seeking work and receiving benefits. A more sensible long term solvency solution would be to index the rate at which it would have been sixteen years ago and continuing on from there.

Reported by: Joshua F. Quintana

Date: 3/23/2016