AFL-CIO goes after HB 394


State Rep. Barbara Sears has introduced legislation, House Bill 394, that would drastically overhaul Ohio’s unemployment compensation (UC) system. The bill would dramatically reduce benefits and create new hurdles to get them in the first place.

The bill changes the calculation of the minimum safe level (MSL), which is used for purposes of Unemployment Compensation Fund (the Fund) solvency measures, to an amount equal to the average high cost multiple, a measure based on the Fund’s three highest cost years and used by the U.S. Department of Labor to determine eligibility for interest free advances.

“This legislation is fundamentally flawed as it seeks to shore up the unemployment compensation system solely through hundreds of millions of dollars in cuts to displaced worker benefits. Independent experts agree that any solvency problems are a result of businesses short changing the system for far too long which is being ignored in this proposal,” Tim Burga, President of Ohio AFL-CIO, said. “While the sponsor has suggested she will move on some minor issues through the amendment process, the bill remains completely out of balance by placing the burden on the backs of the very working people that the unemployment compensation system was designed to help. The bill still relies solely on benefit cuts for unemployed workers while businesses will effectively get a tax cut.”

HB 394 raises the taxable wage base from $9,000 to $11,000 on January 1 of any year following a computation date on which the Fund is at or below 50 percent of the MSL. The provision takes effect June 30, 2017 and the increase is likely to take effect January 1, 2018, based on projected Fund balance.

For any contribution period (calendar year) following a computation date on which the Director of Job and Family Services (Director) determines that the Fund is at or above the MSL, lowers the new employer rate for nonconstruction employers from 2.7 to 1 percent and returns the taxable wage base to $9,000.

“Governor Kasich has called for the general assembly to work with labor and business to find a balance approach, which has not occurred,” Burga said. “I call on the authors of this bill and all legislators to start over from scratch to include the interests of working people and what’s best for all stakeholders.”

Eligibility requires an individual to have earned wages in at least three of the four calendar quarters used under continuing law as the individual’s “base period” to be eligible to receive unemployment benefits and requires an individual who has applied for unemployment benefits to take a drug test as part of the individual’s eligibility determination under certain circumstances.

“Slashing worker benefits and lowering employer taxes is not a balanced solvency plan,” Zach Schiller, Policy Matters Ohio research director, said. “This overhaul needs an overhaul if it is to meet the needs of the Ohio economy, as well as Ohio workers and employers.”

By Frank Lewis

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Reach Frank Lewis at 740-353-3101, ext. 1928, or on Twitter @franklewis.

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