Senate Labor and Industry Committee Moves to Extend Federal Unemployment Benefits and Save State Costs

(HARRISBURG) - - The Senate Labor and Industry Committee today approved legislation that will continue federal unemployment compensation benefits through the end of the year, and at the same time, institute reforms in the Pennsylvania unemployment compensation system that will result in an estimated $50 million in annual savings. Senate Bill 1030, approved unanimously, was authored by the Committee's Chair, Senator John R. Gordner (R-27).

"On June 11, approximately 45,000 unemployed Pennsylvanians who currently qualify for federal extended benefits will be dropped from the unemployment rolls unless we slightly modify the state law," said Senator Gordner. "It costs the state no money to qualify for these fully funded federal benefits through the end of the year, and results in an estimated $150 million in economic benefits."

Additionally, the Committee approved an amendment by Senator Gordner to institute several reforms in the Unemployment Compensation law, as well as update obsolete provisions in the law. These reforms include:

A new requirement for unemployment compensation recipients to search for work, replacing an obsolete and unenforceable provision in current law.
A partial offset for those who receive severance payments in addition to unemployment compensation.
A change in the way the maximum weekly benefit is calculated to slow benefit growth.
Automatic relief from compensation charges for employers when it is later determined a former employee does not qualify for benefits.

The Committee also approved an amendment by Senator Charles McIlhinney (R-Bucks) to institute a voluntary work share agreement in workplaces to avoid mass layoffs. Under work share, employees and the employer may agree to reduce hours for workers instead of reducing the workforce, and then allowing the employees to qualify for partial benefits.

"None of these changes reduce current benefits, but will save the state about $50 million annually by slowing the rate of benefit growth," said Senator Gordner. "This is an important first step in addressing our unemployment compensation debt."

Senator Gordner said he will work to pass Senate Bill 1030 by the end of May so that the House of Representatives has time to take up the legislation prior to the June 11 deadline.