Senate Approves Gordner Bill to Continue Federal Unemployment Benefits and Save State Costs

(HARRISBURG) - - The Senate today unanimously 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 to $60 million in annual savings. Senate Bill 1030, authored by Senator John R. Gordner (R-27), now moves to the House of Representatives.

"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."

Senate Bill 1030 contains several provisions by Senator Gordner to institute 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 legislation also contains provisions 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 at least $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 noted that the federal extended benefit program will expire at the end of 2011 because Pennsylvania's unemployment rate has dropped below 8%, which is considered a High Unemployment Period by the federal government. In addition to the 45,000 unemployed Pennsylvanians who will continue to receive benefits with the enactment of Senate Bill 1030, another 65,000 residents may qualify for the federal program until it expires.