Gordner Bill to Continue Federal Unemployment Benefits and Save State Costs Heading to Governor

(HARRISBURG) – -The Senate today approved a final version of 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 almost $120 million in annual savings. Senate Bill 1030, authored by Senator John R. Gordner (R-27), is expected to be signed by Governor Tom Corbett later today.

“Approximately 45,000 unemployed Pennsylvanians who currently qualify for federal extended benefits would have been dropped from the unemployment rolls, so I am extremely pleased we reached agreement,” 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 contained several provisions by Senator Gordner to institute reforms in the Unemployment Compensation law, as well as update obsolete provisions in the law. These reforms included:

  • 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.

The House of Representatives added several reforms that were agreed to by the Senate, including:

  • An increase in the amount of wages needed to earn a credit week for benefits, last adjusted in 1980.
  • Adjustment of the minimum weekly benefit rate to reflect the cost of inflation since this provision was last adjusted in 1980.
  • Institution of a variable claim duration so that claimants cannot qualify for more weeks of benefits than weeks worked.

“None of these changes reduce current benefits, but will save the state nearly $120 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 also commended House negotiators on the bill, including Majority Leader Mike Turzai (R-Allegheny), Labor and Industry Committee Chairman Ron Miller (R-York) and Labor and Industry Committee Minority Chairman Bill Keller (D-Philadelphia). “A bill like this is very complicated and talks can sometimes get contentious, but that was not the case on this legislation,” said Senator Gordner.

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.