Act No. 124

(S.290)

Labor; unemployment compensation

This act makes changes to the unemployment compensation statutes affecting the amount of contributions paid by employers into the trust fund and the amount of benefits a claimant can receive. It makes changes to the laws regarding misconduct and gross misconduct. It also requires the department of labor to make an annual report on the health of the unemployment trust fund to the appropriate legislative committees.

Impacts on employers

The act increases the taxable wage base to $13,000.00 in 2011 and to $16,000.00 in 2012. After reaching $16,000.00 the taxable wage base is indexed to the growth of the annual average wage when the trust fund has a positive balance. When the contribution rate schedule is reduced to schedule III, the contribution amount is decreased by $2,000.00 and then indexed. When the rate schedule is reduced to schedule I, the contribution amount is reduced by $2,000.00 and then indexed.

Impacts on claimants

The act freezes the maximum weekly benefit amount at $425.00 until the trust fund has a positive balance, at which point the weekly benefit is increased annually by the percentage change in the state annual average weekly wage. When the unemployment contribution rate schedule is at schedule III, the benefit amount is increased to an amount equal to 57 percent of the state annual average weekly wage.

Beginning in 2012, the act implements a one-week waiting period before an individual may receive benefits. The waiting period is repealed in 2017 or when the unemployment fund has a positive balance, whichever occurs later.

The act would change the earnings disregard from 30 percent of the benefit amount to 30 percent of wages. This would allow a claimant who is partially unemployed to earn up to 30 percent of his or her weekly wage before seeing a reduction in benefits.

The act limits the maximum yearly benefit an individual can receive to the lesser of either 26 weeks of benefits or 46 percent of the total wages paid to the individual during his or her base period. The act also disqualifies a claimant from receiving severance pay and benefits at the same time.

Misconduct provisions

The act limits benefits to 23 weeks for a claimant fired for misconduct. It expands the period that an individual can be disqualified from receiving benefits for committing misconduct up to 15 weeks. It clarifies the definition of "gross misconduct" and prohibits a person who is fired for gross misconduct from using the wages paid by that employer to qualify for benefits.

Study, reports, and department of labor provisions

The act creates a committee to study the feasibility of implementing a self-employment assistance program. It requires the department of labor to make a report on January 15, 2015, on the implementation of the one-week waiting period and to work with the joint fiscal office to improve the office's ability to model changes to the unemployment trust fund. It also requires the department of labor to make an annual report to the appropriate legislative committees on the health of the unemployment trust fund.

Date Signed by the Governor:  May 24, 2010

Effective Date:  The one-week waiting period and disregarded earnings provisions take effect on July 1, 2012. The sections regarding weekly benefits, variable duration, elimination of severance pay, and disqualification from benefits for misconduct take effect July 1, 2011. The sections regarding the definition of "gross misconduct" and the period of disqualification for misconduct take effect on passage (May 24, 2010, the date on which the governor signed the bill). All other sections take effect on July 1, 2010.