House UC Bill Would Cut over $600 million in UC Benefits, Asks Employers to Pay Nothing

Pennsylvania HB 916 makes fundamental changes to almost every aspect of the benefits side of the unemployment compensation (UC) program.  It would harm Pennsylvania’s hundreds of thousands of unemployed workers by cutting over $600 million in UC benefits, but not fix the structural defects in the financing that caused the current insolvency of the UC Trust Fund.  To the extent that it addresses trust fund insolvency, it unfairly puts the entire burden on the unemployed through benefits cuts and puts no responsibility on the employer community.

HB 916 would harm Pennsylvania’s unemployed workers in the following ways.

• Lowering benefits amounts ($463 million in cuts annually) and reducing the number of weeks that some unemployed could get benefits ($48 million in cuts annually).
• Changing the definition of “willful misconduct” to deny UC benefits to workers whose mistakes were not intentional.
• Denying UC benefits to workers forced to leave their jobs for family or medical reasons — those fleeing domestic violence, dealing with lost child or elder care, providing care for sick family members, or suffering from medical conditions that prevent them from performing their jobs.
• Offsetting 100% of severance payments, even if those payments are required by law or contract.

HB 916 does not address the main problem of UC trust fund insolvency:  The taxable wage base (TWB) of $8,000 on which employers pay taxes has not been raised since 1984.  There simply is not enough revenue in the UC system to pay benefits.  HB 916 would allow employers to continue not paying their fair share.

•  If the TWB had been indexed for inflation, it would now be $21,500.
• Nationally, the average TWB is $12,200.  39 states have a higher TWB than Pennsylvania, with14 states over $20,000.  Pennsylvania is out of the mainstream in having such a low TWB.
• State UC taxes cost Pennsylvania employers an average of only 15 cents per hour, out of an average total hourly compensation rate of $21.36.

HB 916 harms Pennsylvania’s unemployed, who already are suffering despite getting UC benefits.

• UC benefits provide no more than 50% wage replacement for the unemployed.
• The average UC check in Pennsylvania is $314 per week, less than the poverty level for a family of 3 of $352 per week.

The UC issue that actually requires urgent attention of the General Assembly is the need for a technical amendment that will allow federally funded Extended Benefits (EB) to continue after June 11th.

• Unless such a bill is passed by June 11^th, 45,000 long-term unemployed Pennsylvanians will be cut off of their federally funded EB benefits on that date.  An addition 90,000 workers will lose EB benefits by the end of 2011.
• These EB benefits are not paid out of the UC Trust Fund, but with federal funds.

Please act now to send a message to your State Representative.  Here’s how:

1.  Click here to send a click-to-send email message.  On the message page just enter your full PA home address (including St., Rd., Ave. etc.) and click “Participate” to send your message today: Stop the UC Cuts in PA!  Vote ‘NO’ on HB 916.

2.  Call your State Representative.  Click this link to find your legislator and their office phone numbers.  Call and tell them:  Stop the UC Cuts in PA!  Vote ‘NO’ on HB 916.

We want every State Representative to receive both a phone call and an email message — and that’s particularly important if you’re in Montgomery, Chester, Bucks or Delaware Counties!