Testimony on PA HB 1754: unemployment compensation eligibility

August 9, 2011

CLS Attorney Sharon Dietrich was invited to provide testimony to a joint House-Senate Labor and Industry Committees hearing on House Bill 1754, which proposes changes to Pennsylvania’s unemployment compensation law. Her conclusion:

“Since the UC Law was enacted 75 years ago, the statutory definitions of ‘willful misconduct’ and ‘voluntary quits’ have served the Commonwealth well.  Nothing about our workforce has changed such that we should cut back the scope of these definitions.  To the contrary, societal forces such as the depth of our current recession and ongoing high unemployment rate, the expanded role of women in the workplace, and the growth of our elderly population requiring care make provision of UC benefits under these definitions more vital than ever.

The only significant change that can be argued to militate in favor of a statutory change is our huge UC trust fund debt.  To be sure, changes must be made to address that problem.  However, a solvency plan that pays down the debt still should be fair and consistent with the goals of the UC Law.  We should not destroy one of our most needed safety net programs in order to save it.”

Read the full text of Sharon Dietrich’s testimony: Testimony on PA HB 1754 by CLS Sharon Dietrich


Press Release: Unemployment Benefits Bill Cuts Future Benefits Without Fixing System

June 16, 2011

Unemployment Benefits Bill Will Help Long-Term Unemployed Now, But It Cuts Future Benefits Without Fixing the Financing of the UC System

June 16, 2011 – Harrisburg lawmakers have agreed to a compromise bill that will allow an estimated 135,000 long-term unemployed Pennsylvanians to continue receiving unemployment benefits that are funded by the federal government. But this agreement makes permanent cuts in the state’s unemployment compensation (UC) program, without addressing the program’s flawed financing system that has caused the insolvency of the UC Fund.

Senate Bill 1030 will be amended to make a technical amendment to the state UC law that will avoid the cut-off of 13 weeks of federally funded Extended Benefits to 45,000 Pennsylvanians next week. The bill will also permit 90,000 other Pennsylvanians to qualify for EB through the end of 2011.

However, the compromise will also permanently cut UC eligibility in the future. Some of the provisions of the bill, while technical, will fall particularly hard on thousands of the most economically vulnerable workers in Pennsylvania. The bill will:

• Increase the amount of earnings needed for a “credit week” that qualifies workers for benefits from $50 now, to $100 in 2013, and to 16 times the minimum wage in 2015;

• Disqualify workers who have fewer than 18 credits weeks, beginning in 2015 (currently, workers with 16 or 17 credit weeks can get limited benefits);

• Limit the maximum number of weeks during which a worker can receive benefits to the number of his credit weeks, beginning in 2015 and affecting an estimated 75,000 workers per year (currently a worker with at least 18 credit weeks can receive benefits up to 26 weeks); and

• Increase the minimum benefit of $35 per week to $70 per week, beginning in 2013 (meaning that persons whose earnings calculations would result in a benefit below $70 will receive no benefit at all).

These changes will particularly harm low wage workers, because of their often unstable employment as well as their low wages.

Moreover, while this compromise is anticipated to cut more than $100 million per year of benefits, it does not solve the funding crisis of Pennsylvania’s UC system. Currently, Pennsylvania is more than $3.6 billion in debt to the federal government.

Pennsylvania’s unemployment compensation system is financed primarily through employer taxes on a “taxable wage base” of only the first $8,000 of each employee’s wages. This taxable wage base was last raised in 1984. According to the Pa. Department of Labor and Industry, if the taxable wage base had been increased since 1984 for cost of living, it would currently be at $21,500.

Sharon Dietrich, who heads the Community Legal Services employment law practice in Philadelphia, said, “Pennsylvania’s UC trust fund is insolvent because the system’s financing is broken. Too little revenue is coming into the system to fund the benefits needed by Pennsylvania’s unemployed. We are paying unemployment benefits based on 2011 wages, as we should, but we are taxing employers as though it is 1984.”

Dietrich continued, “Recently, the state legislature has looked at addressing the insolvency of the trust fund only by making huge benefit cuts on Pennsylvania’s unemployed. The unemployed did not get us into this mess and should not be the ones to get us out of it. It is time to increase the taxable wage base, both to pay down our federal debt and to make the system solvent for the future.”

Community Legal Services has represented the interests of low wage workers affected by Senate Bill 1030.

Press release issued by: Community Legal Services, Inc., 1424 Chestnut St., Philadelphia, PA 19102.

Media contact: Sharon Dietrich, CLS 215-981-3719 or sdietrich @ clsphila .org

Key Suggestions to Corbett’s Transition Team on Unemployment Compensation

February 1, 2011

Sharon Dietrich, the Managing Attorney for Public Benefits and Employment at Community Legal Services, recently delivered a memo to governor-elect Corbett’s transition team on the state’s Unemployment Compensation (UC) program.   The memo takes a hard look at one of the most crucial safety net programs during a recession and makes suggestions on how to improve that program and ensure that it is stable and continues to provide a safety net for years to come.

The full text of the transition memo can be found here.  The transition memo references a number of supporting documents.  They can be found here.

The memo makes four primary recommendations to the Corbett transition team:

  1. The UC Trust Fund insolvency must be remedied by raising the taxable wage base, not by cutting UC benefits.
  2. $273 million in federal UC stimulus money must be accepted by August 2011 so that Pennsylvania does not lose the opportunity to provide hundreds of millions in federally paid benefits to unemployed Pennsylvanians and to reduce employer interest payments on the federal UC loan.
  3. Staffing levels in the UC system must be retained to help the state return to compliance with federal requirements for timely decisions.
  4. Overpayments can be reduced and the system can be made more equitable by requiring employer appeals to occur within 15 days of initial decisions to pay UC claims.

The effect of these recommendations would be a very important set of steps to shoring up a system that supports so many and is crucial to maintaining the Pennsylvania economy, yet  is reeling in red-ink.

73 Weeks of UI Benefits Will Be Eliminated and 280,000 Pennsylvanians Will Exhaust Their Benefits, Unless Congress Acts

November 5, 2010

Unless Congress extends Emergency Unemployment Compensation (EUC) and federal coverage of Extended Benefits (EB), over 280,000 Pennsylvanians will exhaust their Unemployment Insurance (UI) by the end of April, 2011.  80,000 people in PA will lose their benefits in December alone, smack in the middle of the holiday season.

Why?  When the recession started, Congress extended the maximum claim for UI benefits for Pennsylvanians from the usual 26 weeks to 99 weeks.  The bill that extends the benefits to 99 weeks will expire at the end of November, at which point the maximum length of a UI claim in Pennsylvania would return to only 26 weeks.  With no more than 26 weeks of UI, people will start exhausting their benefits in unconscionably high numbers at a time when unemployment stands at 9% in Pennsylvania and 40% of those unemployed have been out of work for more than 26 weeks.  26 week is just not enough of a safety net to help people in this dismal economy.


Cumulative UI exhaustees in Pennsylvania (thousands) 4-2010 through 4-2011 Read the rest of this entry »

HB 2400=$273 Million for Pennslyvania, 30,000 Additional Covered by Unemployment Each Year

October 3, 2010

Currently, the Pennsylvania General Assembly is considering House Bill 2400, which would allow the state to draw down the unemployment compensation (UC) money made available under the federal Unemployment Insurance Modernization Act.  In order to receive $273 million, Pennsylvania is required to make the common sense changes to our UC Law that are contained in that bill—changes already made in whole or in part by 39 states. 

The most important change is the adoption of an “alternative base period,” which allows workers to count more recent earnings to qualify for UC benefits [note: see here for an explanation of the ABP – Alternative Base Period fact sheet].  This provision alone would help 30,000 more people receive UC each year, including an additional 3180 in Philadelphia, according to the Pennsylvania Department of Labor and Industry.

Read the rest of this entry »

In sour economy, TANF cash assistance provides little help for Pennsylvania families

April 21, 2010

Earlier this week, a candidate for state-wide office complained to the (Pottsville, PA) Republican-Herald that “our welfare rolls have ballooned and ballooned.”

Nothing could be further from the truth.

There is a common misconception that more and more people are receiving TANF cash assistance these days.  But the truth is far different.

In reality, fewer families are receiving TANF cash assistance in Pennsylvania than ever before.  And as the economy has soured and long-term unemployment has increased, the cash assistance rolls have only barely inched up.  (More people are, however, receiving food stamps or Medicaid.)

As the table below shows, the number of families receiving TANF cash assistance has dropped 16.5% statewide and 15.2% in Philadelphia over the past five years.  (Raw data available here.)



March 2010



March 2005



Why is this?

As the Department of Public Welfare increasingly emphasized welfare-to-work placements, many families were able to obtain employment.  However, CLS believes that many families that are eligible for TANF  are thwarted by the burdensome application process or burned out by the one-size-fits-all work-first policies that discourage recipients from seeking education and training to improve their employability.  Add to this that the TANF assistance grant has not been increased in over 20 years so a family of three, for example, can still receive only $403 per month in most counties.

A recent New York Times article examining the failure of TANF rolls to increase substantially in this economy cited a Congressional report finding “no clear association between the change in the number of families receiving cash assistance in a state and its unemployment rate.”

And that, CLS believes, is one of the most troubling aspects of TANF cash assistance.  A program that should serve as a safety-net program of last resort is failing its biggest test since welfare reform was enacted in 1996.