|Posted:||April 4, 2013 08:59 AM|
|From:||Senator Michael J. Stack|
|To:||All Senate members|
|Subject:||Changes to the Unemployment Compensation formula|
|I will be introducing legislation in the near future that will change the way Unemployment Compensation (Act 60) amounts are calculated. In essence, this change will revert back to the previous law before the changes were made in 2012.
Like many members can attest, our office has heard from countless trade organizations, labor interests and blue collar workers who share personal stories about how the changes to Act 60 has significantly reduced their compensation. This has been another blow to working families who have either been furloughed or laid off due to no fault of their own. The changes to Act 60 hurt our families and this legislation would go back to a more fair and equitable formula for the working men and women of the Commonwealth.
Below is a more technical breakdown of the legislation:
Current Law: Under current law, there are several factors considered in determining if a claimant is financially eligible for benefits under the law. Generally explained, an individual must work and earn a minimum amount wages in employment covered by the act within their “base year.” A base year is the time period consisting of the first four of the five quarters immediately preceding the application for benefits.
Section 401 of the act sets forth one factor that is used to evaluate whether the base year wages will qualify the applicant for benefits – it sets forth a minimum requirement that an applicant’s wages must be distributed over the quarters of the base period.
Currently, the minimum requirement is that a claimant must earn at least 20% of their total base year wages in any of the three quarters outside of their highest earning quarter. (However, please note that this 20% requirement is primarily applicable to high wage earners – those who may become eligible for the maximum weekly benefit rate. Compliance with other sections of the law requires most claimants to earn an average of 37% of their total base year wages outside of their high quarter to receive benefits.)
This requirement seeks to ensure that an individual has an attachment to the work force by demonstrating that they earn wages throughout the year and not just in one quarter.
This legislation would amend section 401(a) to increase the minimum amount of wages that a claimant must earn in
any three quarters of their base year, other than their highest earning quarter, in order to become eligible for benefits to
49.5% of their total base year wages. This change would take effect January of the following year.
If you have any additional questions, please contact my Harrisburg office.
Introduced as SB912