What’s New in Unemployment Compensation?

Much has changed in Unemployment Compensation legislation since our last edition of the Unemployment Compensation Handbook was released in 2007. In just this past year alone, both state and federal lawmakers have impacted Indiana’s Unemployment Compensation system with the American Recovery and Reinvestment Act of 2009, as well as Indiana House Bill 1379, which addressed the depleted UI Trust Fund and launched both increased tax rates and stricter eligibility rules for unemployed workers applying for UI benefits; and in 2010, Senate Bill 23, which delayed the tax increases on Indiana employers for one year.

Our new book, authored once again by the law firm Ziemer, Stayman, Weitzel & Shoulders, can be your go-to reference on this complicated subject.

We do, however, have different options for you to receive the book this year. In addition to our standard hard copy for $95 , we’ll offer this book as one of our new ePubs. By ordering the ePub, not only will you get access to the book the minute it’s officially released (which should be by the end of next week), but you can buy a year of access for just $69. That means if a new edition of the guide is released during that year, you’ll automatically have access to the new guide online. And better yet, this book is part of our NEW Human Resources ePubs package, which includes a total of 15 of our popular HR-related titles for just $499 for the year (over $450 less than if you bought these books individually).

Unemployment Comp: How Much is Too Much?

Jobs are — or should be — the number one priority as economic recovery (in that sense) remains elusive. For those currently without jobs, however, how much unemployment compensation is too much? It’s a tricky question, but one that is starting to be asked by more than a few people.

The unemployment comp program, created during the Depression as a temporary aid for laid-off workers, is now termed by some as an "expensive entitlement." While those out of work once received six months of payments, that has now surged to as high as 99 weeks in some states. Half of the more than 11 million unemployed have been jobless for longer than six months.

This is a downturn unlike any other since the program was created and many of those jobs will likely not come back. And while the vast majority are very likely doing all they can to find meaningful employment in the effort to return to their previous lifestyle, nearly two years of unemployment benefits has also undoubtedly led some to adopt the option of "let the government pay the tab" for awhile.

Few seemingly agreed with Kentucky Senator Jim Bunning’s recent filibuster that delayed the latest unemployment benefits extension (he wanted Washington to find a way to pay for it), but his logic was accepted in some circles. Colleague Jon Kyle of Arizona commented that the continued benefits are a "disincentive for people to seek new work" and that no one can argue that the current system is a "job enhancer."

Employers pay the bill through taxes in nearly all states (a few require worker contributions). Benefits have been extended before, but rolled back when the unemployment rate declined. That decline is proving difficult to achieve this time around.

A Washington Post article this week included the following:

"It is appropriate and natural for Congress to extend the time limit of unemployment insurance with the job market as bad as it is," said James Sherk, a labor economist at the Heritage Foundation. "But by quadrupling it, it is no longer an unemployment insurance program but a welfare program."

Phillip L. Swagel, a former Treasury Department official who is now a business professor at Georgetown University, said that some people might take longer to find a new job as a result of unemployment insurance extensions, but that right now it’s a needed benefit.

"The reality is that it’s hard to find a job even for people who really want one," he said.

But as the job market improves, Swagel said, unemployment insurance extensions must be pared back quickly, as they have been in previous downturns. "It’s important to let the extensions lapse as the job market recovers — to avoid having disincentives to work once the job market is better," Swagel said.

Part of the question is timing. For a program that is currently costing $10 billion a month, that’s something that needs answered sooner rather than later.