|
|
|
 |
|
Home / Washington Business - January/February 2004 / Unemployment Insurance Rates Rise Despite Reforms Many benefits of 2003's UI reforms will not be fully felt for four years |
|
|
|
 |
|
|
|
Unemployment Insurance Rates Rise Despite Reforms Many benefits of 2003's UI reforms will not be fully felt for four years |
|
|
|
Written On: January/February 2004 |
|
|
|
Written By: By Paul Schlienz |
|
|
|
When Boeing Commercial Airplane Company President Alan Mulally told legislators that Washington’s unemployment costs were the highest of anyplace it operates in the world, it was headline news in Seattle. While they cripple Boeing’s ability to complete, unemployment taxes are a silent killer for all employers across our state.
Gov. Locke and legislators took that message to the House Labor and Commerce Committee in January 2002 to heart and in 2003; they reformed the state’s unemployment insurance laws.
Despite this landmark achievement, your unemployment rates are increasing starting in January. So what’s going on?
“The reason we have this increase in 2004 is because we couldn’t institute a brand new system until we got the bad years of 2001, 2002 and 2003 out of our system,” Tom Dooley, AWB’s unemployment insurance specialist said. “Those years had some of the highest unemployment rates we’ve had in this state.
State Has to Replenish Unemployment Reserves
“Because we’ve had significantly high usage of the unemployment trust fund, that fund is heavily depleted. As a result, you need to have one year of an increase before the reform kicks in and you start to see a decrease.”
Dooley, however, urges employers to be patient while a better UI system emerges over the next few years.
“Individual employers’ UI rates will drop significantly as benefit reductions contained in last year’s legislation come on line,” Dooley said. “Very soon, employers will see a much less costly and a much more equitable unemployment insurance system than we’ve had for the past 20 years.”
The key will be to sustain the system changes. Union leaders vow to reverse the 2003 legislative changes and go back to the old system.
Legislature Changed Benefits Calculations
“We’ve made significant changes in terms of how we account for benefits,” Dooley said. “The maximum weekly amount has been frozen at $496 until we reach a level where that would represent 66 and two thirds percent of the state’s weekly average wage.
“We’ve significantly reduced the amount that can be received by an individual. We’ve also shortened the number of weeks a person can be on unemployment insurance from 30 to 26 weeks.”
Among the other highlights of the new unemployment insurance system crafted by the Legislature in June 2003:
• The Employment Security Dept. (ESD) is no longer allowed to “liberally construe” the awarding of UI benefits. It has tighter guidelines.
• While the pre-2003 UI law determined the weekly benefit amount by multiplying the average of the claimant’s two high quarters by .04 percent. The new law changes calculation of weekly benefits to the average of the three highest quarters beginning in 2004. In 2005, the four highest quarters will be calculated. The multiplier will remain at .04 percent.
• Work search requirements have been tightened. Formerly, claimants would lose benefits for weeks they did not search for work. Now claimants will lose all weeks’ benefits if they are found not to be following ESD’s job search guidelines.
• UI fund dollars may only be accessed for UI purposes.
• An employer’s penalty for knowingly providing intentional UI misinformation is 10 times the amount of difference. Formerly $10, the employer penalty for untimely filing and underreporting is now not to exceed $250 or 10 percent of the quarterly contribution, whichever is less.
• Spousal relocation benefits have been eliminated for all but military spouses.
• The Employment Security Dept. commissioner no longer has the authority to provide new benefits by rule when deemed pertinent.
• A new part-time UI benefit has been established for claimants with a history of part-time work, defined as less than 17 hours work per week in at least 40 of the previous 52 weeks.
People Fired for Harming Employer are Now Ineligible for UI
In addition, it will be harder for an individual to receive benefits if that person was fired for misconduct. Prior to the 2003 reforms, UI benefits could only be denied to a fired employee if the employer could prove the claimant had harmed the employer’s business. The 2003 act establishes new guidelines for the ESD to deny benefits under misconduct situations.
Although the complete benefits of 2003’s UI reforms will not be fully felt until four years from now, Dooley remains enthusiastic about the changes in ESD policy.
“It’s almost like this is a take your medicine time,” Dooley concluded, reflecting on 2004’s UI increase. “We need to take that medicine and we’ll get better. The future is going to be better. Once we get there, people will be extremely happy with our new unemployment insurance system.”
To learn more about the 2003 unemployment insurance changes, go to www.awb.org and go to the “Dooley UI PowerPoint.”
|
|
|
|
|
 |
|
