Proyectos de ley › 89.ª Asamblea General
Relating to unemployment benefits and including effective date provisions
Presentado por el comité Labor and Business Relations del Senado
Temas:Jobs & workers
La misma legislación: SSB 3096
Dónde está ahora
- Hecho: Presentado3 de febrero de 2022
- Hecho: Subcomité3 de febrero de 2022
- Hecho: Comité del Senado9 de febrero de 2022
- Se detuvo: Lo aprueba el SenadoMurió al terminar la Asamblea General
- Sigue: Comité de la Cámara
- Sigue: Lo aprueba la Cámara
- Sigue: A gobernador(a)
- Sigue: Firmado como ley
Murió al terminar la sesión La sesión de 2022 terminó el 24 de mayo de 2022, la última sesión ordinaria de la Asamblea General. Los proyectos que no pasaron por ambas cámaras murieron. ¿Qué es el embudo (funnel)?
Qué contiene
Resumen con IA This bill changes how unemployment benefits are calculated and how people qualify for them in Iowa. It sets new rules for how many job searches a person must complete each week and requires a one-week waiting period before payments begin. Additionally, state agencies must include more information about the workforce when they publish reports about unemployment rates. (Todavía no está traducido al español.)1
Lea la explicación oficial (en inglés)
This bill relates to unemployment benefits. The bill defines “nonparticipating workforce rate” as the portion of the population that is not employed or earnestly and actively seeking work. The bill defines “workforce term” as the nonparticipating workforce rate, the state unemployment rate, or the number of known, available jobs in Iowa as published by the department of workforce development (IWD). The bill requires that, when a state agency makes a reference to the state unemployment rate in an official written statement from the agency or a report or other document that is published and available to the public, the agency shall include a reference to the nonparticipating workforce rate. The bill also requires that when the IWD makes a reference to a workforce term in an official written statement or a report or other document that is published and available to the public, the IWD must also reference each other workforce term. The bill defines “statewide average unemployment rate” as the average seasonally adjusted unemployment rate in this state as published by the department in the third week of the month prior to the current calendar month. The bill defines “work search” as applying for a job by submitting a resume or application to a potential employer in person, through the mail, by electronic means, or by fax transmission; interviewing for a job virtually or in person; taking a civil service exam; or taking a military aptitude exam. The bill strikes language providing that an eligible individual’s maximum weekly benefit amount varies with the number of the individual’s dependents. The bill instead provides that an individual with dependents will have a weekly benefit amount of 1/22 the individual’s highest gross quarterly salary during the individual’s base period, subject to a maximum of percent of the statewide average weekly wage. Under current law, the maximum total amount of unemployment benefits payable to an eligible individual in a benefit year cannot exceed times the individual’s weekly benefit amount, among other limitations. The bill provides that the maximum total amount of unemployment benefits payable to an eligible individual in a benefit year cannot exceed times the individual’s weekly benefit amount if the statewide average unemployment rate, as defined in the bill, is at or below percent, calculated on the date the individual applied for benefits. The bill provides for one additional multiple of the individual’s weekly benefit amount for each increment of percent the statewide average unemployment rate is above percent, up to a maximum of times the individual’s weekly benefit amount. If the governor has declared a statewide disaster emergency, the amount shall instead be times the individual’s weekly benefit amount for the duration of the emergency. The bill provides that if, on the date an individual exhausts all unemployment benefits payable to the individual, the statewide average unemployment rate has increased so that the maximum total amount of benefits for benefit applicants on that date is greater than the maximum amount determined for the individual, then the individual shall receive additional multiple weekly benefits to make up the difference. The bill makes related changes to training extension benefits and certain other unemployment benefits available when an individual is laid off due to the individual’s employer going out of business at the factory, establishment, or other premises. The bill requires a person applying for unemployment benefits to complete a certain number of work searches, based on the number of jobs listed as available as published by the IWD on the most recent third calendar week of a month, for each week the person is applying for benefits in order to be eligible for benefits. If the number of available jobs is at or above 60,000, the person must complete a minimum of six work searches each week; if the number of available jobs is at or above 50,000 but below 60,000, the person must complete a minimum of five work searches each week; and if the number of available jobs is below 50,000, the person must complete a minimum of four work searches each week. A work search shall not satisfy an individual’s eligibility requirements if the individual previously applied to the same position within the most recent four weeks. The bill requires that, if an individual has received six or more payments of benefits for a benefit year, at least half of the work searches the individual uses to meet eligibility requirements must be from a list of known available jobs within a 50-mile radius of the individual’s residence in fields related to employment the applicant held within the most recent years, in fields which the applicant has identified an interest, or that require skills that the individual claimed to have when applying for benefits. The bill requires IWD to provide the individual a list of these jobs on a weekly basis. The bill requires an individual to first satisfy a single one-week waiting period during the individual’s benefit year prior to receiving unemployment compensation. To satisfy the one-week waiting period, the individual, with respect to the week in question, must otherwise be eligible for unemployment benefits from this state, must not have received or have payable unemployment benefits from this state, and must not be eligible for unemployment benefits from another state. The bill requires a person applying for unemployment benefits to complete one search activity each week as designated by IWD in order to be eligible for unemployment benefits. The search activities are in addition to other work search requirements to receive unemployment benefits. A search activity shall only meet eligibility requirements if the individual has not previously performed that type of search activity during the individual’s benefit year in order to remain eligible. The bill directs IWD to adopt rules to implement this requirement. The bill requires IWD to provide an individual applying for unemployment benefits with an email address and an identification number upon the department’s initial determination that the individual is eligible for benefits. The email address shall be accessible to both the individual and the department, and shall be the individual’s primary source of receiving emails for work searches the individual uses to satisfy unemployment benefit eligibility requirements. The bill also requires the individual to list the email address and the identification number on each application the individual uses in order to maintain eligibility for unemployment benefits. The bill requires that, if the individual has received payments of benefits for a benefit year and the individual is eligible to receive extended payments due to a statewide disaster declaration issued by the governor, the individual shall perform at least hours of civic work each week as defined by IWD by rule in order to maintain eligibility for unemployment benefits. Civic work shall include but not be limited to roadside trash pickup, public building and park beautification projects, and volunteering at public schools. The bill requires IWD to conduct audits of the information an individual provides at a minimum once each month to ensure the individual is meeting all eligibility requirements for unemployment benefits. Audits conducted shall include but not be limited to sending a form to employers who the individual claims to have interviewed with for employment for the purpose of collecting the employer’s employer identification number; the individual’s identification number provided by the department; the date the employer received the individual’s application; whether the individual appeared for the interview; whether the individual rejected an offer of employment for the position for which the individual was applying; the date the individual rejected an offer of employment, if any, and the title, wage, and estimated weekly salary for the position for which the individual was applying. A failure to accept an offer of or apply for available suitable work may affect an individual’s eligibility for unemployment benefits. IWD uses certain criteria to determine whether work is considered suitable, including whether the offered or available work meets or exceeds an individual’s highest gross weekly salary during the individual’s base period. The bill changes the percentages the salary available or offered work must meet or exceed in order to be considered suitable. Work must meet or exceed 100 percent of the base period salary, if the work is offered during the first four weeks of unemployment; percent if the work is offered during the 5th through the 8th week of unemployment; percent if the work is offered during the 9th through the 12th week of unemployment; and percent if the work is offered after the 12th week of unemployment. Previously, work offered must exceed 100 percent of the base period salary, if the work is offered during the first five weeks of unemployment; percent if the work is offered during the 6th through the 12th week of unemployment; percent if the work is offered during the 13th through the 18th week of unemployment; and percent if the work is offered after the 18th week of unemployment.1A, subsection 18. The bill requires IWD to adopt or amend its administrative rules to set the number of search activities acceptable to meet the work search requirements for unemployment benefit eligibility to different types of activities and allow employers to protest a payment of unemployment benefits and protest and sign a notice of claim electronically using a form created by IWD. The bill takes effect January 1, 2023.
Senate subcommittee
Named February 3, 2022 (as SSB 3096). On February 8, 2022 it recommended passage.
Three legislators hear a bill first and recommend what the committee should do; it’s the best time to weigh in. How to take part
Nota fiscal
Can’t be estimated Compare con otros proyectos
Resumen con IA This bill changes how unemployment insurance benefits are calculated and how many weeks they can be paid based on the state unemployment rate. It also introduces new work search requirements and civic work mandates for certain claimants. The fiscal impact of using specific workforce terms may jeopardize federal funding by an amount that cannot be determined. Using 2019 data, the changes to benefit amounts for claimants with dependents would result in a $2.2 million reduction in unemployment insurance benefits over a full fiscal year. (en inglés)3
Lea la nota fiscal (en inglés)
Description
Senate File 2249 relates to unemployment insurance benefits. The Bill:
- Requires State agencies to include a reference to the nonparticipating workforce rate, defined in the Bill, when making a reference to the State unemployment rate in an official written statement or a report or other published document.
- Requires the Iowa Department of Workforce Development (IWD) to refer to other workforce terms, defined in the Bill, when referring to other workforce terms.
- Modifies the weekly benefit amount (WBA) that is subject to the maximum percentage of the statewide average weekly wage for unemployment insurance (UI) claimants, which under current law is based on the number of dependents. Table 1 below shows the change:
- Reduces the maximum total amount of benefits payable from 26 weeks times the WBA to an index based on the State unemployment rate. If the unemployment rate is at or below 4.0%, the maximum benefit payable would be a total of 12 weeks. For every percentage point above 4.0% in the unemployment rate, the maximum benefit payable would increase by 1 week, up to a maximum total of 16 weeks. If the Governor has declared a statewide disaster emergency pursuant to Iowa Code section 29C.6, the maximum benefit payable would be a total of 20 weeks.
- Reduces Training Extension Benefits, as provided in Iowa Code section 96.3(5)(b), based on the maximum total amount of benefits payable.
- Eliminates the ability of individuals whose employers have gone out of business to collect an extra 13 weeks of benefits, and instead provides a maximum total amount of payable benefits of 50.0% more than the current maximum number of weeks authorized in the Bill.
- Requires a person applying for unemployment benefits to complete a certain number of work searches per week, depending on the number of available jobs in the State.
- Reinstates a one-week waiting period for individuals eligible to collect UI during the individual’s benefit year.Number of Dependents
Current Weekly
Benefit Amount
(Fraction of
High Quarter
Wages)
Current
Maximum
Percentage of
Weekly Wage
Number of
Dependents
SF 2249
Weekly
Benefit
Amount
SF 2249
Maximum
Percentage of
Weekly Wage
0 1/23 53.0% 0 1/23 53.0% 1 1/22 55.0% 2 1/21 57.0% 3 1/20 60.0% 4 or More 1/19 65.0% Table 1 — Modifications in Dependent Benefit Structures Compared to Current Law 1 or More 1/22 57.0%
- Provides that claimants who have received benefits for 16 or more weeks must complete at least 20 hours of civic work each week.
- Directs the IWD to perform audits of UI beneficiaries once a month to determine compliance with the work search requirements of the Bill, including sending forms to prospective employers and maintaining an email database that can be used by both the IWD and a beneficiary for an individual’s work searches. The IWD must also furnish a list of known available jobs within a 50-mile radius to beneficiaries in their related job fields.
- Modifies the percentages of the individual’s average weekly wage for insured work paid to the individual that is considered suitable for an individual to apply for and accept work in order to remain eligible for UI. Modifications are shown in Table 2 below:
- Requires the IWD to administer rules to implement provisions of the Bill.
- Allows employers to protest a payment of unemployment benefits and sign a notice of claim electronically.
- The Bill is effective January 1, 2023.
Background
The UI Trust Fund, administered by the U.S. Department of Labor, is used to pay UI benefits to eligible claimants. The balance of the Fund at the end of calendar year (CY) 2016 was $1.006 billion, rising to $1.252 billion at the end of CY 2019. The Fund balance as of December 31, 2021, was $1.391 billion. Table 3 below shows historical claims paid from the Fund to Iowans:
The UI Trust Fund is replenished through insurance taxes paid by Iowa employers based on a formula that includes an employer’s five-year average annual benefit payment and the employer’s five-year average annual taxable payroll. This formula results in a benefit ratio, which is compared to every other employer’s benefit ratio in determining the employer tax rate. The lowest employer benefit ratios receive the lowest tax rates. The Contribution Rate Table (Table 4 below) shows the tax rates paid by Iowa employers and is set on a scale of 1 (highest tax rate paid) to 8 (lowest tax rate paid). The Contribution Rate Table is calculated using overall recent benefits paid, statewide median income, and the balance of the UI Trust Fund. For 2022, the Contribution Rate Table is set at 7, with tax rates ranging from 0.00% for those with the lowest benefit ratios to 7.50% for those with the highest benefit ratios. In 2020, $490.0 million was transferred from federal funds deposited into the Iowa Coronavirus Relief Fund to the UICurrent Weeks Current Percentage of Weekly Wages SF 2249 Weeks SF 2249 Percentage of
Weekly Wages
9-12 70.0% 13-18 70.0% 19+ 65.0% 6-12 75.0% 13+ 65.0% Table 2 — Percentage of Weekly Wages to Apply/Accept Suitable Work Under SF 2249 0-5 100.0% 0-4 100.0% 5-8 75.0%Year 2016 2017 2018 2019 2020 2021 Benefits 423,511,000$ 402,625,000$ 364,713,000$ 381,789,000$ 1,254,245,000$ 414,289,000$ *Source: U.S. Department of Labor Table 3 — UI Benefits Paid (CY 2016-2021)* Trust Fund, while in 2021, $237.5 million was transferred from federal funds deposited into the State and Local Fiscal Recovery Fund to the UI Trust Fund, both to keep the Contribution Rate at 7.
Many states currently impose a one-week waiting period for payment of UI benefits because federal funds are not available for the first week after a claim is filed. Iowa currently does not have a waiting week. The federal Coronavirus Aid, Relief, and Economic Security (CARES) Act provided 100.0% federal reimbursement to states for the first week of UI for the time period of March 29, 2020, through December 16, 2020. The federal Consolidated Appropriations Act, 2021, provided a 50.0% reimbursement for the first week of all claims paid from December 27, 2020, through March 13, 2021. A total of $89.1 million was paid to Iowa through the program. Table 4 — Unemployment Insurance Taxes Contribution Rates Table The WBA for a claimant is determined by the wages earned in the highest quarter of the base period and the number of dependents on a claim. The base period is a four-quarter (one year) time frame using the first four of the last five completed calendar quarters at the time an initial unemployment insurance claim is filed. To calculate the WBA, the wages in the highest quarter of the base period are divided by:
- 23 for zero dependents (maximum of $531 per week in benefits during FY 2022)
- 22 for one dependent (maximum of $551)
- 21 for two dependents (maximum of $571)
- 20 for three dependents (maximum of $601)
- 19 for four dependents (maximum of $651)
The maximum benefit amount (MBA) for a claimant is currently either 26 times the WBA or one-third of the total base period wages, whichever is less. If the last employer permanently closed the business location, the MBA may be increased to 39 times the WBA or one-half the total base period wages, whichever is less. The minimum and maximum WBAs and MBAs change each year for new claims filed after the first Sunday in July.
In October 2021, the IWD initiated a new reemployment case management system to refocus Iowa’s unemployment system on rapid reemployment. Weekly work search requirements were amplified for beneficiaries, who are required to satisfy four reemployment activities per week, including at least three applications in various formats.
According to the U.S. Bureau of Labor Statistics (BLS), as of December 2021, the State unemployment rate was 3.5%, the lowest since March 2021’s rate of 2.9%. Since 2000, Iowa’s unemployment rate has peaked under 4.0% during economic expansion, while increasing above 4.0% after the recessions in 2001, 2007 to 2009, and 2020. See Figure 1 below:
Assumptions
- 2020 and 2021 UI data was not used as a model due to high claims paid from COVID-19 closures.
- An inflation level of 2.5% beginning in FY 2024 was assumed for salary and benefit savings.
- Projections beginning January 1, 2023, use one-half the annual total projections for the fiscal year.
- According to the IWD, use of the term “nonparticipating workforce rate”, as defined in the Bill, may be in breach of guidelines from the BLS, and may jeopardize federal funding by an amount that cannot be determined.
- Projections starting in FY 2023 for claimants with dependents are based on FY 2019 IWD dependent and UI beneficiary data. As many as 8,231 beneficiaries had more than two dependents in FY 2019. Using 2019 data, there would have been a $2.2 million reduction in UI benefits over a full fiscal year due to the Bill.
- The assumed unemployment rate in Iowa through FY 2024 is at 4.0% or below. The estimated maximum number of weeks of UI benefits paid to claimants in FY 2023 and FY 2024 is 12 weeks.
- The number of claimants receiving benefits in 2019 after 12 weeks is 40,510, or 48.0% of all claimants, per IWD data. For purposes of this estimate, the number of claimants receiving benefits between 12 weeks and 26 weeks is 39,641.
- The total amount of benefits affected by the Bill paid to claimants after 12 weeks in 2019 is $131.1 million, per IWD data, including those covered by the business failure section of the Bill.
- The population that is covered by the business failure section of the Bill are removed from the fiscal impact for the reduction of maximum benefits from 26 to 12 weeks.
- Business failure projections going forward are based on FY 2014 to FY 2019 data from the IWD, as an average of $4.6 million in UI benefits were paid out to 2,741 recipients due to closings. The assumed number of extra weeks of benefits in the Bill for those affected by a business closing is 6 weeks, a reduction of the current 13 weeks of extra benefits.
- Training Extended Benefits paid have decreased continually from $2.0 million in 2018 to $48,000 in 2021, per IWD data, and cannot be estimated for future years.
- Reinstating an initial waiting week will reduce withdrawals to cover UI benefits by 5.5% annually. The annual average in first-week benefit payments from FY 2015 to FY 2019 to 62,000 recipients who would no longer receive them under the Bill was $23.3 million, according to the IWD.
- Creation of a monthly audit mandate per claimant and a new email system will necessitate an extra 60.0 full-time equivalent (FTE) Workforce Career Consultant positions and 5.0 FTE Workforce Program Coordinator positions for 10,000 or more audits, according to the IWD. This number of FTE positions is based on the 1,800 audits performed in January 2022 with 18.0 new FTE Career Consultant positions. The audit mandate, along with the electronic appeals process, would also necessitate 5.0 FTE Administrative Law Judge (ALJ) positions and 1.0 FTE Judicial Assistant positions, according to the IWD. These annual expenses will be paid for through the General Fund and other State funding sources.
Fiscal Impact
- The Bill will reduce benefits paid from the UI Trust Fund, due to modifying the WBA for those with more than one dependent, by an estimated $1.1 million in FY 2023 and $2.2 million in FY 2024.
- Reducing the maximum allowable benefit from 26 to 12 weeks for most claimants when the unemployment rate is at 4.0% or below will decrease benefits paid from the UI Trust Fund by $64.9 million in FY 2023 and $131.8 million in FY 2024. The Bill may also create a change order for the IWD’s new unemployment benefits system, which is currently being developed by a contractor paid through federal funding.
- The provision to reduce benefits to claimants whose employers go out of business will decrease benefits paid from the UI Trust Fund by approximately $1.2 million in FY 2023 and $2.5 million in FY 2024.
- The reduction in Training Extended Benefits cannot be estimated due to lack of data.
- Reinstating the one-week waiting period for payment of UI benefits will decrease benefits paid from the UI Trust Fund by an estimated $11.7 million in FY 2023 and $23.9 million in FY 2024.
- The modification of suitable work percentages is expected to reduce benefit payments from the UI Trust Fund by an amount that cannot be estimated due to lack of data.
- Employer taxes paid into the UI Trust Fund would be expected to decrease in future years, absent any other law changes, due to a reduction in benefit payments and a short-term increase in the UI Trust Fund balance. Tax implications cannot be estimated due to lack of data.
- The conduction of monthly audits by the IWD, the creation of a new email system, and the ability of employers to protest benefits online will increase expenditures by the IWD totaling $2.4 million in FY 2023 and $5.0 million in FY 2024, including 71.0 FTE positions. See Table 5 below for total fiscal impacts of the Bill.
The fiscal impacts due to the Bill will continue indefinitely.
Sources
- Legislative Services Agency
- Iowa Department of Workforce Development
- United States Department of Labor
- United States Bureau of Labor Statistics
- Iowa Department of Management
- Indexing Unemployment Insurance · 28 de febrero de 2022
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