The Commonwealth is best served by a public system of unemployment compensation that helps alleviate the potential economic hardships of the involuntarily unemployed while these individuals work towards transitioning back into the workforce. The PA Chamber advocates to ensure that the UC system can remain intact for those who lose their job through no fault of their own. This includes opposing UC tax increases, and supporting changes in the law that help to promote fairness, control costs and ensure the UC Trust Fund is solvent.
Unemployment compensation has been a key component of the government response to the pandemic. While it made sense to utilize an existing system to drive financial support to impacted individuals, it has become clear that the current law lacks clarity and guidance necessary to fairly and efficiently address pandemic-related claims. This has led to some unintended consequences, including workforce challenges for employers, many of whom report employees quitting or refusing offers to return to work.
Many areas of the law have been temporarily updated to account for the current unique circumstances – so should unemployment compensation.
The Chamber is advocating for legislation to add transparency, predictability and fairness to the process of determining eligibility for unemployment benefits based on pandemic-related reasons. For example, we believe a claimant with an underlying medical condition who quits a job based on their doctor’s advice should be eligible and not have to worry about benefits being denied. At the same time, an employee considering quitting because benefits may be more lucrative than wages should know in advance that they will not be eligible.
The Department of Labor & Industry has been strained by millions of unemployment claims since March and many claimants waited months to get an initial response. While this crisis has generally been beyond anyone’s control, its severity can be contained somewhat going forward with more transparent guidelines, which means fewer contested claims, and a more efficient process for resolving disputes, which helps avoid logjams.
PA Chamber of Business and Industry President and CEO Gene Barr issued the following statement regarding the impact the federal unemployment compensation benefit is having on a national workforce shortage as Louisiana Gov. John Bel Edwards becomes the first Democratic state executive to withdraw from the federal program:
PA Chamber of Business and Industry President and CEO Gene Barr issued the following statement regarding the current state of Pennsylvania’s workforce as employers experience challenges filling open positions:
The Commonwealth is best served by a public system of unemployment compensation that helps alleviate the potential economic hardships of the involuntarily unemployed while these individuals work towards transitioning back into the workforce. The system should provide economic security while incentivizing claimants to re-enter the workforce as quickly as possible.
Pennsylvania’s unemployment compensation system is almost entirely funded by employers, who pay among the highest UC taxes in the country. Pennsylvania employers pay the 4th highest average tax rate on total wages, according to first quarter 2018 data from the U.S. Department of Labor, whose rankings account for differences in the amount of wages subject to tax, known as a state’s taxable wage base. And according to the Tax Foundation’s 2018 State Business Tax Climate Index, Pennsylvania’s UC taxes ranked as the most damaging to employers, taking into account maximum and minimum rates, additional costs and complexity.
Excessive UC costs and an unsustainable system can be a deterrent to job creation and brings instability to a program that serves as an important safety net. The Pennsylvania Chamber of Business and Industry opposes any broad-based UC tax increase proposal and supports changes in the law that promote fairness, help control costs and ensure solvency of the UC trust fund.
Specifically, the PA Chamber supports: