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.

PA Chamber, Local Chamber Helped Nearly 3,000 Businesses Avoid Crushing UC Tax Hike in Late Days of 2021-22 Session

The power of partnerships was on display in the final days of the 2021-22 session as the PA Chamber worked with elected officials, one of our local chamber partners and a small business owner to secure a tangible victory for thousands of Pennsylvania businesses.

Pandemic-related business closures were unfortunately going to significantly, and unfairly, increase unemployment compensation tax rates for one Schuylkill County small business owner, as he reported at a public hearing hosted by state Rep. Tim Twardzik (R-Schuylkill) in Pottsville in late August 2022.

When the PA Chamber’s Government Affairs team was alerted to this fact by Schuylkill County President Bob Carl and discovered that the increase was going to affect nearly 3,000 businesses statewide, we leapt into action, working with Rep. Twardzik and state Sen. Dave Argall (R-Carbon/Luzerne/Schuylkill), other lawmakers and the Wolf administration to craft, pass and enact a legislative fix that would exempt businesses who were forced to shut down during the pandemic from having to pay the much higher UC tax rate. Part of this advocacy included working with a coalition of more than 60 local chambers urging the General Assembly to support the bill, and many of those chambers followed up with direct outreach to their local legislators.

Only nine legislative days passed from the time we learned of this issue to the time we successfully implemented a legislative fix. Act 156 of 2022 was a crowning achievement in a year of monumental victories for Pennsylvania’s business community!

PA Chamber President and CEO Luke Bernstein has been sharing this story as he’s visited more than 35 local chambers of commerce across Pennsylvania. It’s a perfect example of how engagement from the local level to the state chamber helps us to advance public policy benefitting all businesses. Had the small business owner never expressed his concerns to his local chamber president, and had the local chamber president not passed those concerns to the PA Chamber, 3,000 businesses would now be paying an astronomically high UC tax rate. But that employer’s voice carries enormous value, not only to his local chamber but to the PA Chamber and every elected official who voted “yes” to get the UC tax rate exemption to the finish line. Your voice matters, no matter the size of your business or where you’re located – and it always will.

Department of Labor and Industry Issues UC Fraud Guidance

July 26, 2021

Responding to skyrocketing claims of Unemployment Insurance Fraud, the PA Department of Labor and Industry this week provided employers with helpful tips for reporting fraudulent claims.  When responding to a Notice of Claim Filed that you believe to be fraudulent, keep the following tips in mind: L&I does not need any of the person’s actual […]

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PA Chamber: As Workforce Shortage Continues, States Across the Nation Pull Back Federal Unemployment Benefit Enhancements

June 17, 2021 | Tricia Harris

HARRISBURG – 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: “The current workforce shortage isn’t […]

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PA Chamber: Workforce Shortage Slowing Economic Recovery

May 27, 2021 | Tricia Harris

HARRISBURG – 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: “As Pennsylvania begins to re-open, employers are reporting serious workforce shortages which are hindering the state’s economic recovery.  Over the past several months, we […]

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Unemployment compensation helps alleviate the potential economic hardships of the involuntarily unemployed while these individuals work towards transitioning back into employment. 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 paid roughly the 6th highest average UC tax rate from 2016 to 2020 according to 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 2021 State Business Tax Climate Index, Pennsylvania’s UC taxes ranked in the top 10 worst states for employers, taking into account maximum and minimum rates, additional costs and complexity; a poor performance, though improved after ranking worst in the country in four of the previous seven years.

Excessive UC costs and an unsustainable system can undermine job creation and destabilize an important safety net program. The PA Chamber opposes any broad-based UC tax increases and supports changes in the law that promote fairness, help control costs and promote solvency of the UC trust fund.

Specifically, the PA Chamber supports:

  • A system limited to temporary unemployment benefits only for those who were clearly attached to the workforce, lost their job through no fault of their own and are actively seeking new employment;
  • A tax rating system that fairly determines employer tax rates by considering an employer’s past experience;
  • Strict enforcement of the work-search requirement and efforts to provide resources and guidance to claimants;
  • Benefits that are based on prior wages earned in covered employment;
  • UC Trust Fund finance policies that are reactive to fund balance levels in order to be solvent and avoid the need to borrow from the federal government;
  • Policies that mitigate employer cost increases in the event federal borrowing for UC is necessary, including reasonable and predictable payment schedules;
  • Legislative and administrative efforts to combat fraud and abuse of the UC system and hold perpetrators accountable; and
  • Efforts to improve system functionality and avoid any excessive or unnecessary administrative burdens on employers, claimants and program personnel.

UC played a critical role in the legislative response to the COVID-19 pandemic as policymakers sought to drive support to individuals through an existing system with established infrastructure. While adjustments were necessary to allow for flexibility, the PA Chamber urges lawmakers to exercise caution should similar circumstances arise again and ensure that any adjustments to UC are temporary and key principles of the program still adhered to. Additionally, given unprecedented business shutdown orders and record number of claims, the PA Chamber supports utilizing federal stimulus funding to pay down UC debt incurred as a result of the pandemic. Other states opted for this approach, which was specifically authorized by the federal government, in order to avoid or reduce significant employer tax increases.

Revised by the Policy Subcommittee. Approved by the Board of Directors on October 5, 2021