Connecticut will raise its maximum weekly unemployment benefit by $18—the highest amount allowed under law—from $613 to $631, effective Oct. 7.

The decision by the state Department of Labor is designed to bring the benefit in line with wage increases, said CBIA vice president for government affairs Eric Gjede.

The scheduled increase will not impact people who filed a claim prior to Oct. 1 and are currently collecting unemployment benefits.

The change also means the state's Unemployment Trust Fund may be depleted faster than it would under current limits.

And that, Gjede said, is a concern.

"The business community is concerned about the health of the unemployment trust fund, which is an important safety net,"  he said.

Solvent Trust Fund

CBIA has for years supported legislation designed to restore solvency to the fund.

During the 2008-2010 recession, Connecticut employers saw their annual federal unemployment taxes jump to a massive $189 average per employee.

That was directly attributable to the poor health of Connecticut's fund, requiring the state to borrow heavily from the federal government in order to maintain the fund's solvency.

Businesses are concerned about the health of the unemployment trust fund, which is an important safety net.
While the state borrowed the money, businesses had to pay it back through higher unemployment taxes and special assessments.

The reason for the fund's poor health is simple: the program has failed to make the reforms necessary to adjust to the current economy.

Earnings Threshold Unchanged

For example, the earnings threshold to qualify for unemployment benefits has remained unchanged since 1968, and is the second-lowest in the country despite the fact Connecticut has the fifth highest average wages in the U.S.

CBIA and other business organizations allies have repeatedly supported legislation to restore the fund's solvency. However, that legislation failed in the 2017 and 2018 sessions.

While unemployed workers would reap the most benefit from these reforms, organized labor and even the fund's labor department stewards oppose any reform measures that do not include unemployment tax increases on businesses.  

Expect to see CBIA support another effort in the 2019 General Assembly to reform Connecticut's unemployment compensation system.

For more information, contact CBIA's Eric Gjede (860.480.1784) | @egjede