House Should Act to Strengthen Unemployment System

Issues & Policies

A bill that makes long overdue reforms to the state’s unemployment compensation system is gaining support and co-sponsors—but needs to be acted upon by the Connecticut State House.
HB 5367 has been described by one long-time observer as the “best bill this year,” and more lawmakers are seeing it that way, too.


Connecticut’s qualifying threshold for unemployment benefits hasn’t changed since 1967.

That’s because the bill helps workers and their families, employers, and the state’s economy by making four benefit reforms to the unemployment system:

  • Raising the minimum earnings to qualify for unemployment benefits to $2,000. Claimants in Connecticut need only earn $600 in a year to qualify for benefits—third-lowest threshold in the U.S. The earnings requirement in Connecticut has not been raised since the statute went into effect in 1967. A typical worker can meet this requirement in less than two pay periods–meaning it hurts only those attempting to scam the system.
  • Requiring claimants to post their resumes online to receive benefits after six consecutive weeks of unemployment. Rhode Island recently instituted this reform, which studies show gets the unemployed back to work faster. Connecticut’s labor department already has an online resume listing portal in operation that can be used for this purpose and claimants are already supposed to be looking for work.
  • Basing benefits on an employee’s annual salary rather than two highest quarters, to avoid inequitably rewarding seasonal workers. Sixteen states base employees’ benefits on a full year’s salary. Under current law, a seasonal worker in Connecticut earning $30,000 over the course of two calendar quarters would get the same unemployment benefits as a full-time worker earning $60,000 over four quarters. This reform will provide relief to businesses, especially farms, that hire a lot of seasonal workers. The only “harm” here is to seasonal workers that have been unfairly compensated during unemployment for years.
  • Freezing the maximum weekly benefit rate for three years. The maximum benefit rate is allowed to increase by $18 every year. Freezing this for three years could save as much as $10 million per year, and it doesn’t take a dollar away from anyone.

Other Benefits

These changes will add up over time and help ensure the solvency of the state’s Unemployment Compensation Trust Fund for future generations.
Connecticut’s reluctance to make unemployment benefit reforms neighboring state have made resulted in our state having to borrow money to shore up the trust fund for a significantly longer period of time.
What’s more, neighboring states take in either similar, or in most cases, less unemployment tax revenue than Connecticut.

A bill that helps everyone, hurts no one, and costs the state nothing is almost unheard of in a legislative session.

Our trust fund's insolvency didn't occur overnight, but these reforms over time will prevent the type of massive borrowing needed to cover the last recession's shortfalls.
HB 5367 also could result in businesses seeing lower unemployment taxes.
These cost-saving reforms will help our fund reach its solvency goals, which means the state may be able to cut unemployment taxes in the future.
Supporting reforms that help cut costs for every business in one's district has to be a nice addition to any lawmakers’ election campaign.
And since the unemployment trust fund is funded by employers, the reforms have zero budget impact on the state.
Plus there's no picking winners or losers because every business wins.
A bill that helps everyone, hurts no one, and is free of charge to the state is almost unheard of in a legislative session.
It’s time for Connecticut state lawmakers to pass HB 5367.

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


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