State’s Unemployment Comp System Tapped

Connecticut has lost about 95,000 jobs since the start of the recession, putting a huge strain on the state’s unemployment compensation system and placing us among at least 24 other states whose unemployment trust funds have run out in recent months.

As a result of the huge surge in unemployment benefit claims, Connecticut has been forced to borrow more than $800 million from the federal government just to meet our current benefit obligations.

Making matters worse, employers are frustrated with the system's liberal eligibility requirements. Results of the 2009 survey of CBIA member companies showed that every respondent indicated dissatisfaction with Connecticut’s UC benefits system.

CBIA believes that solving the unemployment fund problem should start by ensuring that Connecticut’s unemployment compensation system is used as intended—that eligibility requirements are being adhered to, that people who have lost their jobs are given the necessary assistance and incentives to find suitable employment quickly, and that individuals who collect benefits fraudulently are required to repay the funds as quickly as possible.

“It is unfair that [claimants] should be able to collect if fired due to poor performance,” said one respondent. Another argued that the UC system is “always for the former employee, even when termination is for justifiable reasons with evidence.”

Policymakers should take a careful look at the system’s standards, especially by Reviewing eligibility standards so that they are clear and balanced for employees and employers alike, reflect the intent of the system and the realities of the economy, and encourage individuals to return to work as soon as possible.

Eliminating unique features of the system which result in benefits being given liberally, including benefits available only to those in Connecticut and a small minority of other states.

Only after close scrutiny of the system should higher taxes be considered—especially when it’s so critically important to hold on to jobs today. Higher unemployment compensation taxes will make it that much more difficult to encourage economic development and job creation, ultimately slowing Connecticut’s economic recovery.

For more information, contact CBIA’s Kia Murrell at 860.244.1931 or kia.murrell@cbia.com