After needing almost $1 billion in federal funds over the last four years to keep the state’s unemployment compensation system afloat—an amount, plus interest, that Connecticut employers are still paying back—state policymakers are considering a variety of ways to control costs and make the system work better. 

In a public hearing on Tuesday, the legislature’s Labor Committee examined several proposed fixes to Connecticut’s unemployment compensation system as proposed by the state Labor Department. These include system tweaks that would:

  • Reduce administrative costs at the state Labor Department by requiring employers to electronically file their quarterly unemployment tax returns (HB 6452).  
  • Increase penalties on individuals who make false claims for unemployment benefits, unless the payment of the false claims was the result of an employer’s failure to provide claim information to the Labor Department (SB 909).  

GOP reforms

The committee also heard two reform measures proposed by Republican lawmakers. However, It is still undetermined whether the proposals will come to a vote in the committee. They should, because  the measures would vastly improve the unemployment compensation system, reduce costs for businesses, and help prevent future Trust Fund solvency issues by:

Raising from $500 to $2,000 the wage an employee would need to earn before being able to collect unemployment benefits from his or her employer (HB 5686).

Connecticut’s$500 threshold has not been changed since 1990; by comparison, the state’s minimum wage has risen four times in the last seven years. And, at least 29 other states have a threshold of $2,000 or more; several states’ thresholds are at or exceed $4,000.   

Gradually reducing the benefits received by an unemployed individual each month in order to encourage a speedy return to the workforce (HB 5701).

CBIA encourages the committee to give these measures serious consideration because of the obvious good they would achieve.

Other tweaks

Before the session began, CBIA suggested other small tweaks to reduce employers’ costs and make sure the Unemployment Compensation Trust Fund is preserved for those who truly need it.

These ideas included removing the eligibility for benefits of individuals that were no call/no shows to work three days in a single year--rather than the current standard of three instances (of up to two consecutive days). 

Another CBIA proposal was to modify the definition of suitability of employment in order to encourage individuals to return to work as soon as possible and reflect how the recession changed the job market. 

The business community continues to struggle under the massive weight of repaying the state’s loan from the federal government to cover the unemployment compensation benefits paid during the recent prolonged period of high unemployment. 

Now is the time to make commonsense reforms to the unemployment compensation system to help control costs and ensure its future viability. 

For more information, contact CBIA’s Eric Gjede at 860.244.1931 or eric.gjede@cbia.com.