“I’m glad to hear the chairmen are interested in making changes to the current system, which continues to impose an undue financial burden on the state’s employers and to hamper business expansion and job growth,” said Senate Minority Leader Bruce Tarr (R-Gloucester). “If the committee is serious about tackling this issue, we already have comprehensive reform legislation on the table to revise the existing rate structure, crack down on abuse and ensure the system’s long-term viability.”
In January, Senator Tarr filed Senate Bill 895, An Act Improving Unemployment Insurance, which was the subject of a public hearing yesterday before the committee. The bill has bi-partisan support and co-sponsors from both the House and Senate.
Senator Tarr noted that Massachusetts
currently provides the most generous unemployment insurance benefits in the
nation. Recipients are not only eligible
for the highest weekly payment of any state ($625 in 2012), but they also can
receive benefits for up to 30 weeks, compared to 26 weeks in all other states
except Montana. Individuals in
Massachusetts also become eligible to collect unemployment after just 15 weeks
of employment, compared to the 20-week standard used in most states.
The
unemployment system is also vulnerable to abuse. A 2004 analysis by Commonwealth Magazine
showed that 700 people had collected unemployment benefits in each of the 20
previous years. Commonwealth Magazine
noted that many seasonal employers game the system by continuously laying off
and rehiring their workers, in some cases several times a year, resulting in
instances where the benefits paid to these “laid-off” workers far exceed the
money paid into the system by the employer.
According to Senator Tarr, Senate Bill 895 will bring Massachusetts’ unemployment insurance benefits in line with most other states, while making sensible reforms to the rate structures for the businesses that fund the program. Specifically, the bill would:
· increase the amount of time someone must work before becoming eligible to collect unemployment from 15 to 20 weeks;
· reduce the amount of time a beneficiary can receive payment to 26 weeks, with the caveat that if they participate in a job training or internship program, they can continue to collect for the full 30 weeks;
· require employers that use the unemployment system more frequently to pay more money into it; and
· require the Division of Unemployment Assistance to give extra scrutiny to those who show a clear pattern of filing benefit claims without any challenge from their employer.
In additional to these reforms, Senate Bill 895 would:
· require the Division of Unemployment Assistance to hold at least one public hearing attended by the employers who finance the system;
· create a study to examine current inefficiencies in the unemployment insurance hearing process; and
· form a commission to scrutinize the weekly benefit payment structure utilized by the Division of Unemployment Assistance, and examine whether a change in the payment structure could increase the incentive to rejoin the workforce and lower the cost to operate the system.
“Reforming the unemployment insurance system is essential to ensuring its long-term sustainability,” said Senator Tarr. “Senate Bill 895 offers substantive changes that will help to make the state more competitive while also promoting job growth.”
