Unemployment insurance system needs reform, says task force

Recommendations for possible action during the 2022 session.

FRANKFORT, Ky. (KT) – The General Assembly’s Unemployment Insurance Reform Task Force held what is expected to be its final meeting on Tuesday and approved a document outlining its recommendations for possible action during the 2022 session.

The panel was formed due to legislation passed in the wake of a number of issues involving unemployment that were exasperated by the COVID-19 pandemic in 2020, including workers not receiving their payments due to an antiquated system that also allowed fraudulent claims.

The task force did not draft any legislation but issued their recommendations in the form of bullet points which can be the basis for any lawmakers who wish to propose a bill. Recommendations include:

--Indexing of number of weeks benefits are payable to the state unemployment insurance rate

--Increasing the number of job contacts a claimant must make in a week

--Capping the amount of benefits that can be received if a worker’s regular weekly benefit rate is temporarily increased or supplemented by federal, state, or local funds during a state of emergency

--Change the charging method for employers to a “proportion to base-period wages” method

--Reforming the unemployment insurance tax system

--Implementing a comprehensive job referral program into the unemployment insurance system

--Decrease from three years to one year the period of time for an employer to qualify for an experience rating

--Develop ways to improve workforce participation

--Switch the emphasis of the system from unemployment to reemployment.

--Strengthen internal policies of the Labor Cabinet to insure its employees cannot access their own unemployment insurance claim information

--Improve transparency and access to information at the Labor Cabinet

--Combat unemployment insurance fraud by locking known fraudsters out of the system

--Implementation of the recommendations made by the Auditor in his report

--Increased funding of the unemployment insurance system to implement reforms

--Continued monitoring of the production of a new unemployment insurance system technology upgrade

--Consider the reforms recommended in House Bill 317 from the 2019 General Assembly Regular Session

Sen. Ralph Alvarado, R-Winchester, asked to include the recommendation that any employees of the Legislative Research Commission who wish to be cross-trained to assist unemployment officials during an emergency such as the COVID-19 pandemic do so, as allowed under federal laws and regulations. The provision was adopted.

The report was approved 6-2, with both dissenting votes by Democratic members from Louisville.

Rep. McKenzie Cantrell objected because the recommendations were too vague. “We’re a small group and I think there’s a lot of bipartisan ways that we can reach some consensus to develop specific recommendations to our colleagues.”

Sen. David Yates expressed similar concerns, adding he’d like to see the minimum wage raised and not have decreased OSHA protection. “We don’t want things that endanger our workforce because we want Kentucky to be a place where we protect our workers, where they’re safe.”

The report now goes to House and Senate leadership.