The Senate Economic Development, Housing, and General Affairs Committee has been working this week on S.10, which would extend and modify COVID-19 related changes to unemployment insurance impacting employers and beneficiaries that were enacted last year. Generally, Act 91 expanded UI eligibility for individuals who leave their job for certain reasons related to COVID-19, and also provided for conditional relief in UI experience charging for employers whose employees leave for those expanded eligibility reasons or who have to shut down operations or lay off employees for certain reasons directly related to COVID-19. These provisions are set to expire at the end of March. Click here for the language of the act.
Although S.10 was originally introduced as a straightforward extension of these provisions in Act 91, two key issues of importance to employers have arisen, one of which is getting attention in the bill so far.
Act 91 requires, in cases when the employer lays off workers for qualifying COVID-19 related reasons, that the employer offer the employees their job back again in order for charges against their UI experience rating to be waived. The offer to rehire is not required for experience relief when the employee leaves on their own for qualifying COVID-19 related reasons. This and the other qualifying conditions for experience relief have posed an extremely daunting administrative challenge for the Department of Labor. To address the challenges of administering experience forgiveness, the Department has proposed allowing broad presumptions for experience relief for 2020, and to then created a new application process to determine relief for 2021. Although S.10 continues to evolve, the current draft is moving in this direction.
A key issue that remains to be resolved is the requirement to offer laid off employees their job back. In testimony earlier this week, AIV recommended that reemployment, although an important issue on its own, should not be linked to experience forgiveness – experience charges should be forgiven based on the extraordinary circumstances behind a layoff in the first place. This would both adhere to the principles underlying experience forgiveness and also avoid cumbersome administrative demands. Alternatively, if a link is maintained in the law, AIV recommended that accommodations be made for the practical challenges to rehiring. Act 91 addresses one issue already by only requiring the offer of rehiring – if an employee declines to come back to a job the employer is not penalized. However, Act 91 does not clearly address circumstances when an employer is not in a position to offer reemployment, such as when there simply aren’t the positions available because the business has not fully recovered. It appears that this issue will be addressed to some degree as S.10 continues to evolve, but AIV will remain engaged to help ensure that it is.
A second issue is not likely to be addressed directly in S.10 but is important for employers. In response to the increase in unemployment related to COVID-19 in 2020 the Department has generally been waiving the requirement for UI beneficiaries to search for work. This has been contributing, along with other factors, in fewer UI recipients applying for available jobs, including returning to their old jobs. This in turn is aggravating the challenges for employers seeking to fill positions.
At this time, it appears that work search requirements and other incentives and requirements for UI recipients to return to work when reasonably able to do so are policies that can be addressed by the Department without the need for explicit inclusion in S.10. AIV will be continuing to work with the Department on this issue, and if it does become apparent that any legislative provisions are needed or warranted in S.10 or a future bill, AIV will be engaging with the Legislature and Administration to support such legislation.
Senate committee work on S.10 will be continuing at least into early next week. Employers with any questions about S.10, Act 91, or any UI issues related to COVID-19 are strongly encouraged to contact us at info@aivt.org for more information and to discuss any interest in options to participate in this discussion.