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Rocky Mount, Virginia 24151
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Short-term unemployment bill awaits governor’s signature
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Sen. Bill Stanley

Monday, March 17, 2014

By K.A. WAGONER - Staff Writer

After passing the Senate and House of Delegates, a bill that addresses short-term unemployment compensation has been forwarded to the governor for consideration.

The bill, SB110, introduced by Sen. Bill Stanley (R-Glade Hill) would establish a short-term compensation program that provides employers with the option of reducing the hours worked by employees, while permitting them to receive partial compensation for lost wages.

"Our goal was to lessen the impact of a lay-off event by providing an option for participating companies to permit affected employees to actually remain on the job with reduced work hours and pay that is made up with partial unemployment benefits," Stanley said. "The employee also retains their benefits, such as health insurance and retirement accounts."

"It's definitely a win-win for employees and employers, and this program will significantly help our employment situation in Southside and Southwest Virginia," he added.

In terms of fiscal impact on the state budget, the start-up costs, which would include technology upgrades and training, are estimated at $628,776. The VEC notes that it would apply for a federal grant to cover the cost of start-up.

The VEC also estimates that the new legislation would increase the cost of unemployment tax cost per employee by an average of 19 cents over an eight-year average. The cost of the short-time compensation would be borne by the employers who choose to participate.

Program participation would require approval by the Virginia Employment Commission. Any plan submitted for approval must provide that the reduction of work hours is in lieu of a layoff.

The bill also states that health and retirement benefits cannot be reduced or eliminated under the plan.

If the governor signs the bill, the new measure would become effective Jan. 1, 2015.

"This is an important bill that helps to address both the needs of the employer faced with a temporary downturn of its business, and the needs of the employee who otherwise would experience a full layoff," Stanley said. "It also saves Virginia money in reducing payments of unemployment benefits because the employee remains employed."

Another of Stanley's bills (SB266) would have allowed unemployment recipients to extend their benefits through the completion of a financial literacy course and volunteer service at a nonprofit organization. However, the bill was replaced with a substitute that now states that the VEC must only provide information to claimants and job seekers on courses in financial literacy. The courses would be offered at no cost to claimants and job seekers.

The new version of the bill passed the Senate and House and has also been sent to the governor.

"These (financial) courses will be offered to help people who are struggling to make ends meet, and will include important topics, such as personal budgeting and savings, banking and credit issues," Stanley said. "All training courses are free to unemployment claimants and job seekers and will be available online and through other VEC communications mediums."

As with all legislation that is sent to the governor for his signature, there remains the possibility that the governor will amend the bills or veto them. If amended, the changes must be approved by both the Senate and House. If the governor vetoes a bill, a two-thirds majority in both houses is required to override the veto.

Stanley said he is "very proud" of these two pieces of legislation, designed to address the needs of the economically disadvantaged and those who are in a layoff situation, but he is disappointed that SB195 was killed earlier this session in a Senate committee.

The legislation would have directed the Department of Social Services to provide financial assistance to offset the cost of child care for individuals receiving TANF and to other individuals whose household incomes are less than 185 percent of the federal poverty level. These individuals would need to be employed or participating in job placement, job training or education.

The fiscal impact of the bill, however, was estimated at $68.8 million in 2015 and $137.5 each consecutive year. Stanley requested a budget amendment to cover the cost, but the request was rejected by the Senate Finance Committee, which constructs the Senate version of the biennial budget.

"This bill would have helped working individuals who on a daily basis have difficulties making ends meet," Stanley said. "This bill would have helped individuals who are employed or in job training to keep working and rise out of poverty by helping them with their child care costs."

Veto session begins April 23.

 
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