September 12, 2018

CBIA: Unemployment benefit hike a concern

PHOTO | Contributed
PHOTO | Contributed
Eric Gjede, CBIA's vice president of government affairs.

Connecticut may diminish its Unemployment Trust Fund faster than expected when the state labor department raises its weekly unemployment benefit by $18 next month, the state's largest business lobby said.

On Oct. 7, the state Department of Labor (DOL) is scheduled to raise its weekly unemployment benefit from $613 to $631, the largest amount allowed under state law. The increase, which is calculated and mandated by state statute, will not impact those filing claims before Oct. 1.

The benefit increase is meant to align with wage increases, although it means the state's unemployment fund "may be depleted faster than it would under current limits," said CBIA lobbyist Eric Gjede.

Connecticut's unemployment fund balance is over $619 million, which is 38.1 percent less than its $1 billion solvency goal, DOL said. The state issues about 35,000 unemployment payments each week, amounting to $12 million.

The state's failure to pass reforms that would restore the fund's solvency during the last two legislative sessions has caused its poor health, CBIA said.

"The business community is concerned about the health of the unemployment trust fund, which is an important safety net," said Gjede, who began leading CBIA's government affairs unit in July.

CBIA, an advocate of legislation that would restore the state's unemployment fund, says Connecticut employers suffer when the state's unemployment fund is depleted.

Employers, during the Great Recession, saw their annual federal unemployment taxes rise to an average of $189 per employee due to the fund's "poor health," CBIA says. That forced the state to borrow federal money to maintain the fund's solvency, it said.

Meantime, the earnings threshold to qualify for unemployment benefits has not changed since 1986, even though Connecticut workers on average earn top wages vs. the rest of the country.

CBIA said it will continue to support reforms that would restore the unemployment fund during the 2019 legislative session.

Comments
Free E-Newsletters

Sign up now for our daily and weekly
e-newsletters! Click Here

 
Today's Poll Is the state investing enough money in the University of Connecticut?<>
ADVERTISEMENTS
Most Popular on Facebook
Copyright 2017 New England Business Media