Major Revisions to Pennsylvania's Unemployment Compensation Law
Act 6 of 2011 [formerly SB 1030, PN 1365], signed June 17, 2011, makes significant amendments to Pennsylvania's Unemployment Compensation Law. The original version of SB 1030, introduced by Senator John R. Gordner (R- Columbia, Dauphin (part), Luzerne (part), Montour, Northumberland and Snyder Counties), expanded "relief from charges" or credits to employer accounts.
As enacted, however, Act 6 incorporates a number of employer-friendly provisions that are estimated to save the UC Fund some $133 million annually. Act 6:
- Requires an "active job search" for claimants to collect benefits;
- Requires a claimant to earn at least than $100 for every "credit week" until December 31, 2014, and at least 16 times the Pennsylvania minimum wage rate (now $7.15 thereafter);
- Increases the number of "credit weeks" necessary to qualify for benefits from 16 to 18;
- Increases the minimum weekly qualifying benefit rate from $35 to $70;
- Freezes the maximum weekly benefit rate for calendar year 2012 at the 2011 level of $573, and increases it hereafter by 1.1% to 1.5% respectively for 2013 through 2018;
- Establishes a new five year Job Sharing Program to stave off potential layoffs;
- Bases the statewide average maximum benefit amount and the statewide average annual wage on a 36 month average, rather than a 12 month average;
- Changes retroactively the "triggers" for extended benefits;
- Offsets severance payments and provides detailed language for the calculation of severance reduction applicable to each week;
- Expands "relief from charges" or credits to employer accounts to disqualifying terminations; unemployment due to natural disasters declared by the President; cessation of business for 18 months or less due to a disaster;
- Details procedures for "relief from charges," including a need to notify the Department of the return to work of an employee within 15 days;
- Allows telephone hearings regardless of distance from the hearing location;
The quick enactment of the bill into law resulted, in part, from an unusual Friday Senate session to comply with federally mandated time table to save benefit extensions.
The new law has a variety of effective dates ranging from retroactive application of the "triggers" for extended benefits to December 2010 and delayed application of some provisions until January 2015. These varied effective dates should be carefully reviewed in individual situations.
Bottom Line:
Act 6 of 2011 addresses vital concerns about the solvency of Pennsylvania's Unemployment Compensation Fund. Some provisions (credit weeks, computation of claimant and maximum benefit amounts) will be applied by the Department of Labor and Industry. Employers should carefully consider changes relating to "relief from charges" and offset of severance benefits.
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