HB 2400: A Chance to Help Pennsylvania’s Unemployed

It seems impossible that amid all the bickering in the state legislature over budget shortages, there is $273 million sitting on the table, requiring only that the state unemployment insurance system be reformed [PDF]. These federal dollars could be available to the 9.1% of Pennsylvania residents who are unemployed, if only the reforms that 39 other states have already implemented were enacted in the Pennsylvania.

The American Recovery and Reinvestment Act (ARRA) of 2009 allocated funds with the stipulation that states wishing to receive their share make specific reforms to their unemployment insurance systems. In fact, 39 states have already enacted qualifying reforms, and 32 states have received full funding.  HB 2400, currently being debated in the state House of Representatives, would make Pennsylvania eligible for full federal funding. Not only would more funds be available to the state, but many more Pennsylvanians would qualify for unemployment compensation; as it stands now, fewer than six in ten jobless Pennsylvania residents receive compensatory benefits.

One-third of the money allocated to the state is dependent on simply enacting an “alternative base period.” In the current system, only the first four of the last five calendar quarters are considered the base year from which unemployment compensation is decided. For example, if a resident applies for unemployment compensation today, July 22, 2010, the state will base that person’s unemployment only on the period that he or she worked from April 2009-March 2010, the first four of the last five calendar quarters that the employee worked. So, if a worker wants his or her most recent work experience to be taken into account, she or he needs to wait months before qualifying for benefits. The current base year system especially disadvantages low-wage workers, the majority of whom are female. Domestic violence victims and part-time workers, who are particularly shortchanged by this system because they tend to have irregular work history, are also disproportionally women.  Black women, Hispanic women, and women who head families are more likely to be unemployed and could benefit greatly from this bill.

The other two thirds of the $273 million in federal funds will be available to Pennsylvania once the legislature enacts reforms that will both benefit workers who are only available for part-time work as well as those who must leave a job for compelling family reasons.  Under our current state law, a part-time worker is disqualified from benefits if she or he has refused an offer of full-time employment. HB 2400 would eliminate this disqualification, though it would require that the claimant accept a job of at least 20 hours a week or the average number of hours per week worked in his or her base year. The law would also ensure that domestic violence and sexual assault victims do not need to prove any facts in addition to what she or he already needs to prove under Pennsylvania law to receive unemployment benefits after relocation. In cases where a person quits his or her job due to illness or disability in his or her family, HB 2400 would make sure she or he can collect benefits without having to abide by additional restrictions that are currently in Pennsylvania decisional law.

Some argue that the $70 million a year expansion of unemployment insurance is too much for a state whose UC Trust Fund is already “in the red.” But the reality is that federal funds would pay for the reforms for about four years. It doesn’t make sense not to take advantage of this stimulus money while it is available. In fact, the Pennsylvania state legislature should view this as an opportunity to “test run” these reforms – without putting out any existing budgeted money! If the legislature feels that adjustments need to be made after the four-year grace period in which the program would be paid for, then it should be reevaluated. At present, however, we are selling the state and its residents short by not enacting these reforms.

Passage of HB 2400 would allow Pennsylvania access to $273 million in federal funds that would benefit unemployed workers.  Please contact your legislators and let them know that you want Pennsylvania to get its share of the federal stimulus funds. You can find out who your representatives are and their contact information here.

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