All HR Professionals:
As you all should know by now, the Arkansas Unemployment Trust Fund is seriously in debt to the Federal Government. For the last two years, the Management Team on the ADWS Advisory Council (chaired by Russell Gunter, ARSHRM Governmental Affairs Director) has been working on a solution that was balanced between benefit cuts and taxable wage base increases. The Labor Team on the ADWS Advisory Council rejected management’s efforts.
The Management Team believes that Arkansas’ benefit payments are out of line with our surrounding states. For example, despite having the second lowest income level, Arkansas has the highest maximum benefit amount, the highest minimum benefit amount and the highest percentage of income replacement among our surrounding states.
However, the Federal Government has since implemented a “non-reduction” rule when it last offered the states an extension of federal unemployment benefits. This meant that weekly benefit amount to be received by a claimant could not be reduced from the level being paid in June 2010.
The Management Team could not support an increase in the taxable wage base without realizing some savings on the benefit side, so they no longer support their previous proposal. In the meantime, during the current budget discussions, the administration has proposed an increase in the federal taxable wage base to $15,000. This would require the states to raise their taxable wage base to that same level, as a minimum. Thus, it appears that the state taxable wage base in Arkansas may well be raised to $15,000 (from $12,000) without the state legislature doing anything.
As a result, the Management Team of the ADWS Advisory Council has proposed and supported HB 1728 and SB 593 which addresses several eligibility issues which are not prohibited by the non-reduction rule. A summary of these eligibility changes are listed below. However, in the same budgeting proposal at the federal level, there is a proposal that would prohibit a reduction in eligibility as well. If that passes, then we will not be able to address either reduction of benefit levels or eligibility issues, but the taxable wage base will still increase. We have a very small window of opportunity to make these eligibility changes.
Please contact both your State Senator and Member of the State House of Representatives NOW to express your support for HB 1728 and SB 593. A summary of those bills follows:
SUMMARY OF CHANGES
1. Statutorily set Minimum Benefit Amount at current level of $81, removing indexing formula.
2. Statutorily set Maximum Benefit at current level of $451, removing indexing formula.
3. Reduce the duration of benefits from 26 weeks to 25 weeks.
4. Qualifying and Requalifying Wages
Currently a claimant in Arkansas must have worked in at least two base period quarters and have earned at least 27 times the claimant’s weekly benefit amount to be eligible for unemployment compensation. Similarly, to requalify for benefits, the claimant must have worked in at least two base period quarters and have earned at least 27 times the claimant’s weekly benefit amount and have earned at least 3 times the weekly benefit amount since filing the prior claim. The ADWS staff has suggested increasing the “27 times” formula to “35 times”, and increasing the “3 times” formula to “8 times.”
5. Disqualification for misconduct.
Currently, disqualification period for misconduct is until claimant has completed 30 days of covered employment. This disqualification is scheduled to sunset on 7-1-11, reducing the disqualification to either 8 or 10 weeks (depending on severity of the misconduct) of unemployment.
- Repeal sunset provision, leaving general misconduct qualification until claimant has completed 30 days of covered employment (same disqualification for a voluntary quit); and
- Establish a new disqualification for serious misconduct (dishonesty, working under influence of alcohol or illegal drugs, willful violation of safety rules) until claimant has worked in at least two base period quarters and earned no less than 35 times the amount of his average weekly benefit. (This is the same standard a new employee in the workforce must meet before being eligible for benefit payments.)
6. Failing Drug Test
- Currently, a claimant that was discharged for failing a drug test is disqualified until completion of 30 days of covered employment, which will be reduced to 8 weeks of unemployment when the sunset provision becomes effective on 7-1-11.
- Currently a claimant who is receiving benefits who is denied employment for failing a drug test is disqualified for a period of 8 weeks of unemployment.
- The amendment will increase the disqualification in both circumstances until claimant has worked in at least two additional quarters and earned no less than 35 times the amount of his benefit. (This is the same standard a new employee in the workforce must meet before being eligible for benefit payments.)
7. Absenteeism as disqualifying misconduct.
- Currently, ADWS looks are merits of absences in previous 12 months, even if employer has a no-fault attendance policy.
- This amendment would provide for disqualification for absenteeism if an employer followed a written attendance policy, with progressive discipline, regardless whether the policy is a fault or no-fault policy.
8. Poor Performance
Under current law, an employee discharged for poor performance is entitled to benefits unless the employer can prove the employee’s poor performance was intentional.
The amendment does the following:
- Violations of behavioral policies (as opposed to violations of performance standards) are misconduct for which an employee is disqualified.
- Progressive discipline for acts of commission, omission or negligence in the performance of the employee’s job duties is sufficient proof that the poor performance was intentional.
- A poor performing employee who refuses an alternative job offered by his or her employer and is subsequently discharged will be disqualified from receiving benefits until completion of 30 days of covered employment.
9. Refusal to Apply for Work or Accept Suitable Job Offer
Current disqualification of 8 weeks of unemployment is increased to 30 days of covered employment.
If you have any questions, please contact any of the following:
Donna Merriweather, SPHR
ARSHRM State Legislative Affairs Co-Director
Senior Vice President-HR Director
P. O. Box 417 • 901 Main Street
Arkadelphia, AR 71923
Darrin E. Coon, SPHR
ARSHRM State Legislative Affairs Co-Director
Business and HR Manager
John Brown University
2000 W. University Street
Siloam Springs, AR 72761
Russell Gunter, SPHR
ARSHRM Government Affairs Director
Cross, Gunter, Witherspoon & Galchus, P.C.
500 Clinton Ave., Suite 200
Little Rock, AR 72201
fax: (501) 371-0035