From PA Chamber of Business & Industry

PA Chamber Government Affairs Director Alex Halper advocated in favor of legislation that would clarify and strengthen language within the state’s Unemployment Compensation law last week at a public hearing of the House Labor and Industry Committee. House Bill 1014 defines “willful misconduct” (i.e. the circumstances under which a firing triggers ineligibility for UC benefits) and clarifies that an individual whose separation from employment was due to “voluntary leaving work without cause of necessitous and compelling nature” is only eligible for benefits if he or she quits for reasons attributable to the job or workplace.

Halper explained to the committee that part of the reason these changes are necessary is to preserve the UC system for who it is truly designed to help – individuals who lose their job through no fault on their own for a temporary basis as they search for new employment. The bill will also help address problems with the administration of the UC system and service centers – of which the funding and function has recently been the subject of much scrutiny – along with challenges that have strained the UC Trust Fund for years.

“The problem is that the term ‘willful misconduct’ is not defined within the statute, which gives overly broad discretion to those tasked with resolving eligibility disputes and too often leads to benefits being granted to individuals fired for reasons that would lead an objective observer to almost certainly conclude should be disqualifying,” Halper said. “Unfortunately, we hear frequently of employers in this precise situation: a former employee whom they were forced to fire for good cause still manages to qualify for benefits … everything from chronic absenteeism and altercations with fellow employees to the individual arriving at work clearly under the influence of illegal drugs.” To make matters worse, those employers’ taxes increase as a result because tax rates are partially based on experience.

While not a panacea for addressing Pennsylvania’s myriad UC system problems, the PA Chamber supports H.B. 1014 because it will help to provide specific statutory guidance and clarification to help dictate decisions, remove unpredictability in the system and allow for a quicker, more uniform approach to dispute resolution.

The bill still awaits action by the House Labor and Industry Committee.

House and Senate lawmakers return to Harrisburg for session this week. With less than two months until the end of the Fiscal Year, they will have to take into account the state’s $1.2 billion revenue shortfall and incorporate that reality into their plans for spending in 2017-18. The law requires that the budget must be balanced; therefore, further cuts to spending, new taxes or other proposals to generate revenue will be necessary to close the gap. The House awaits Senate action on H.B. 218, the budget vehicle they passed a little more than a month ago that relies on gaming expansion and liquor reforms to generate new revenue, which the Senate Appropriations Committee could take up as early as this week.

On Friday, Senator John Gordner expressed concern about gaming expansion generating significant new revenue. He feels gaming in Pennsylvania may be at a saturation point, and that further expansion may result in reduced lottery proceeds for senior citizen programs. His comments were made at the budget breakfast sponsored by the Joint Governmental Affairs Committee of the Chamber and Columbia-Montour Visitors Bureau held at The Greenly Center in downtown Bloomsburg. Representative David Millard and Harold Hurst from Rep. Kurt Masser’s office also participated.

Jennifer Reis, Manager of Government Affairs with the PA Chamber of Business & Industry, provided an overview of $32.2 billion budget proposed by Governor Wolf, as well as the $31.5 billion spending plan advanced by the House. While the Governor’s budget did not address the state’s public pension crisis, Senator Gordner believes that legislation to provide a long-term solution will be advanced and signed by the Governor. As the state Supreme Court would likely declare any changes in benefits to existing employees unconstitutional, a solution for immediate relief is unlikely.

Senator Gordner and Representative Millard felt confident that a budget bill will be provided to the Governor by the June 30 deadline.

Each year, timely and accurate new hire reporting by employers results in increased child support collections (between $30 million to $50 million) for Pennsylvania’s children. Employer outreach and education — focusing on the importance of timely and accurate reporting of new hire data (because it directly impacts dependent children who are owed child support) — is critical to the continued success of this program. Pennsylvania’s New Hire Reporting Program within the Department of Labor & Industry offers resources to understand the system.

Employers also directly benefit from new hire reporting, because the new hire data they submit to us are matched to Unemployment Compensation and Workers’ Compensation claimant data, and often result in reduced UC and Workers’ Compensation fraud overpayments. This saves employers millions of dollars each fiscal year in possible fraud overpayments — over $38 million in total since 1998.

But these results only come about if employers are aware of the Program, and the federal and state laws that mandate new hires be reported to the Commonwealth—employer reporting is not optional, but is required by law.

Additional information about new hire reporting is available through the CareerLink website, or by calling 1-888-PAHIRES (888-724-4737).

For businesses that have participated in the Educational Improvement Tax Credit (EITC) program, May 15 is a critical date. The popular state program provides funding for Pre-K scholarships, scholarships for private schools, and educational enhancement programs like those supported by the Chamber’s Foundation. Despite increased allocations to the program in recent years, eligible businesses are strongly encouraged to submit applications on the early enrollment date.

Important points to note are:

1.  Companies that have fulfilled a two-year commitment in their most recently completed fiscal year continue to receive preferential treatment by being allowed to file for a new “initial” application between May 15th and June 30th for the start of another two-year commitment. Moreover, those companies will be able to increase the amount they are applying for as the limit of combined credits for any fiscal year is up to $750,000. Companies that wish to make contributions to Pre-K Scholarship Organizations may receive a tax credit equal to 100% of the first $10,000 contributed and up to 90% of the remaining amount contributed up to a maximum credit of $200,000 annually.

2. Businesses applying for Pre-K credits may now choose to make a two-year commitment. Companies supporting Pre-K organizations now also receive the “preference” for filing on May 15th, having successfully fulfilled a two-year commitment in their most recently completed fiscal year.

3. All EITC applications must be filed electronically. (This will include companies filing for their second-year credits beginning on May 15th.) Paper applications are no longer accepted. Once a company has established a “profile” online, almost everything will be completed electronically. DCED no longer requires applicants to mail the signed signature page.

The current guidelines are now available on the DCED website. The applications are now available online but cannot be filed until May 15. Businesses that are not currently active in the program must wait until July 3 to apply. Due to the recent allocation increase, and current legislation that would further increase the allocation, interested businesses may want to consider submitting a new application on that date.

The Chamber has been advocating since 2014 that the application process be open to all Pennsylvania-based businesses at the same time. A letter renewing that call was recently sent to Senator Gordner and the members of the Senate Education Committee, where the legislation is being considered.