New unemployment compensation law now in effect

New unemployment compensation law now in effect

By CAROLINE BECK, Alabama Daily News

MONTGOMERY, Ala. – Recently unemployed Alabamians will see a slight increase in their weekly unemployment compensation checks, but the number of weeks they are able to receive them has decreased since a new law went into effect January 1.

Senate Bill 193, approved in the 2019 legislative session, now ties the number of weeks people receive jobless benefits to the state’s unemployment rate, going from 26 weeks to a variable 14 to 20 weeks. When unemployment is at or below 6.5%, people will receive 14 weeks of benefits. If unemployment is above 6.5 percent, an additional week will be added for each .5 percent increase in the rate with a maximum of 20 weeks of benefits.

Alabama’s latest unemployment rate is 2.7%, a record low for the state.

Those who enroll in a state-approved training program can also receive five extra weeks of compensation.

Rep. Danny Garrett, R-Trussville, who sponsored the legislation in the House, told Alabama Daily News the system needed to be updated to meet existing workforce realities.

“In the current environment where employers are desperate for employees, it doesn’t really make sense to have a six-month period where someone can draw on unemployment,” Garrett told ADN. “The best thing for someone in that situation is to get back into the job market. It’s better for the individual and it’s better for the state economy.”

Sen. Arthur Orr, R-Decatur, who sponsored the legislation in the Senate, said that the extra five weeks of compensation was to help long-term job prospects for the individual.

“We wanted that in there so they could improve their skill set and make them more marketable to hopefully help them to increase their earning capacity through that increased skill sets,” Orr said.

Some of the Alabama Department of Labor-approved training programs include any GED training program, any training provided through the Alabama Career Center System, any associates, bachelor’s, master’s, or doctorate degree programs and any vocational trade or certificate program.

The new law raised the weekly compensation from $265 to $275. Those dollars come out of the Alabama Unemployment Insurance Trust Fund, funded by employers’ unemployment taxes.

The fiscal note for the new law says it will save the fund $45 million per year, which Orr said will most likely help small business owners.

“Employers should receive a reduction in employment taxes so they should be paying a lot less there effective this month,” Orr said.

Rosemary Elebash, the Alabama state director for the National Federation of Independent Business, was a major supporter of the bill. She told ADN that because of the state’s historic low unemployment rate it is more important now than ever to get skilled workers out into the workforce.

“For more than two years, the No. 1 problem facing small business owners is the lack of qualified workers,” Elebash said. “The important part of the bill to me is those extra five weeks of training because you still get to draw your unemployment because we found there are so many certificates that people could earn in that period of time and it would create a true economic path for them upward.”

The bill did run into opposition when originally being debated with Democrats saying taking away the allotted time for compensation would not help those who lost their job from no fault of their own.

Orr said they originally wanted the law to take into account unemployment rates by county, allowing for more weeks of compensation where the rate was higher,  but was not allowed by the U.S. Department of Labor because of equal protection clauses.

Most counties in Alabama have an unemployment rate of 4.3% or lower. The highest unemployment rate is in Wilcox County at 6.3% and multiple other Black Belt counties like Lowndes, Dallas, Monroe, Clarke and Greene have rates higher than 4.4%.

Garrett said that Alabama is now in line with what many neighboring states do for their unemployment compensation.

“What we see with other states with similar programs is they’ve moved away from this old model where if you’re unemployed you simply have six months to find a job,” Garrett said. “Now it’s connected with the unemployment rate so we can see what’s fair and get you back in the work force.”

According to the Center on Budget and Policy Priorities, neighboring states like Georgia provide 14 to 20 weeks of unemployment compensation, depending on the unemployment rate.

Floridians can claim benefits for 12 to 23 weeks depending on the unemployment rate but states like Tennessee and Mississippi offer up to 26 weeks in benefits depending on the unemployment rate.