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House Bill 4: Changes to unemployment insurance go into effect in 2023

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Posted at 6:07 PM, Jul 28, 2022
and last updated 2022-07-28 18:09:11-04

(LEX 18) — There's a new Kentucky house bill that changes unemployment insurance. Some think it can get people back to work faster, while others worry, that the U.S. may slip into a recession and think it will hurt employees' paychecks.

House Bill 4 was first introduced in February 2022 and passed in April. The new legislation that will go into effect in January 2023 has made changes to the commonwealth's unemployment insurance. Kentucky Chamber of Commerce's Kate Shanks explains how it came about.

"The bill made changes to the weeks of unemployment available when you become unemployed through no fault of your own. And it ties those weeks to the state unemployment rate,” said Shanks.

The bill changes the amount of weeks unemployment insurance is available with times ranging from 12 weeks to 29 weeks, based on the unemployment rate. Now, 26 weeks are available. This was a key piece of legislation for the chamber. One of the biggest goals was to get people back to work and strengthen the local economy.

"We really wanted to look at how we could use, make changes in the system to encourage people to return to work as quickly as possible,” said Shanks.

Kentucky Center for Economic Policy's Policy Director Dustin Pugel says legislation in place now helps combat the harms of a recession allowing workers that get laid off to continue to get by. He believes the new legislation will change that.

"There's a lot of research that shows that when you give people more time, they get jobs that fit them better, which is good for them and good for their employers and have higher wages. But when you're explicitly saying you have to take a lower paying job after six weeks or else we cut off your employment unemployment benefits, what you're saying is we want people to be working a lower wage job,” said Pugel.

Pugel explains that this bill could impact rural Kentuckians, African Americans, people who are disabled, and who have a criminal history - all of whom can have difficulty finding work.

"Pegging this bill to the statewide unemployment rate, you're leaving those groups of folks behind,” said Pugel.

Pugel does say the bill offers more chances for employees to avoid lay-offs if employers apply for the work-sharing programs.

"So essentially a program within unemployment insurance that allows employers to reduce working hours and have unemployment benefits make up some of the lost income."

Leaders with the Kentucky chamber say they are continuously reviewing new policies to help people with employment.

Kate Shanks said, "Those barriers you face today with work, we are working hard to remove those barriers for you through policy and through the program, we do programming we do through our foundation."