Pennsylvania’s Unemployment Compensation system offers an important layer of protection for workers who lose their jobs through no fault of their own. However, extensions of unemployment benefits that were designed to help displaced workers during the recession required the Department of Labor to borrow more than $3.9 billion from the federal government to provide extended benefits. The terms of this loan currently forces Pennsylvania businesses to pay an additional surcharge to the federal government and miss out on valuable federal tax credits. I recently supported passage of a new law that will help businesses and employees across the commonwealth by satisfying this debt and ensuring the long-term solvency of state’s Unemployment Compensation Trust Fund.

The new law includes a number of reforms to protect the solvency of Pennsylvania’s Unemployment Compensation Trust Fund and avoid the need for additional borrowing in the future. The legislation will require a larger monetary reserve in the state Trust Fund to prevent businesses from paying higher surcharges during an economic downturn. The new law would adjust the amount of money claimants can make at a part-time job without a reduction of benefits and includes new anti-fraud measures to ensure claimants do not receive benefits they haven’t earned. The new law would also create a new Re-employment Fund to help those who are affected by these changes and create an Unemployment Compensation amnesty program for claimants who have received overpayments and businesses that have failed to make the proper contributions to the system.

It is important to note that this new law will not reduce unemployment benefits for current beneficiaries. It only limits annual increases in the maximum allowable benefit in future years and ensures applicants only receive the benefits to which they are entitled.