West Virginia is moving toward significant changes in the state’s unemployment system. The Republican-led Senate has passed legislation that will tie benefits to economic conditions in the state, require more job searching by the unemployed and allow people receiving benefits to work part-time.
SB 2 indexes the number of weeks of unemployment to the state’s unemployment rate. When the rate is 5.5% or lower — it is now 3.7% — laid off workers will be limited to 12 weeks of benefits instead of the current 26 weeks.
The number of weeks of benefits will increase when the jobless rate rises, one additional week for each half-percent increase in the unemployment rate above 5.5%, with a maximum of 20 weeks.
Proponents believe indexing more accurately reflects the economic conditions of the state and encourages individuals to get back to work sooner. They argue that extended jobless benefits may delay a person’s return to the workforce.
Opponents argue 12 weeks may not be enough time to find suitable employment. Additionally, seasonal workers in construction and hospitality are frequently laid off for much longer than three months.
Indexing is catching on. The conservative think tank Foundation for Government Accountability found that indexing in Florida, Georgia and North Carolina improved their unemployment programs and their business climate.
“Indexing unemployment better positions states to handle these (economic) downturns, allows businesses to hire more workers, gets people back to work more quickly, and helps businesses reinvest in their companies,” FGA reported.
SB 3 requires the unemployed to make more clear their efforts to find a job. Currently, individuals are required to self-attest to one job search a week, and those reports are not normally verified by the state. Under the bill, individuals would have to conduct at least four job searches per week and provide details about those searches.
There is no magic in the number four, but neither is there with just one search. It makes sense that increasing the number of applications or searches improves an individual’s chances of finding employment.
And finally, SB 3 allows an individual receiving unemployment to work part-time (no more than 30 hours a week), as long as the wages do not exceed the amount received in unemployment. For example, an individual receiving the maximum of $424 a week benefit could make up to $423 dollars part-time and keep their benefit.
Bill proponents believe this will further encourage work and create more opportunities for individuals to move from part-time to full-time employment.
Unemployment benefits are always a balancing act; they should be generous enough to provide a bridge for people who have lost a job through no fault of their own while they find new work, but not so generous that they discourage work. That happened with the enhanced benefits in 2020, when many individuals could make more on unemployment than at work.
Unemployment benefits are also expensive for businesses. Employers paid the state $200 million in unemployment insurance taxes last year.
The proposed changes under consideration by the Legislature will modernize the unemployment system, link benefits more closely to the economy, help the unemployed by allowing them to work part-time, get people back in the workforce more quickly and hopefully lower the premiums businesses must pay.
