The lives of West Virginians who need to stay on unemployment for an extended period will become more difficult if a new bill moving through the state Legislature becomes law.
A new proposal from Republican Senate leaders – a heavily-amended bill passed Wednesday evening – combines two previous bills that proposed drastic cuts to unemployment benefit amounts and the number of weeks people receive benefits.
As criticism mounted, senators killed one of the bills, SB 840, which decreased benefit duration when the unemployment rate was low, and amended the second bill, SB 841, which addressed unemployment taxes and benefits.
The bill could still cause problems for some people on unemployment. Under the new amendments, people will now see a larger starting benefit amount, but that amount will reduce over time, ultimately taking money away from people who need to stay on the support the longest. The bill will also require people already navigating the struggles of unemployment to search for jobs multiple times a week and gives the option of finding part time work, moves that experts say won’t really help people find a sustainable way back into the workforce.
The bill, which passed 24-7, now heads to the House of Delegates. For now, here’s what the Senate’s plan would do:
How does this bill cut unemployment benefits?
The short answer: Some people will see reduced benefits under this new bill, and some changes ease impacts compared to the original bill, but there are still lots of questions.
Currently, unemployment benefits in West Virginia are roughly two-thirds of average weekly wages, and max out at around $662 a week. While the original bill cut that amount, the new version uses a different formula, one that lawmakers say, without providing evidence, will encourage people to reenter the workforce faster.
“We were on a trend that, if we kept going, there would be greater incentive for more to stay longer on the unemployment rolls,” Sen. Eric Nelson, R-Kanawha, who led discussion of the amendments on the floor, told reporters.
The average weekly wage will be calculated using a different salary cap, meaning that people who are making more than $53,000 a year won’t be able to have their higher wages factored into their unemployment benefits.
Besides disadvantaging workers like transportation managers, finance workers, and those in more consistent parts of the construction industry, some workers will see higher payments for the first month, because the benefits will start at 70% of their average weekly wages. But these benefits would drop by 5 percentage points every four weeks, going from 70% of wages at the start to around 45% of wages by the final month of benefits. According to the bill, this means that someone who starts unemployment after January 1, 2025 and is eligible for the maximum benefit amount would be able to receive roughly $713 in week 1, but that would drop to a maximum of roughly $459 by week 21.
To put things differently: if someone stayed on unemployment for eight weeks, they would get close to the amount people currently receive. If that person stayed on unemployment for 12 weeks, they would get slightly less than the current amount. But if that person stayed on unemployment for longer, they would see a visible drop in their unemployment benefits.That decrease would grow the longer they needed to get assistance.
Lawmakers say that the bill is meant to help the majority of people who use unemployment, saying that most people need the support for an average of 14 weeks, and that under the Senate plan, this group would receive roughly the same (or slightly better once other changes are included) amount of financial support as they do already.
But people who need to stay on unemployment benefits longer, a group that data shows includes both a significant number of Black West Virginians who face barriers in the job market and people living in rural counties with higher unemployment rates and fewer job opportunities, will see a notable decrease in their benefits, losing hundreds, if not thousands, of dollars if they use the assistance for the full 24 weeks.
What does the bill say about job searching?
To maintain benefits right now, workers are required to provide proof that they are taking certain actions to search for a job. Under the proposed changes however, workers would now be required to do a minimum of four job search activities each week and report those activities to Workforce West Virginia, or potentially lose their benefits. The bill will also require Workforce West Virginia to develop a process for sharing job openings with unemployed people, referring people to potential employers, and ensuring that people are following up on the referrals given.
It’s a shift that, like other changes to the system under the bill, prioritizes looking for and finding work quickly for the sake of keeping unemployment benefits instead of trying to find work that is sustainable. And given that many job openings in the state require specialized skills and training, this requirement is unlikely to accomplish much besides putting more strain on people already navigating a range of possible barriers to reemployment like needing child care, limited transportation access, and other problems.
Where did this bill come from?
This is the third year in a row that leaders of the state’s Republican supermajority have pushed bills that would make significant cuts in unemployment benefits for West Virginians.
Proponents of the bills argue that West Virginia needs to shore up its unemployment trust fund, which is used to support unemployed workers, and is funded through a tax on employers.
Lawmakers say they are concerned about triggers in the fund that mean whenever it goes over a certain amount, the size of the employer contribution and the benefit amount both increase. And when the state received hundreds of millions in assistance from the federal government during the COVID-19 pandemic and added it to the fund, that trigger kicked in, raising benefits as thousands of people asked for assistance.
Lawmakers and Workforce West Virginia, which manages state unemployment benefits, say that the state is in a fine place now, but if unemployment spikes significantly as West Virginia enters a future recession, the state’s trust fund could run out in 18 months. But critics counter that because the fund is actually healthy right now, this argument hurts people who will need unemployment benefits before any recession actually happens.
Under this bill, how long can someone be on unemployment?
Currently, West Virginia offers 26 weeks of full unemployment benefits, a number in line with many other states. In recent years though, several states have cut unemployment support at the request of employers who argue that they are having to put too much money into state unemployment trust funds.
Under the new bill, West Virginia would cut unemployment by just two weeks, down to 24 weeks total. Nelson told reporters that proposals to cut unemployment weeks any further were unlikely to clear the Senate before the deadline.
Any other major changes?
The bill would create a way for people to continue receiving their unemployment benefits while working a part-time job, but their wages would not be allowed to exceed the unemployment benefit. Lawmakers argue that this will help people make more money while staying on unemployment support. But experts warn that these types of proposals could push people to rush to take low-paying part time work that may not match their skills.
The unemployment system is complicated, and changes are being made quickly, and could be made even more quickly as the legislative session enters its final week. A comprehensive analysis of the latest bill hasn’t been made. That’s part of what has opponents of the legislation – including Sen. Mike Caputo, D-Marion and a former union official, concerned. “I don’t think this should be done in the 11th hour,” Caputo said on Wednesday evening. “I think it’s bad government to do this.”