* As subscribers know, talks on this topic appeared horribly snagged last week. No longer…
Governor Bruce Rauner announced today that his administration has reached an agreement with business groups and labor organizations to reform and improve Illinois’ unemployment insurance system.
“We have a lot of work left to turn around Illinois, but today’s agreement is a step towards making us more competitive so we can increase investment in the state and grow jobs,” Governor Rauner said. “I want to thank the legislators involved in crafting this agreement and urge the legislature to swiftly pass legislation and send it to my desk.”
“For more than 30 years, governors and legislative leaders have brought business and labor together to negotiate changes to Unemployment Insurance for the benefit all in the state of Illinois,” Illinois AFL-CIO Secretary-Treasurer Tim Drea said. “Because it is so vital to the economy and safety net for working families, Unemployment Insurance negotiations are always difficult, but all parties were committed to the process and an equitable agreement was achieved.”
“On behalf of the employer community, we would like to thank our counterparts in labor, the Rauner Administration and the representatives of the four legislative caucuses who all played valuable roles in reaching this agreement,” said Rob Karr, President & CEO of the Illinois Retail Merchants Association. “While the discussions were rigorous, they were always fair and ultimately productive.”
Under the agreed framework an individual would be ineligible to receive unemployment insurance benefits following separation with an employer if a worker:
• Damaged an employer’s property through grossly negligent conduct;
• Consumed alcohol, illegal or non-prescribed drugs during work hours in violation of an employer’s policies;
• Provided false information in an employment application;
• Endangered the safety of himself/herself or co-workers through grossly negligent conduct;
• Knowingly and repeatedly violated reasonable written attendance policies of an employer;
• Refused to obey an employer’s reasonable and lawful instructions unless the refusal is due to the lack of ability skills or training of the worker or if the instruction would result in an unsafe act; or
• Did not maintain required licenses, registrations and certifications required by law for the specific job.
Under current law, a worker could still be eligible for unemployment insurance benefits if any one of the above items occurred in the workplace. For the first time ever, these common-sense reforms will be implemented, creating a more fair and stable unemployment insurance system.
Additionally, the framework allows recently separated workers who are eligible for Social Security to receive a full unemployment insurance benefit. Under current law, 50 percent of the amount an older worker receives for Social Security is subtracted from the potential unemployment insurance benefit. Illinois and Minnesota are the only two states in the nation to allow this practice. This reform will return $25 million to Illinois seniors.
Governor Rauner had made strengthening misconduct and abuse provisions central components of his unemployment insurance reform proposal.
*** UPDATE *** Press release…
After many hours of negotiations, the Illinois Chamber of Commerce is supporting an agreement between business leaders and organized labor on unemployment insurance changes that has been reached. “For the business community, the two key issues in the agreement are a benefit change for seniors and a change to ‘misconduct’ for employers,” said Todd Maisch, president and CEO of the Illinois Chamber.
Both changes are important philosophical revisions for both business and labor, but neither are big ticket items from a dollar perspective.
The benefit change will eliminate the offset of Social Security for determining benefits based on an individual’s income. “With this change, some seniors may now become eligible for unemployment insurance benefits where they would have previously been disqualified because of Social Security income,” explained Maisch. Others will receive higher benefits because their Social Security income would have reduced their benefit amount. Illinois is the last state in the nation to offset unemployment insurance benefits with social security.
“The proposed revisions to “misconduct” include eight typically egregious circumstances for which employers may protest a benefit claim,” said Maisch. With this compromise, employers will not have to prove that the reason for the discharge was “willful and deliberate” and caused harm to the employer or was repeated after warning or instruction from the employer.
The bigger dollar issues for the unemployment system are the elimination of changes to the law that were set to take effect on Jan. 1, 2016. If there had not been any agreement to change the law, employer unemployment insurance taxes would have increased an annual $470 million, and benefits to unemployed workers would have been reduced by approximately $300 million per year.
Finally, there will be a moratorium on any UI legislation through Jan. 1, 2018. This compromise plan needs state lawmaker approval and the governor’s signature.