Corbett Signs Unemployment Compensation Reform Bill

HARRISBURG – Governor Tom Corbett today signed Senate Bill 1310, a reform bill that modernizes Pennsylvania’s Unemployment Compensation, or UC, law.

The new law enables Pennsylvania to repay a nearly $4 billion UC Trust Fund debt to the federal government. Pennsylvania was one of 36 states that borrowed from the federal government to keep UC benefits flowing during the recession.

The measure also updates certain aspects of the state’s UC law, including some relating to benefits and eligibility that had been neglected for nearly 40 years.

“Unemployment compensation reform equals jobs — it’s that simple,” Corbett said. “I’m pleased that we’ve made this important step toward putting Pennsylvania’s financial house in order. This bill protects our workers while taking away a burden that has slowed job growth and investment.

“The new UC law repays the state’s debt, restores the fund’s solvency, does not raise taxes and enables Pennsylvania to be competitive while still providing the UC safety net to unemployed Pennsylvanians,” he added.

Specifically, Corbett said the new law will:

• Refinance the UC Trust Fund debt by issuing bonds at a low, fixed rate.
• Reform employer taxes by increasing the taxable wage base from $8,000 to $10,000 and lowering the State Adjustment Factor.
• Modernize benefit eligibility by increasing the base-year wage requirement from an average of 37 percent outside the high quarter to at least 49.5 percent. This change will not affect any current claimants, and will affect less than 10 percent of all claimants when the law goes into effect in January 2013.
•  Use 5 percent of employee taxes collected to establish a Re-employment Fund for training initiatives to help jobless Pennsylvanians return to work.

“These reforms stay out of workers’ pockets, responsibly repay our debt, make the UC system healthy without raising taxes on businesses and modernize eligibility requirements – making them fair and reasonable,” said Department of Labor & Industry Secretary Julia Hearthway. “Enacting these reforms will ensure the UC Trust Fund’s return to solvency and the UC system’slong-term availability for those who need it.”