Legislation would make it harder to get unemployment benefits in Arizona - East Valley Tribune: Business

Legislation would make it harder to get unemployment benefits in Arizona

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Posted: Tuesday, March 27, 2012 8:34 pm

Arizonans who lose their jobs through no fault of their own will have to do more to look for work to qualify for unemployment benefits under the terms of a measure given preliminary Senate approval on Tuesday.

Existing law makes payments available for those who are able and available to work. And rules enacted by the state Department of Economic Security require there be efforts to find a job "more than one day of the week.''

HB 2519 would add a requirement that the recipient has engaged in a "systematic and sustained effort'' to obtain work at least four days a week and made at least three work search contacts during the week.

The legislation also would nearly double the amount someone had to earn in a three-month period to collect benefits. The net results would make it harder for some who were not working full time to get any help.

Sen. Al Melvin, R-Tucson, said those who really want to work should have no problem finding a job despite the most recent figures showing a state unemployment rate of 8.7 percent.

"Every trucking company in Arizona is hiring,'' he said during Tuesday's Senate debate.

"The mining industry has over 1,000 jobs it cannot fill in this state,'' Melvin said. "In my view, our unemployment compensation provisions are overly generous.''

State law entitles those who are laid off or fired for no fault of their own to collect half of what they were making. But the limit on benefits is $240 a week.

Businesses have a vested interest in limiting who can collect and how much as the first 26 weeks of payments come from a fund financed by premiums paid by employers. Rates, which are set based on how frequently a company lays off workers, range from less than 1 percent to 5.4 percent of the first $7,000 of each employee's salary.

But the rates also are linked to keeping money in the fund.

Rep. Karen Fann, R-Prescott, noted that fund went bankrupt, at least in part due to the length and depth of the recession. The result was the state had to borrow money from the federal government -- with interest -- and a surcharge being placed on employers to repay that loan.

As of March 7, the most recent figures available, the state owed just short of $400 million.

Fann said the changes to the system would help bring stability.

Sen. Steve Gallardo, D-Phoenix, complained about the new earning requirements.

Under the current law, someone needs to have earned $1,500 over a quarter to get any benefits. HB 2519 would peg that to the minimum wage, a computation that would take the minimum immediately to more than $2,900 a quarter.

"When you have folks that are out there struggling, you're going to make it difficult for them to obtain unemployment benefits?'' he asked.

"Arizona is better than this,'' Gallardo said. "We should not turn our backs on folks that are struggling right now.''

But Michelle Bolton, who lobbies for the Greater Phoenix Chamber of Commerce, said that $1,500 figure has been the same since 2004. Bolton said the new figure comes out to about 30 hours a week at the current minimum wage of $7.65 an hour, saying 30 hours is probably the minimum of what most firms consider full-time employment.

Bolton acknowledged that nothing in current law requires that someone be employed full time before becoming eligible for benefits. But she said the "spirit'' of the law is to protect those who had full-time jobs, with the idea that they should be out looking for new full-time jobs to replace their old ones.

Sen. Olivia Cajero Bedford, D-Tucson, questioned whether it was reasonable to expect someone getting the state's small unemployment payments to be actively looking for work, what with the high cost of gasoline and even having to hire a sitter. Fann said, though, people can apply for jobs online, whether from home or a nearby library, and it takes little effort to call companies to see if they are hiring.

Gallardo also noted that the law would give employers seven days to provide final pay to a laid-off worker; the current requirement is three.

The legislation also says anyone who fails a drug test by a prospective employer would be considered available for work and therefore would forfeit benefits for that week. The same penalty would apply to someone who is out of work and refuses to submit to a drug test.

 

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