When the final budget proposal was unveiled, it contained an allocation for $500 million for the unemployment insurance (UI) trust fund. Beefing up the fund brings it closer to a pre-pandemic level.
Had the layoffs from COVID-19 not occurred, the trust fund would have had a balance in 2020 of approximately $1 billion. Under normal circumstances, an employer’s experience rating will increase when employees are laid off. Under the federal CARES Act, however, states are prohibited from increasing an employer’s experience rating. That means those ratings remain at pre-pandemic levels, thus keeping the fund from replacing revenue paid out in claims at a faster pace. So the $500 million is a real boost to the fund and keeps the state from having to borrow from the federal government in the event of another wave of layoffs. The Indiana Chamber fully endorses this action and believes it was a prudent move by the Legislature.
Meanwhile, HB 1152 will clean up additional fraud in the unemployment system that was brought to light or arose due to the pandemic; the legislation was authored by Rep. Dan Leonard (R-Huntington). The Chamber credits the Department of Workforce Development for the tremendous work it conducted last summer with the record volume of UI filings. It became clear that fraud protections were sorely needed and we supported all efforts to protect the UI trust fund from duplicitous activity. The bill passed with no opposition in the House, but passed along party lines in the Senate.
Mike Ripley is vice president of health care policy & employment law for the Indiana Chamber. He has been with the organization for 13 years and previously was a longtime state legislator in northeast Indiana.
