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March 9, 2022 9:57am

Unemployment insurance reform bill passes General Assembly

The General Assembly gave final passage to sweeping unemployment insurance reforms on Tuesday. House Bill 4, sponsored by Rep. Russell Webber (R-26), is intended to modernize several key parts of the current benefit program to support laid-off workers and encourage rapid re-employment.

Key parts of the bill include:

  • Increasing the work search requirement to include five weekly activities, at least three of which must be applying or interviewing for a job. The definition of work search activities has also been revised to include networking events, job shadowing, and participating in skills or jobs training.
  • Establishes a “No-Show” reporting system for employers to address the issue of candidates who fail to show up for interviews or refuse an offer of suitable work.
  • Extends benefits by up to five weeks if the claimant is enrolled in an approved job training or certification program.
  • Establishes a “work-share” provision that gives employers an alternative to lay-offs.
  • Indexes the maximum duration of benefit weeks to Kentucky’s average unemployment rate with a range of 12 weeks when the rate is 4.5% to as much as 24 weeks when the rate is 10%.

The reforms included in HB4 stem from the work of the General Assembly’s Unemployment Insurance Reform Task Force which examined Kentucky’s current system during the 2021 interim session. Kentucky’s workforce participation rate has historically been one of the country’s lowest with only 56.8% of adults employed or actively seeking employment. Individuals receiving benefits in Kentucky spend longer times on UI, averaging 19 weeks. This bill is part of a larger effort to encourage rapid re-employment and improve employment rates and will also ensure the solvency of Kentucky’s UI trust fund.

HB 4 cleared the Senate last week with a committee substitute that changes the effective date of the reforms to January 1, 2023 to allow the Workforce Cabinet time to implement the changes and exempts seasonal employees from the increased work search requirements. The bill moved to a House Concurrence Committee on Tuesday before it was adopted with changes. HB 4 now heads to Governor Beshear’s desk for consideration.