Austin The Texas Association of Business demanded a comprehensive overhaul to the Unemployment Insurance system. For years the TAB has called upon the Legislature and state leaders to institute these needed changes to help get Texans back on their feet and ensure our state will always be on stable financial footing.
Its clear that our unemployment system is in need of a drastic change" said Bill Hammond President of the TAB. Instituting the TAB proposals will save Texas over $638 million per year. Our current system which spends nearly fourteen percent of its entire UI budget on fraud and overpayments is simply unacceptable to our employers and taxpayers."
Listed below are the reforms TAB has consistently championed in its efforts to improve the Texas unemployment insurance system:
Eliminate Sham Employer" loophole -- A loophole exists in Texas unemployment law that enables some claimants to qualify for benefits when they were fired from their last job with cause. These claimants could delay filing a claim until after they have performed an odd job for a friend relative or other third party. Once the short term job ends the worker is laid off" the worker can file a successful claim for benefits and name the odd job as their last employment even though it was not for a true employer. As a result claimant will receive the benefits causing TWC to socialize the costs across the accounts of all employers. This proposal would save the trust fund $34 million by basing the decision to award benefits on a claimants separation from his last true job.
Benefits integrity The Legislature should amend current law to provide a measure of protection for the integrity of the UI trust fund by preventing wage credits in the benefit computation that were earned from employers in which the claimant was terminated for misconduct. Estimated annual savings -- $63 million
Delay payment for the Waiting Week" -- 29 states do not provide payment during first week of unemployment. However Texas pays for that week after worker has collected benefits for three subsequent weeks of unemployment. This has the potential to discourage people from returning to work before fifth week in anticipation of receiving double benefits for the fourth week. Estimated annual savings -- $52 million
Allow severance payments to expire before paying UI benefits Current law enables both unemployment benefits and severance payments to be collected simultaneously. TAB believes the law should be amended to mirror the unemployment disbursal currently given when an employee is given wages in lieu of notice" which allows the recipient to begin receiving unemployment insurance benefits after the wages in lieu of notice have expired. Estimated annual savings $29.6 million
Dramatically reduce fraud and overpayments: According to the US Department of Labor Texas overpaid unemployment benefits and fraud by approximately $153.1 million during 2007 13.8 of the total unemployment payout. Based on the efforts of other states it is reasonable that Texas can save $100 million annually with improved oversight.
Better efficiency to get the unemployed back on their feet: In the last quarter of 2007 Texas had the most job creation of any state in the nation. However our State ranked near the bottom third of states in the duration of time it takes for the unemployed workers to find jobs. If the unemployment system increased its efficiency to be on par with the top five states in the nation reducing the average unemployment insurance duration by only 2.4 weeks our state would save $360 million.
Job one of the Texas Workforce Commission is put Texans in jobs" said Hammond. In these tough economic times improving our system to help the unemployed get back on their feet in a way that addresses their immediate needs and safeguards the unemployment insurance funds stability is one of the most pressing challenges we face. The TAB proposals are a critical first step in meeting these needs."
Founded in 1922 the Texas Association of Business is a broad-based bipartisan organization representing more than 140000 small and large Texas employers and 200 local chambers of commerce.
Austin The Texas Association of Business demanded a comprehensive overhaul to the Unemployment Insurance system. For years the TAB has called upon the Legislature and state leaders to institute these needed changes to help get Texans back on their feet and ensure our state will always be on stable financial footing.
Its clear that our unemployment system is in need of a drastic change" said Bill Hammond President of the TAB. Instituting the TAB proposals will save Texas over $638 million per year. Our current system which spends nearly fourteen percent of its entire UI budget on fraud and overpayments is simply unacceptable to our employers and taxpayers."
Listed below are the reforms TAB has consistently championed in its efforts to improve the Texas unemployment insurance system:
Eliminate Sham Employer" loophole -- A loophole exists in Texas unemployment law that enables some claimants to qualify for benefits when they were fired from their last job with cause. These claimants could delay filing a claim until after they have performed an odd job for a friend relative or other third party. Once the short term job ends the worker is laid off" the worker can file a successful claim for benefits and name the odd job as their last employment even though it was not for a true employer. As a result claimant will receive the benefits causing TWC to socialize the costs across the accounts of all employers. This proposal would save the trust fund $34 million by basing the decision to award benefits on a claimants separation from his last true job.
Benefits integrity The Legislature should amend current law to provide a measure of protection for the integrity of the UI trust fund by preventing wage credits in the benefit computation that were earned from employers in which the claimant was terminated for misconduct. Estimated annual savings -- $63 million
Delay payment for the Waiting Week" -- 29 states do not provide payment during first week of unemployment. However Texas pays for that week after worker has collected benefits for three subsequent weeks of unemployment. This has the potential to discourage people from returning to work before fifth week in anticipation of receiving double benefits for the fourth week. Estimated annual savings -- $52 million
Allow severance payments to expire before paying UI benefits Current law enables both unemployment benefits and severance payments to be collected simultaneously. TAB believes the law should be amended to mirror the unemployment disbursal currently given when an employee is given wages in lieu of notice" which allows the recipient to begin receiving unemployment insurance benefits after the wages in lieu of notice have expired. Estimated annual savings $29.6 million
Dramatically reduce fraud and overpayments: According to the US Department of Labor Texas overpaid unemployment benefits and fraud by approximately $153.1 million during 2007 13.8 of the total unemployment payout. Based on the efforts of other states it is reasonable that Texas can save $100 million annually with improved oversight.
Better efficiency to get the unemployed back on their feet: In the last quarter of 2007 Texas had the most job creation of any state in the nation. However our State ranked near the bottom third of states in the duration of time it takes for the unemployed workers to find jobs. If the unemployment system increased its efficiency to be on par with the top five states in the nation reducing the average unemployment insurance duration by only 2.4 weeks our state would save $360 million.
Job one of the Texas Workforce Commission is put Texans in jobs" said Hammond. In these tough economic times improving our system to help the unemployed get back on their feet in a way that addresses their immediate needs and safeguards the unemployment insurance funds stability is one of the most pressing challenges we face. The TAB proposals are a critical first step in meeting these needs."
Founded in 1922 the Texas Association of Business is a broad-based bipartisan organization representing more than 140000 small and large Texas employers and 200 local chambers of commerce.
