Legislation to modernize Kentucky’s unemployment system passes House committee

With some of the lowest employment levels in the nation and small businesses struggling to find workers, members of the business community testified in front of the House Economic Development and Workforce Investment on the need to reform the Commonwealth’s unemployment insurance system on Thursday.

The committee heard testimony from members of the business and education community including Kentucky Chamber Senior Vice President Kate Shanks, Kentucky Chamber Senior Policy Analyst Dr. Charles Aull, and Kentucky Community and Technical College System President Dr. Paul Czarapata.

House Bill 4, sponsored by Representative Russell Webber, reforms Kentucky’s unemployment insurance system while supporting re-employment, job training, and economic growth. 

Kentucky has experienced record-breaking economic investments and the need to implement solutions to Kentucky’s workforce shortage has become even more urgent, Shanks said. “Reasons for Kentucky’s workforce shortage are many, and the solutions must be multifaceted,” she said referring to the Kentucky Chamber Foundation’s workforce crisis report released last year.

As Kentucky is experiencing a worker shortage, Shanks said reforms to Kentucky’s outdated unemployment system are a key step to addressing Kentucky’s crisis. House Bill 4 works to address the challenges from the workforce report, she said.

Statistics show Kentucky on average has one of the longest durations spent on unemployment in the nation, and to help fill the over 100,000 open jobs across the Commonwealth, the legislation would adjust the maximum number of weeks for unemployment benefits from 26 to 24 weeks, depending on the current unemployment rate. Dr. Aull noted House Bill 4 would not reduce the amount of benefits an individual receives.

House Bill 4 would also allow the unemployment insurance system to adjust the duration of benefits during periods of economic growth and economic downturn.

“We cannot just focus on job creation. We must focus on the workers to fill jobs,” said Shanks.

House Bill 4 aims to address Kentucky’s skills gap by offering five weeks of additional unemployment benefits to individuals that are enrolled in a certification or higher education program. 

During his testimony, Dr. Czarapata said higher education is key to success, and this legislation is a positive step toward upskilling Kentuckians as more jobs across the nation are requiring some form of higher education.

The legislation also increases the number of required work searches per week to help ensure Kentuckians get back to work quickly and authorizes a work share program.

The bill passed favorably out of committee with a vote of 16 yes votes, 5 no votes, and 1 pass vote. The bill now heads to the full House of Representatives for a vote.