Lawmakers gave final passage to a major overhaul of Kentucky’s outdated unemployment insurance system Tuesday in Frankfort. House Bill 4, sponsored by Representative Russell Webber, reforms Kentucky’s unemployment insurance system while supporting re-employment, job training, and economic growth.
The state Senate made slight changes to the bill last week and sent it back to the House for final approval. The House voted to concur with the Senate’s changes in a 58-36 vote.
House Bill 4 makes several critical changes to Kentucky’s unemployment insurance system:
- Ties the number of weeks an individual can receive benefits to economic conditions.
- Provides an upskill provision to allow claimants to receive up to five additional weeks of benefits if the claimant is enrolled in pursuing higher education or training certifications.
- Strengthens Kentucky’s work search requirements for benefit claimants
- Makes unemployment insurance taxes fairer for small businesses and new employers.
- Establishes a “work-share” provision that gives employers an alternative to lay-offs.
Historically in Kentucky, individuals spend longer periods of time on unemployment than elsewhere in the nation. In addition, Kentucky has one of the lowest employment-to-population ratios in the nation. This is despite the fact that the Commonwealth has an estimated 150,000 open jobs.
As demonstrated by other states that have reformed their unemployment systems – such as North Carolina and Georgia— the reforms implemented by House Bill 4 can lead to shorter periods of benefit duration and quicker transitions to re-employment for laid-off workers. This can improve employment rates, help small businesses, and ensure the solvency of Kentucky’s UI trust fund. The trust fund is funded solely by taxes on employers and is used to pay out benefits to laid-off workers.
House Bill 4 now heads to the governor’s office.