Changes to Kentucky’s unemployment insurance (UI) system passed in 2022 are set to go into effect January 2023. Meanwhile, Kentucky businesses are already seeing the positive impacts of a new law replenishing the Unemployment Insurance Trust Fund and freezing employer tax rates.
Kentucky state Rep. Russell Webber talked with The Bottom Line about these bills and what they will mean to Kentucky.
Webber sponsored major UI policies in the 2022 session, including House Bill 4, a major overhaul of Kentucky’s outdated system, to better support re-employment, job training, and economic growth.
“A number of other states have implemented policies similar to what we’ve done in Kentucky this year, and I think they’ve seen their trust funds grow healthier. They’ve seen fewer people needing to draw unemployment benefits. Those folks have returned to the workforce and have good paying jobs that are supporting their families and paying their bills,” Webber said, calling the new policy a “gamechanger for the state.”
House Bill 144, also sponsored by Webber, will save employers an estimated $75 per covered employee on average, for a total savings of approximately $130 million in 2022. In addition to the tax savings, this legislation also appropriated $242 million of federal relief funds to Kentucky’s unemployment insurance Trust Fund to replenish funds lost during the height of the pandemic. With this appropriation, employers can continue building the Trust Fund to prepare Kentucky’s economy for future recessions.
“By freezing employer tax, we allowed businesses to have breathing room. Many employers coming out of the pandemic are struggling to get back on their feet. This is a measure to help them make payroll, to pay for lights and utilities, and to basically rebuild what had been lost there,” Webber said.
As for what comes next, he said workforce will continue to be a priority of the General Assembly in years to come to make Kentucky more competitive.
“We made great strides in the 2022 session toward helping to keep the doors of small businesses open in the state, to encourage folks to go back to work, and to create a climate which will encourage employers and individuals alike to look at Kentucky as a great place to live, to work, and to make this their home,” Webber said.
Watch the full interview with Rep. Russell Webber below:
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