Maintaining unemployment benefits

When a person receiving unemployment insurance benefits goes back to work only to get laid off again, they sometimes see their benefit levels drop significantly after they go back on unemployment.

Sponsored by Rep. Mike Obermueller (DFL-Eagan), HF3274 would provide workers who return to the state’s unemployment rolls after being temporarily employed a guaranteed similar level of benefits as what they previously had.

The House Higher Education and Workforce Development Finance and Policy Division approved the bill March 4 and referred it to the House Finance Committee. Sen. Jim Carlson (DFL-Eagan) sponsors a companion, SF3123, which awaits action by the Senate Business, Industry and Jobs Committee.

Because of the way unemployment benefits are calculated, people who return to work long enough to earn new wage credits are often forced to establish a new unemployment insurance benefit account that pays significantly less than what they were getting before.

“People are going from $400 or $500 in benefits down to $30 or $40 dollars in benefits,” Obermueller said.

The bill would “front-load” the new benefit accounts so that recipients get at least 80 percent of their old benefit level. To accomplish this, it would accelerate payments from the new account, meaning that a recipient would receive larger payments but would exhaust their total benefits in a shorter span of time.

“You don’t get any additional dollars this way, but you do get them earlier in the process,” Obermueller said.

Once the benefits from their new account are exhausted, Obermueller said a recipient could go back on their old benefit account, which may give them access to federal or state unemployment extensions as well.

If enacted, the bill’s provisions would expire on June 30, 2011. Obermueller said the bill is only meant to be a temporary measure.

Lee Nelson, director of legal affairs for the Department of Employment and Economic Development, said DEED worked with Obermueller on the bill’s language and supports the legislation.

Rep. Sarah Anderson (R-Plymouth), the division’s Republican lead on workforce issues, called the bill “a great idea.”