Saving money by imposing burdensome paperwork rules
Apparently the governor of Nebraska is concerned that his state's unemployment rate of 2.5% lowest in the nation according to a survey done in May of this year, is still too high. How else does he justify his proposal to make continuing to receive UI benefits so incredibly difficult?
According to Rickett' so-called "re-employment plan" anyone who is receiving UI benefits would have to contact five prospective employers and submit one formal application for employment each week. They would also have to work with a job coach and develop an individualized job-search plan.
The current requirement is to contact two prospective employers per week. This more than doubles that rule. And it gets worse. Starting after five weeks on unemployment, the benefits recipient has to apply formally to two employers and their employer contacts must be spread over a three day period. After 13 weeks the work contact period goes from three days to four days.
These are onerous requirements. When I was job searching in 2006, I did most of the searching on Mondays. The new ads for jobs were in the Sunday classifieds. I did check Monster.com daily for new listings in my field, but the administrative burden of proving I was looking for work was minimal.
Being out of work is tough. Maybe a few abuse unemployment, but considering that the maximum benefit is $372 per week in Nebraska for 26 weeks, without evidence of massive fraud, it seems like Governor Ricketts is proposing a fix for a nonexistent problem.
Clearly one of the motivations for this new plan is to cut spending on benefits. Funny thing though, paying out less in benefits won't impact how much the state collects in unemployment insurance tax from Nebraska employers. The Federal Unemployment Tax Act base payroll rate is 6% of $7,000. So an employer pays $420 each year to the feds for unemployment. But, they can take a credit of 5.4% for state unemployment insurance paid. That makes the actual amount an employer pays for any Nebraska employee to the feds 0.6% of $7,000 or the grand sum of $42. That same employer pays 5.4% of $9,000 or $486. That means that any employer in Nebraska pays the same amount for unemployment insurance tax for any employee who earns $9,000 or more. $528 per year.
Governor Ricketts would be far wiser to put his efforts into fixing a real problem with Nebraska's unemployment program. According to data from the U. S. Department of Labor, only Indiana has a higher rate of improper unemployment payments than Nebraska. data from DOL
It sucks to be unemployed when you really want to work. Government needs to be helping the unemployed, not making their situations worse.
According to Rickett' so-called "re-employment plan" anyone who is receiving UI benefits would have to contact five prospective employers and submit one formal application for employment each week. They would also have to work with a job coach and develop an individualized job-search plan.
The current requirement is to contact two prospective employers per week. This more than doubles that rule. And it gets worse. Starting after five weeks on unemployment, the benefits recipient has to apply formally to two employers and their employer contacts must be spread over a three day period. After 13 weeks the work contact period goes from three days to four days.
These are onerous requirements. When I was job searching in 2006, I did most of the searching on Mondays. The new ads for jobs were in the Sunday classifieds. I did check Monster.com daily for new listings in my field, but the administrative burden of proving I was looking for work was minimal.
Being out of work is tough. Maybe a few abuse unemployment, but considering that the maximum benefit is $372 per week in Nebraska for 26 weeks, without evidence of massive fraud, it seems like Governor Ricketts is proposing a fix for a nonexistent problem.
Clearly one of the motivations for this new plan is to cut spending on benefits. Funny thing though, paying out less in benefits won't impact how much the state collects in unemployment insurance tax from Nebraska employers. The Federal Unemployment Tax Act base payroll rate is 6% of $7,000. So an employer pays $420 each year to the feds for unemployment. But, they can take a credit of 5.4% for state unemployment insurance paid. That makes the actual amount an employer pays for any Nebraska employee to the feds 0.6% of $7,000 or the grand sum of $42. That same employer pays 5.4% of $9,000 or $486. That means that any employer in Nebraska pays the same amount for unemployment insurance tax for any employee who earns $9,000 or more. $528 per year.
Governor Ricketts would be far wiser to put his efforts into fixing a real problem with Nebraska's unemployment program. According to data from the U. S. Department of Labor, only Indiana has a higher rate of improper unemployment payments than Nebraska. data from DOL
It sucks to be unemployed when you really want to work. Government needs to be helping the unemployed, not making their situations worse.
posted by me at 11:01 AM
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