Posted by marykeating on August 6, 2010 under Economic situation, Unemployment compensation | 
As reported here a few months ago, part of the federal stimulus package consisted of a tax credit for employers who expanded their workforce, and filled the new slots with people who had been receiving unemployment benefits. The plan provided multiple benefits: people on the unemployment rolls become more attractive at a time when many are finding their unemployment status as a stigma, the unemployment rolls decrease, lessening the burden on a bulging system, and employers find it easier to express optimism in the future when the government kicks in a $5,000 tax credit per hire.
Unfortunately, not many people have benefited. According to the U.S. Treasury, only 238 employees were hired in Maryland under this plan, from February through July. The program has room for Maryland companies to hire 4,000 workers through the end of the year; the local economy is unlikely to use all of these credits. That failure seems more associate with lack of awareness of the available tax breaks, however, since hiring is up since January. Maryland’s Department of Labor, Licensing and Regulation has a link to information on the program on its home page.
Of course, the federal government may choose to extend the program; as businesses begin tax preparation the credit may become more well-known.
Posted by marykeating on July 29, 2010 under Economic situation, Unemployment compensation |
resident Obama signed into law the restoration of unemployment benefits last week. For workers whose benefits had expired seven weeks ago, that was good news. They are now entitled to a maximum of 99 weeks of benefits. To employers, the news most likely means another future hike in the unemployment tax applied to the payroll. Still, with unemployment near 10% in many places, and unemployment rates up in three-quarters of the metropolitan areas of the country, it is illogical to blame the unemployed.
In the census study, a question went unanswered about the effect of unemployment benefits on the incentive to find work. Keeping in mind that the benefits are relatively low, one would think that most people would continue to look for work at their former pay rate, since lifestyle tends to follow income level. A short article entitled “Five Myths About Unemployment” appeared in Sunday’s Washington Post, and addresses some of the concerns about the extension, and reasons that overall it is good for the country as well as the individual workers who need it.
Posted by marykeating on July 27, 2010 under Economic situation, Unemployment compensation |
A new study released by the census followed a group of people over several years (2004 through 2007) to compare their “spells” of unemployment. A spell of unemployment is defined as a period of a month or more that the person was unemployed, for whatever reason.
The study found that younger workers had more frequent but shorter spells and that workers in the age range 45 to 54 had the longest. The length of the spells was longer for more highly educated and for non-white workers. Women were more likely to experience periods of unemployment, but their spells were no longer than that of men.
The study also looked at whether people receiving unemployment benefits were more likely to be unemployed longer; apparently some policymakers believe that the availability of unemployment insurance acts as a disincentive to finding work. The length of the spell of unemployment was several weeks longer among those receiving the benefits. The study did not draw any conclusions from this difference, stating that it may be related to other factors. More interesting was the fact that only 20% of the individuals followed did receive unemployment benefits.
Posted by marykeating on May 7, 2010 under Economic situation, Unemployment compensation |
Maryland just became the first state to be entitled to receive $126,750,124 from the United States Department of Labor for unemployment insurance modernization incentive funds. Maryland was the first state to amend the law to become entitled to these funds. The state can use the money for benefits, to administer the program, or add employment services to the unemployed.
The federal program gave an incentive to states to assist part-time workers, people just entering the workforce, and those seeking to upgrade skills. Rather than simply providing job lists and benefits, for example, the funds will help people adjust to changing economies. Though Baltimore has been classified as part of the rust belt for some time, other types of jobs are going overseas, and Marylanders with certain skills find that their old skills are not wanted on this continent any longer. New training programs will help people figure out what skills are still in demand, and how to get them.
In the short term, of course, the money is a boon to a nearly bankrupt fund. As employers know, the rate of unemployment contributions has grown enormously, and this grant from the federal government may at least stop future increases in the tax rate.
Posted by marykeating on March 31, 2010 under Economic situation, Unemployment compensation |
The federal government incentive program is great, and there is even better news from Maryland. On Friday, the Governor leaped onto the still-hot-off-the-presses bill, and signed into law a program providing tax credits of up to $5,000 to employers adding the unemployed to their payrolls. The idea is to jumpstart the process of moving people into jobs that employers were not quite sure they were ready to fill.
The eligible employee must have been receiving unemployment benefits, or exhausted them in the last year, and the position filled must be newly created or vacant for six months or more. People who were denied unemployment benefits therefore do not qualify for the subsidy. Hard luck for them, since they have been without any compensation, but this incentive is designed to trade the burden of unemployment benefits for a tax break. A few other restrictions (designed to avoid loophole jumping) are detailed in the Department of Labor, Licensing and Regulation’s flyer.
Posted by marykeating on February 18, 2010 under Unemployment compensation |
The latest figures from the Bureau of Labor Statistics show some slight improvement in the rate of unemployment, with women enjoying the biggest job gains. Unemployment among women stands at 7.9%, and men at 10%. Teenage unemployment is higher, but of course teenage employees include those who have not finished high school and have no job experience.
I’m not going to want to look at these figures next month, because who knows how the snow afflicting the Eastern seaboard will mess with the trend. We already know that retail sales were lower (when malls are closed it’s hard to shop), and lots of people worked from home or not at all. But when this glitch is FINALLY over, we can hope that unemployment rates will continue to fall.
Posted by marykeating on February 7, 2010 under Employment at will, Unemployment compensation |
The plight of unemployed workers is inextricably linked to the high rate of foreclosures. These are not the stories of people who bought a house on credit that they could, under no fantasy, afford. Those are the extremes, and were never destined to work out.
These are the stories of ordinary people squeezed by daily expenses, but making it until they were brought down by a prolonged period of unemployment. They lose their houses, their credit is smashed, and when they finally get a new job, they remain insecure. A recent New York Times article details only three such examples, but they are surely worth pondering as we see whether the American mindset will permanently change. Our grandparents (or parents or great-grandparents) who lived through the Great Depression were more likely to believe in saving to the point of miserliness, buying nothing on credit, and putting by for retirement. Yet, as the thirties turned into the forties and fifties, the post-war economy soared, social security was available, good private pensions abounded, and people took more risks. Easier, perhaps, when a lifetime at one company was commonplace.
Now many well-educated, well-trained, hard-working people have lived the reality of employment at will. They may not be able to afford a house again, or be able to handle the commitment required. They know that loyalty to an employer is a one-way relationship. Will their experiences change our priorities and choices, or will our native optimism prevent us from redefining the American dream?
Posted by marykeating on February 6, 2010 under Pending legislation, Unemployment compensation |
We get occasional glimpses of hope in the economic news, but the unemployment rate remains high. The latest projection I heard projected unemployment remaining above ten percent all year. To deal with the prolonged unemployment of so many workers, the government has extended the maximum weeks of unemployment benefits. It also has increased the unemployment tax payable by employers.
This sets the stage for the classic clash of interests in Annapolis. Some business interests are asking for a reduction of benefits, while others are urging higher weekly benefits and more weeks. An emergency bill is pending this session, and has made it past the first stage. According to the bill, some of the changes to the law are necessary to qualify for the federal stimulus funds.
One of the more employee friendly provisions changes the formula for calculating the weekly unemployment benefit, by looking at the most recent four quarters of pay rates. This provision would help workers who had been earning increased amounts in their fields before becoming unemployed.
In addition, the law provides for extended benefits and training for unemployed workers who have been unemployed for an extended period, and are in a declining occupation, or were laid off in a permanent reduction in force. Employers’s rating experience is not charged for unemployed individuals receiving the additional training benefits.
Posted by marykeating on January 1, 2010 under Unemployment compensation |
The Court of Special Appeals recently granted unemployment benefits to a woman whose claim had been rejected by a hearing examiner, the Board of Appeals, and the Circuit Court. Pursuing this many appeals is not easy, nor inexpensive, but the effort will help others, not just the unemployed claimant in this case.
Michelle Parham worked for several months for Mid-Atlantic Baking Company. She called in sick one day early in her tenure, then again for two consecutive days. Upon her return, her supervisor gave her a write-up, with the box marked “termination” checked. Another company document states that Ms. Parham walked out without clocking out, and thus was labeled a voluntary quit.
It is difficult but not impossible to obtain unemployment benefits if one quits a job; the reason for quitting is crucial. In this case, though, Ms. Parham contended that she was fired, and the company claims that she was told to speak with a higher up supervisor, but instead, left the plant without ever contacting the company again. The dispute centered completely on what was said at the final meeting between the employee and the manager on duty.
The manager on duty did not attend the hearing. Instead, two employees who were not at the plant on Ms. Parham’s last date testified that she had been instructed to call the department supervisor, but instead walked out. Their testimony was not based on personal knowledge, nor was it apparently based on discussions with the manager on duty. Hearsay testimony, in which one person reports on what someone else says and offers it for the truth of the report, is allowed in unemployment hearings. On the other hand, the hearsay testimony must give some indication that it’s reliable. Mid-Atlantic failed to convince the court that its hearsay testimony, which contradicted both Ms. Parman’s testimony and the document indicating her termination, was not reliable enough to uphold the denial of benefits.
In litigation, companies often produce after-the-fact explanations of an employee’s departure. This comes up frequently in discrimination cases, in which the reason for a termination is discriminatory bias or some legal explanation focusing on the employee’s faults. To buttress its case, Mid-Atlantic should have brought the manager on duty as its witness, since she had personal knowledge of the discussion. By leaving her out of the loop, Mid-Atlantic produced insufficiently strong evidence to support its version of the facts.
Posted by marykeating on December 5, 2009 under Unemployment compensation |
Receiving unemployment benefits is a mixed benefit: it’s better to have a job, both financially and for the sense of security and accomplishment it gives a worker. Unemployment benefits are a reasonably good safety net, though, when the job search effort is not working out. It might keep the roof over the heads, the mac and cheese in the bellies.
Congress and Maryland have been gradually increasing the number of weeks of benefits allowed, in the context of the lingering recession and the unemployment rate at 10%, according to the latest statistics, but topping that in many places.
This morning’s New York Times reported that we may not see the pattern in former recessions, where unemployment continued to rise even as the economy climbed back.
Still, it could be awhile before the unemployment rate drifts back down to 4 or 5%. Maryland now has increased the maximum weekly benefit, which is now $410. This rate applies to employees who formerly earned from $9,816 per calendar quarter and up. For many people that is a major comedown from their former salaries, but this benefit is necessary for many people to survive. The schedule of benefits can be found here.
