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.
Posted by marykeating on October 30, 2009 under Employment benefit issues, Pending legislation |
The Secretary of Health and Human Services released a report explaining in very clear language the effect of health insurance reform on the ability of small businesses to offer health insurance. According to HHS’s report, 56,593 small businesses in Maryland alone would qualify for an attractive tax credit. In addition, health insurance reform would end the catastrophe that effects some businesses when insurers hike premium costs as a result of an illness or injury of even a single worker. Small businesses have been rated by their own experience. So when one person of 50 has a serious illness, incurring hospital care, the rates for the business are directly affected. For a huge business, an illness or two does not alter the experience very much, because of the law of averages. But small businesses can be forced into giving up insurance benefits if two people are diagnosed with cancer.
The new law, if it passes, would forbid rating based on health status. In the end, the law of averages across the spectrum of the state or the country will drive insurance prices. In addition, the new law would end the lifetime cap on insurance benefits. This was an issue advocated by the late Christopher Reeve, who would not have made the progress he did without personal resources.
Finally, the law would end the practice of discrimination against women. There are insurance plans that refuse to cover women of child-bearing years, or treat pregnancies as uncovered conditions. (Maryland law is stronger than some states, and does not permit a blanket prohibition against insurance for childbearing.)
The economic hardships that have befallen many employees and businesses have brought some of these issues to the forefront. I hope we have the fortitude to make some much-needed reform to the existing system.
Posted by marykeating on September 28, 2009 under Unemployment compensation |
The New York Times hit another graphic home run with the simple and dramatic illustration of the competition for jobs during this recession. On average, according to its analysis of Bureau of Labor Statistics, there are six unemployed people for each job opening. Even government openings are down, despite certain areas in which the government is hiring.
Since not all jobs are alike, there are regional differences in these statistics. In addition, a major source of pain shows up in the drop in open manufacturing services positions. Many of these jobs do not require specialized certificates or education, and so career-switchers can think about manufacturing openings (as opposed to an open registered nurse position, for example). But competition remains fierce.
This state of affairs makes the unemployment insurance extension all the more necessary.
Posted by marykeating on September 7, 2009 under Unemployment compensation |
The headlines continue to report, cautiously, that we are out of the recession. But the effects of the recession are still with us. And the recovery has not extended to job creation, at least not yet.
Today’s New York Times explains that unemployment data can be misleading since the percentage of the unemployed counts only those who are actively searching for work. The article focuses on four people, typical of many, who lost their jobs and after numerous fruitless searches for new work, have essentially given up. They may stay home with the kids, go back to school, retire, or simply hang on until times get better. Others are working part-time, but would work full time if they could. If the jobless rate included the “discouraged” and the “marginally attached to the labor market” categories, unemployment would stand at 11%, rather than 9.7%.
The last local report from the Bureau of Labor Standards for Baltimore/Towson is from May; so it does not show any bright spots. For those employed though, state-wide average compensation rose by 2.5% from June 2008 to June 2009.
Posted by marykeating on August 13, 2009 under Wage and hour issues |
Both private and public employers have been experimenting with cutting back employees’ hours instead of choosing some for layoff. The benefits of this strategy include sparing some of the employees from the devastation of a full layoff, improving morale, and saving on the severance or unemployment benefits costs of laying off employees. For employers expecting to bounce back as the recession eases, keeping the employees also will make it easier to spring back into action. Employees are not likely to enjoy the cut in pay, but some may make good use of the extra time.
This practice works most smoothly for hourly employees, who must be paid for all hours worked, at least minimum wage, plus overtime pay. If an employee who used to work five full days per week is reduced to four, the employer must pay him for the four days. This strategy can backfire if the furlough is in name only. If employees actually are working on the days when they are supposed to be off, then the employer is in danger of violating the Fair Labor Standards Act and Maryland’s Wage Payment and Collection Act. Actual work includes checking email and voicemail messages, responding to customers or coworkers, and waiting on call in some instances, depending on the amount of freedom the employee has while waiting to be called into action. If the employee often works from home or from the other end of a telephone or blackberry, the employer needs to be vigilant to be sure that the employee is not responding as usual on a furlough day.
Exempt employees pose a more difficult problem. An employee exempt from overtime compensation requirements must meet responsibility requirements, as well as the salary test, in which the employee must earn $455 or more per week. If the employee does any work during a week, the entire week’s salary must be paid. An exception is made if there is a sick or personal leave policy; in that case full (not partial) days of sick or personal time, or days on which the employee does not work because of disability, may be deducted from pay, with personal/sick leave to fill in the gaps if it is available. The employee’s leave balance can also be used to supplement the employer’s “sick” time, days in which there is not enough work.
In other cases there is not enough sick or other leave time to pay for furlough days, or the employer simply cannot afford to keep so many exempt employees on full-time status. Then to furlough an exempt employee in the private sector, the employer has to cut the employee’s pay. In Maryland, employees are entitled to two week’s notice of a salary reduction. And the new pay may not be less than $455 per week. An employer risks losing the exemption when it violates the rules about deductions from pay.
Posted by marykeating on July 30, 2009 under Unemployment compensation |
The federal government announced today that it was sending more relief to the states, in the form of supplements to their unemployment services.
Maryland will receive $1,019,462 to begin a Re-employment and Eligibility Assessment (REA) Initiative. The funding will pay for counseling, assessment, and crafting individual work-search plans for unemployed people whose industries may have dwindled or disappeared.
Posted by marykeating on July 18, 2009 under Unemployment compensation |
Maryland’s unemployment compensation law was designed to tide over people who became involuntarily unemployed. Until recently, the law applied only to formerly full-time employees, and had a limited time period of 20 weeks. The original assumption, that an unemployed worker looking for work should be able to find a new position within a half year is no longer valid.
New legislation changed several aspects of the law, in an attempt to provide some relief from the economic crisis. The original assumption, that an unemployed worker looking for work should be able to find a new position within a few months is no longer valid. Claimants are now eligible to receive their benefits for 33 weeks. The state maximum weekly benefit amount increased to $410, while federal stimulus money added $25 more per week to the benefits. In addition, people receiving unemployment compensation during 2009 pay no taxes on the first $2,400 in benefits.
Part-time workers are now eligible for benefits. Until recently, part-time workers were ignored in the unemployment compensation system.
The State Department of Labor, Licensing & Regulation has a good overview of the logistics of applying for benefits or registering as an employer, here.
An important revision to the unemployment law, effective June 1, 2009, eliminated the right of certain employees to receive both severance pay and unemployment benefits. The former law provided that an employee whose job was abolished and whose severance package did not completely replace the salary and fringe benefits payable at the job could receive both the severance and the unemployment. This provision was useful in negotiating severance packages; adding the provision that a job was abolished could help the employee earn more than the granted severance weeks, and also gave the employee a blame-free excuse for being unemployed. This can be helpful in searching for new employment. Now, severed employees are ineligible for unemployment compensation for the weeks for which severance is payable.
