West Virginia Legislature completes action on unemployment bill

Del. Larry Kump, R-Berkeley, speaks on the House floor on Saturday, March 9, 2024 in Charleston, W.Va. (Perry Bennett | West Virginia Legislative Photography)

With hours to spare on the last night of the West Virginia Legislature’s 60-day session, the House of Delegates approved an amended version of a Senate bill that changes the structure of the state’s unemployment benefit program.

Delegates passed Senate Bill 841 with a 66 to 31 vote late on a day with a number of closed-door meetings of House and Senate leadership.

As the bill passed in the Senate late last month, it would have reduced the duration of unemployment benefits from 26 to 24 weeks. The amount of those benefits would have started at 70 percent of a worker’s weekly wage and then been reduced 5% each four-week period after that, through the sixth four-week period, when workers would receive 45% of their average weekly wage.

The House on Saturday night passed an amended version of the bill, which caps the amount employers will pay into the unemployment fund at the first $9,500 of an employee’s wage.

The amended version keeps a requirement that unemployment benefit recipients do at least four work search activities per week and locks the amount of benefits as they are, with a maximum benefit rate of $662 per week.

It keeps the duration of benefits at the current 26 weeks and allows recipients to work part time up to the amount of their benefits.

The bill is effective July 1, 2024.

The bill that completed legislation Saturday was one of several versions of legislation that advanced in the Senate Finance Committee on Feb. 24. As it was introduced, the legislation would have tied the duration of unemployment benefits to the unemployment rate, an approach known as indexing.

Sean O’Leary, senior analyst for the West Virginia Center on Budget and Policy, said by locking the benefits, they lose value every year.

“This does little to help the trust fund, but hurts future workers at their most vulnerable,” O’Leary said. “The work search requirements are also burdensome and ignore regional variations in the economy. It’s much easier to find a job in some counties than others.”

Speaking against the bill Saturday, Del. John Williams, D-Monongalia, said it was the worst iteration of the legislation that had been proposed.

“I’m afraid that in the short term, there’s a short-term carrot,” Williams said. “We’re going to keep benefits the same. We’re going to keep the amount of weeks the same, but we aren’t going to be increasing with inflation.”

Across the state code, Williams said, there are efforts to tie employee benefits to the consumer price index because someone’s buying power should be the same 10 years from now as it is now, he said.

Williams said he doesn’t have confidence in the Legislature to come in and adjust the unemployment benefits for inflation down the road.

“We pass flat budget after flat budget after flat budget, ignoring inflation, and with this issue, when it comes … to unemployment, I think we’ll do the same and tell people ‘well go kick rocks,’” Williams said. “That’s what I’m afraid of. We are hamstringing people who are at the worst time of their lives. And they might not feel it now, and maybe the passage of this bill won’t get a whole lot of attention because it doesn’t change things now, but by God, there’s going to be a mess on our hands in less than 10 years once inflation takes its toll.”

Proponents of reforming the unemployment system have argued for the need to stabilize the state’s unemployment fund.

After introducing a previous version before the Senate , Sen. Eric Nelson, R-Kanawha,  explained that in 2009, the last time that lawmakers had issues with the unemployment compensation fund, lawmakers put in triggers for when the fund reached $220 million that changed the employer contribution and the employee benefit. In 2021, in response to the COVID-19 pandemic, about $600 million went into the fund, putting the fund over the amount that changed the employer contribution and employee benefit.

According to Workforce West Virginia , the state’s unemployment rate was 4.7% in January.

A study by John Deskins, director of the Bureau of Business and Economic Research at West Virginia University, found that the state’s unemployment trust fund would be exhausted in 22 months during a severe recession with an unemployment rate of 10%.

Some opponents of the bill, including Del Kayla Young, D-Kanawha, say they do not believe the trust fund has a problem.

The bill has also been criticized for coming soon after two large employers — Cleveland-Cliffs mill in Weirton and Allegheny Wood Products in Grant County — announced closures, laying off hundreds of workers.

“If you can’t tell, I really don’t like this bill at all,” Young said. “I don’t think we have a problem. I don’t think we should be cutting unemployment. We’ve had two really large employers close very recently, about 2,000 people recently out of work.”

Del. Larry Kump, R-Berkeley, told fellow lawmakers that after “so many iterations” of the bill, his understanding of the legislation “is so much underwater that I feel like I’m swimming with the fishes.” Kump said his concern as he watched the legislation was the state’s workforce participation rate, something he argued the bill would not fix.

Kump voted for the bill to pass even after saying it “stinks.”

“Nevertheless, and for the short term, while this legislation does not do much, I don’t think in the short term it does much or any harm, but it might do a little good,” Kump said. “So I’m going to hold my nose, and tremble and vote yes.”

In a written statement Saturday night, AFL-CIO president Josh Sword said the bill was passed using “bullying tactics” including “holding hostage” pay increases for state employees. He argued that the state’s unemployment rate fund is healthy.

“It’s disturbing that people who are supposed to be leading the Legislature with the goal of helping improve West Virginians’ lives would instead spend all their time and energy on hurting working people,” Sword said.

“This bill was pushed through in the last hour of the 60-day legislative session, after weeks of strong-arm attempts to find support among delegates for other versions to no avail,” he said. “When the majority of House members finally caved to the need to pass other important legislation the Senate was spitefully refusing to act on, members voted on a last-minute version that clearly the vast majority of members had no understanding of. It was a complete farce.

“The state unemployment fund, which is healthier than it’s ever been, exists to help any one of us who suddenly find ourselves out of a job. Every citizen of this state should think long and hard about why those in the legislative leadership want to cut down that safety net,” he said.

The bill awaited final approval by Gov. Jim Justice Saturday night.

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