Work it Out Blog

Unemployment Compensation Bill Avoids Penalties but Makes No Significant Reforms

Jul 13, 2016

On the eve of its summer recess and within the flurry of nearly 50 bills sent to Ohio Governor John Kasich, the General Assembly approved a plan to repay the debt incurred during the Great Recession. Ohio, like numerous other states, lacked reserves to cover the significant uptick in unemployment compensation claims during the recession. To fund the claims, Ohio borrowed a sum from the federal government that at one time exceeded $3 billion. To repay the funds, businesses paid higher unemployment taxes since 2012.

A bill passed May 25, 2016, authorizes the state to pay back the remaining balance of approximately $250 million borrowed by utilizing unclaimed funds held by the Department of Commerce. By so doing, Ohio employers will save approximately $80 per employee in penalties that would have been assessed by the federal government.

While it eliminates the outstanding debt and will save employers millions, the recent legislative action falls short of the overhaul of the unemployment compensation system sought by HB 394 (and discussed in our February 10, 2016 blog). It is expected that a group of senators and representatives will meet throughout the summer to discuss legislation that would significantly reform Ohio’s unemployment compensation system. We will continue to monitor these developments and provide updates.

If you have questions about legal issues related to unemployment compensation, contact Day Ketterer’s employment law attorneys, call 330.455.0173, or email info@dayketterer.com.

The content of this blog is for informational purposes only and is not intended as legal advice for any purpose. This blog is not intended to present an exhaustive summary of all applicable laws, or to take the place of legal advice.  If you have any questions regarding the law, please contact us for assistance.