Both the Administration and Speaker introduce legislation
The Joint Standing Committee on Labor and Housing held a marathon public hearing on Monday, May 3, 2021, on bills proposing significant “reforms” of Maine’s Unemployment Insurance (UI) system. While the committee heard a number of different proposals, the most significant was LD 1571, An Act to Strengthen the Unemployment Insurance System to Better Serve Maine Workers, sponsored by the Speaker of the House, Rep. Ryan Fecteau (D-Biddeford).
The bill represents more than a simple expansion of benefits – although that is also part of the proposal – it also represents a significant shift in the underlying purpose and function of UI. The bill was developed with input from organized labor and various public advocates; however, there was no input from any employer group or business association, including the Maine State Chamber of Commerce. Consequently, while the bill received support from the AFL-CIO and other advocacy groups, it was strongly opposed by the Maine State Chamber and several other business representatives.
As drafted, the bill expands benefits in categories like dependent benefits, while also shifting the filing requirements onto employers of any size, if there are layoffs of more than 25% at the business or a similar reduction in hours. The employer would be required to file all initial claims for the laid off workers based on a time frame developed by the Maine Department of Labor (DOL) through the rulemaking process. Failure to meet this deadline would result in sanctions and fines on the employer.
A centerpiece of the bill is the creation of a “navigator” program modeled after the type found in the Affordable Care Act (ACA). Employers would be required to shoulder the entire cost of the program – initially set at a $3 million assessment – and the program would be designed to assist employees in maneuvering through the system, as well as insuring access to benefits. These navigator grants would be available to any group that might have a “peer relationship” with unemployed individuals and have the capability to carry out the duties of the program. As drafted, the program would only be available to employees, despite the fact that employers are bearing the entire cost.
Finally, the bill proposes a shift in the philosophical underpinnings of the existing UI system. From the beginning, the purpose of UI was to serve as a bridge between jobs should a worker lose their job through no fault of their own. Because the job loss is employer-initiated, the employer bears the burden of financing the assistance to the worker. However, the proposals contained in LD 1571 shift this “bridge” system of benefits to much more of a new, social service safety net – a role the UI system was never designed to fill.
For example, the inability to go to work due to the loss of childcare or transportation would be considered “good cause,” allowing an individual to qualify and receive UI benefits. How long this period of eligibility would last is unclear – and, remember that this is for an individual would still have a job that they just couldn’t get to. The issue of childcare and its availability to workers is a significant societal issue that impacts employees and employers. However, LD 1571 shifts the financial burden onto employers who have no control over their employee’s childcare or transportation issues. Yet, they are being directed to shoulder these costs through the state’s unemployment insurance system and the benefits it provides.
In his testimony opposing LD 1571, Maine State Chamber Executive Vice President Peter Gore urged the committee to consider recommending the formation of a stakeholder group if the legislature was interested in new reforms to the UI system. The last set of reforms were passed by the legislature 20 years ago, a product of two years’ worth of work and negotiations by a large group of stakeholders, including the Maine State Chamber and other members of the business community, along with advocates and the DOL. Much has changed since this time, and changes may be appropriate, but only if all the stakeholders – including Maine employers, the single largest financial contributor to the state trust fund – have a seat at the table.
The public hearing on this and several other UI bills lasted nearly six hours. To date, LD 1571 has not been scheduled for a work session. The Maine State Chamber will be following this important bill closely. For additional information or questions, please contact Peter Gore by calling (207) 623-4568, ext. 107, or by emailing email@example.com.