House Business & Consumer Affairs Subcommittee Presented by: Michael Ayers, Chief of Staff, Department of Economic Opportunity Wednesday, October 19, 2011

2 UC Benefit Eligibility  Benefits are determined by the wages paid to a worker from all employment during the “base period”, as defined in s (7), F.S.  Base period is the first four of the last five completed calendar quarters preceding the filing date of the claim.

Base Period Year Preceding Prior Year Current Year July August Sept Oct Nov Dec Jan Feb Mar April May June July Aug Sept Oct Nov Dec Jan Feb Mar April May June July Aug Sept Oct Nov Dec Base Period Lag Qtr *Claim Filed* Base Period Lag Qtr *Claim Filed* Base Period Lag Qtr *Claim Filed* Base Period Lag Qtr *Claim Filed* 3

4 Calculation of Benefits  To be monetarily eligible a worker must meet the conditions specified in ss (1)(g) and (2), F.S. The individual must:  have worked during at least 2 of the 4 quarters of the base period;  have been paid total wages of at least $3,400 during the base period; and  have base period wages equal to at least 1.5 times the amount of the wages of the quarter in which the earnings were the highest amount.

5 Calculation of Benefits  As provided in s (3), F.S., the weekly benefit amount of the claim is equal to 1/26 th of the worker’s high quarter wages but cannot exceed $275.  The total benefits available are equal to 25% of the total base period wages but cannot exceed $7,150, as provided in s (5), F.S.

Maximum Number of Benefit Weeks  Regular State – 26 weeks*  EUC Tier I – 20 weeks  EUC Tier II – 14 weeks  EUC Tier III – 13 weeks  EUC Tier IV - 6 weeks  EB – 20 weeks TOTAL – 99 weeks * Changes to 23 weeks January 1,

Calculation of Benefits  Depending on the amount of wages paid to the worker during the base period the individual may be eligible for 10 to 26 weeks of benefits.  The benefits can be claimed for weeks of unemployment that occur during the one-year period following the filing date of the claim.  If the individual uses all state entitlement prior to the expiration date of the claim, no additional state benefits can be paid until a new benefit year has been established as provided in s (9), F.S. 7

8 Emergency Unemployment Compensation (EUC)  Individuals that have used all of their entitlement to state benefits can receive Emergency Unemployment Compensation.  EUC program created on June 30,  EUC amended and extended by Congress eight times.  EUC phase-out begins December 31, 2011.

9 Current EUC Eligibility  To enter the EUC program all entitlement to regular state benefits must have ended by the week of December 24,  Those in the EUC program can establish their next tier of eligibility no later than January 1,  Phase out through June 7,  EUC - over $8 billion paid since the program began:  SFY : $1.415 billion  SFY : $3.612 billion  SFY : $2.889 billion  SFY : $ 327 million

10 State Extended Benefits  State Extended Benefits become payable when the worker has used all regular and EUC entitlements.  Full federal funding provided by the American Recovery and Reinvestment Act (ARRA).  In 2009, 2010, and 2011 the Legislature provided necessary statutory changes to make state extended benefits available.  Extended Benefits cannot be paid for a week of unemployment beyond the week of January 7, 2012.

11 State Extended Benefits (cont.)  Payments – began July 3, 2009 retroactive to February 22, 2009  Payments to date – Over $1 billion paid: SFY : $ 491 million SFY : $ 669 million SFY : $ 70 million  Program ends– January 7, 2012

12 Estimated Total Interest Due-- $140.6 million Florida is currently borrowing an average of $61 million per month at an interest rate of % Life-to-Date Advances as of October 5, 2011 Source: Office of Economic & Demographic Research-June 2011 Cumulative Amount $1,664,600,000 Including $1,008,500,000 repaid, total borrowed is more than $2.5 billion All Advances Repaid May 2013

13 UC Trust Fund Taxes Collected – Benefits Paid In 2010, $2.3 billion in Benefits Paid and $1.1 billion in Taxes Collected

14 Annual Number of UC Claims

Project Connect  Following a feasibility study, the Legislature authorized the new system in 2009 (SB 1782).  The system will streamline the methods for filing and processing claims, resolving disputed claims, and detecting and preventing overpayments.  The system will result in reduced operating costs to the DEO.  The concept is based on “work first”. Claimants will access UC claims through Employ Florida. 15

Project Connect (cont.)  After all requirements were documented, contract procured with Deloitte to build system.  Currently in the design phase.  Scheduled to begin development stage by November 1,  Testing will begin in August 2012 with deployment in December  Project is on schedule and within budget. 16

UC Reform (HB 7005)  Amended the meaning of misconduct to include an employee’s actions demonstrating a conscious disregard of a reasonable standard of behavior.  Misconduct can occur regardless of whether it occurred at the workplace or during working hours.  Misconduct includes chronic absenteeism or tardiness, deliberate violation of a state standard or regulation, or violation of employer rule. 17

UC Reform - Eligibility  Claimants must make contact with five prospective employers for work each week or access reemployment services at their local One-Stop.  Before payment can be issued claimants must complete a three-part on-line skills assessment. Results are used by the Regional Workforce Board to develop training for local workforce.  Benefits are denied for any week an employer pays an individual severance pay that exceeds the weekly benefit amount of the claim. 18

UC Reform - Entitlement  For all new claims filed effective January 1, 2012 or later the maximum entitlement on a claim will no longer be 26 weeks.  Maximum benefits for claims filed during a year will be based on the average unemployment rate of the quarter ending September 30 of the prior year.  Starting at 12 weeks the maximum benefits will increase one week for each half-percentage point above 5 percent but cannot exceed 23 weeks. 19

UC Reform - Entitlement (cont.)  When the average unemployment rate in Florida during the third quarter of a year is 10.5 percent or more, 23 weeks of benefits will be the maximum claim.  The total value of a maximum claim will decrease from $7,150 to a range from $3,300 when the unemployment rate is five percent or less, to $6,325 when the unemployment rate is at least 10.5 percent.  The maximum weekly amount remains $

UC Reform - Administration  All initial and continued claims must be filed by Internet.  Individuals who do not have computers in their homes can use computers available at local One- Stop Career Centers or at their local libraries.  Beginning July 1, 2011 no benefits can be paid by paper checks on new claims filed.  All individuals must opt for either DEO’s VISA branded debit card or direct deposit. 21

Questions? Michael Ayers Chief of Staff Florida Department of Economic Opportunity 107 East Madison Street Tallahassee, FL | floridajobs.org 22