WASHINGTON (AP) — More Americans requested unemployment benefits last week, but the level remains near historic lows in a positive sign for the job market. THE NUMBERS: Applications for jobless aid jumped […]
[caption id="attachment_229101" align="aligncenter" width="1024"] A fast-tracked bill would increase the unemployment benefit to $450 and would grant Delaware's employers $50 million in relief this year. | DBT PHOTO BY JACOB OWENS[/caption]
DOVER — A bill that would raise unemployment benefits permanently and would temporarily reduce the tax burden on employers has passed the House, apparently fast-tracked to get to Gov. John Carney’s desk by the end of the month.House Bill 49, sponsored by Rep. Ed Osienski (D-Newark), would raise the maximum unemployment benefit from $400 to $450 a week, with a sliding scale that starts at a $20 minimum. This is the second time in five years that the unemployment rate increase has been floated; Carney signed an increase from $330 a week in 2019.Furthermore, the bill proposed to lower the tax to fund the benefit that the 34,388 employers in the state pay for one year. If passed, it would equate $50 million in tax reduction for employers for the year. Delaware Department of Laborofficials told legislators that this would be a stop-gap measure until the department revamps the state’s Unemployment Trust Fund methodology in the near future.“We want to get this done, through both chambers and on the governor’s desk by the end of January. We want to make sure that the employers are getting the tax assessment decrease, retroactive by Jan. 1,” Osienski said during Tuesday’s House Labor Committee hearing.
The bill passed the House, 39-0, with two representatives absent.
While Delaware, much like the rest of the nation, saw unprecedented unemployment in the early weeks of the COVID-19 pandemic, Carney allocated federal relief funding to ensure the unemployment trust remained solvent. As a result, the trust has roughly $399 million for pay-outs, while federal guidelines suggest a solvency minimum of $270 million.In Delaware, the unemployment tax is assessed based on the benefit wage ratio, or the total amount of wages paid in the base periods of employees who drew benefits over the previous three years divided by the total payroll. Delaware is one of two states that use this system, and the state has 79 variables to determine benefit wage ratio, with the tax maxing out at 8.2%.HB 49 would temporarily reduce that calculation to include nine variables, with a 5.6% max tax.In 2022, there were 16,000 employers who paid 0.3% and 10,730 employers who paid between 0.4% and 0.56%. Under the proposed changes, that would be 35,000 employers slated to pay 0.3% and 846 employers to pay between 0.4% and 0.56% in the tax.Darryl Scott, director for the Delaware Division of Unemployment Insurance, told the House Labor Committee that his department is working on a longer-term proposal on these variables, ideally in 2024.“Key variables for us will be where’s the [Unemployment] Trust Fund balance when we get to September, and also how the economy looks,” he said. “We’re closely monitoring the changes in the economy and the job market.”The Labor Department anticipates $5 billion in wages paid, which would mean that the Unemployment Trust Fund would collect between $75 million and $80 million this year, Scott added. If HB49 and its related variable changes pass, the trust would collect between $20 million to $25 million.In terms of the unemployment benefit, the state estimates that there are slightly fewer people claiming benefits today than March 2020, before the pandemic. Last week, roughly 4,000 people claimed benefits. Before COVID-19 upended the job market, 4,600 people collected benefits.Unemployment benefits, if HB49 is passed, in 2023 would cost $1.9 million and $2.2 million in 2024 and 2025.Delaware ranks as one of the lowest in terms of its maximum unemployment benefit. Pennsylvania offers $605 weekly benefits, while New Jersey offers $830 as of this year. Maryland offers $403 in maximum benefit.The proposed $450 unemployment benefit would be 56% of the weekly wages of a worker who earns at least $41,000. During the third quarter of 2022, the average weekly benefit amount out-of-work Delawareans received was $292.