ARIZONA STATE SENATE
Phoenix, Arizona
unemployment
insurance; benefits
Purpose
Makes multiple substantive changes to current statute including changing different variables used to compute the wage benefits paid to the unemployed, and altering the amount of work history needed to qualify for benefits.
Background
Unemployment insurance is offered as an economic safety net program to individuals who find themselves, through no fault of their own, out of work for a period of time. In these cases, individuals must meet certain criteria, such as available to work, able to work and registered to work. If qualified to receive benefits, individuals are then given a proportion of their wages from a trust fund funded by employers in the state. Concerns have been expressed that Arizona lags behind other states in the amount of benefits that are paid out to unemployed individuals. S.B. 1208 makes numerous substantive changes to current statute including changing different variables used to compute the wage benefits paid to the unemployed, altering the amount of work history needed to qualify for benefits and changing the requirements regarding a waiting week as being unpaid for the longer-term unemployed.
Currently, wages are counted as anything up to $7,000 per calendar year, unless the amount over is subject to certain federal tax laws. Under S.B. 1208 that amount is increased to $10,000 per calendar year. Amounts in excess are prohibited from being defined as wages unless those amounts are taxable under federal law and are counted as required contributions into the state unemployment fund by employers. This increases the amount of money coming into the trust fund from employers. The Department of Economic Security (DES) estimates that the increase will result in an increase of monies collected for the unemployment trust fund. S.B. 1208 lowers the amount that employees must earn in a single calendar quarter to be eligible for benefits from $1000 to $750.
Currently, the most anyone can receive, as a benefit, is $205 per week. This is the maximum weekly benefit. S.B. 1208 increases the maximum weekly benefit by $95 over a three-year period to $300. The change occurs in three stages and begins retroactively on September 11, 2001 with a $35 increase, followed by a $30 increase on July 1 of 2002 and 2003 respectively.
According to DES, the adjustment of variables, the shifting of dollar amount thresholds and the establishment of new benefits all have no impact on the state general fund. The impact on the unemployment trust fund is unknown at this time.
Provisions
1. Increases from $7000 to $10,000 the base amount of defined wages.
2. Reduces the amount, to $750 from $1000, that an individual must have earned in one calendar quarter of the individual’s base period to be eligible for benefits.
3. Requires an additional $25 per week per dependent for eligible unemployment recipients, up to the maximum weekly benefit allowed by statute.
4. Provides a three-step benefit increase to a $300 maximum weekly benefit, beginning retroactively on September 11, and continuing annually by increasing the maximum weekly benefit by $30 each year.
5. Increases the amount, from $30 to $75, that a benefit recipient may earn per week without experiencing a corresponding reduction in weekly benefits.
6. Changes the definition of “base period” of employment to include the previous 12 months, down from the previous 18 months, for computing the weekly benefit.
7. Stipulates that a person unemployed for three consecutive weeks following the person's waiting week is eligible to receive benefits for that waiting week.
8. Changes the weekly benefit amount from one twenty-fifth to one twenty-fourth of their total wages from insured work for the quarter of the base period where their wages were the highest.
9. Contains a retroactive effective date.
Amendments
Adopted by Committee
· Strikes the repeal of statute addressing seasonal workers' and bus drivers' wages and specified conditions for unemployment benefits.
Senate Action
BI 2/14/02 DPA 4-2-0-0
APPROP 3/12/02 DP 7-3-2-0
Prepared by Senate Staff
March 15, 2002