Kentucky’s unemployment system is rebuilding itself after being drained throughout the COVID-19 pandemic. Going forward, cabinet officials and the business community are focused on the changes that need to be made to ensure stability.
At a meeting of the Unemployment Insurance Reform Task Force on Thursday, Kentucky Chamber Senior Vice President of Public Affairs Kate Shanks said the Insurance Trust Fund Kentucky’s unemployment (UI) had returned to about half of its pre-pandemic level. During the pandemic, benefits paid exceeded the reserve by more than $ 600 million and forced the state to take out a loan of $ 500 million to meet its obligations. While the General Assembly allocated federal funds to repay the loan, the trust fund balance has not returned to pre-pandemic levels.
Important steps were taken during the 2021 legislative session to address the unfolding crisis in the unemployment insurance system, but Shanks stressed that there are still many improvements to be made.
Kentucky House recommendations on this front include:
- Provide additional funds to the Unemployment Insurance Trust Fund to ensure the balance returns to pre-pandemic level. This will reduce the time it takes to achieve trust fund adequacy according to the U.S. Department of Labor, a status Kentucky has not experienced since the 1970s.
- Improve Unemployment Insurance Tax Framework As Kentucky Is Currently Ranked 49e in this area
- Go from one “job contact” per week for job search needs to five “job search activities” per week, which are broadly defined to include job applications, interviews, job fairs. employment, etc. to align Kentucky more with other states
- Revise the definition of suitable work which could apply more broadly as someone has been on benefits for a long time
- Consider the job referral programs used in states like South Carolina where applicants are matched with jobs in their area that match their skills and the state emails applicants weekly with those jobs.
- Update the portal where employers can notify the firm when someone fails to complete a job search activity or accept a position
- Strengthen and increase requirements audits
A strong unemployment system is critical as employers statewide struggle to find the workers they need to fill their positions and Kentucky lags the country by at least 4 percentage points in terms of labor participation. job market, Shanks said, pointing to research from the Kentucky Chamber Foundation’s new report on the workforce crisis.
To begin to address this issue, she pointed to the Kentucky Talent Hub, a dynamic platform recently launched by the Kentucky Chamber Foundation that is searchable and employers and job seekers can create profiles and find opportunities across many industries. .
Shanks said the House continues to support many of the same pieces of legislation to improve the system that has been introduced into the legislative process in previous years and will work directly with the General Assembly on these new recommendations.
Representatives from the Kentucky Labor Office also testified before the group about the new technological system they are seeking to put in place.
Kentucky Office of Unemployment executive director Buddy Hoskinson said the request for proposal for the replacement computer system for the Unemployment Insurance system was recently closed and these are currently under review. Once a vendor is selected, the firm said development and implementation of the new IT system would take around 18-24 months and in the meantime it said work was underway to ensure the fraud prevention and more in the current system.
As to why the state needs this improved technology, Morgan Eaves, director of legislative affairs at the Kentucky Labor Office, said the technology in use now is so outdated that the coding system is not even taught anymore, so when something goes wrong they have to try and find retired IT staff to fix the issues.
Regarding other improvements suggested by the firm, Hoskinson said they are considering a short-term compensation package to help companies retain their skilled workforce once they recover from a hardship. problem by allowing reduced hours rather than layoffs that would require legislative change by the legislature.
The work of the Working Group on Unemployment Insurance Reform ends in November.