SS#2 SS SCS SB 2 -- EMPLOYMENT SECURITY

SPONSOR:  Russell (Smith, 118)

COMMITTEE ACTION:  Voted "do pass" by the Committee on Workforce
Development and Workplace Safety by a vote of 9 to 7.

This substitute makes several changes to the law concerning
employment security.  The substitute:

(1)  Requires the Division of Employment Security to cross-check
unemployment compensation recipients against the federal new hire
database monthly;

(2)  Increases the taxable wage base to $8,000 for calendar year
2003 and bases the taxable wage base on the previous year's
balance in the Unemployment Compensation Trust Fund.  If the
balance is $350 million or less, then the wage base will increase
by $1,000; if the balance is $500 million or more, then the wage
base will decrease by $500;

(3)  In the event of fund insolvency, freezes the maximum benefit
amount for 24 months after the fund regains solvency;

(4)  Exempts unemployment insurance claimants from the seeking
work requirement if they are participating in a state-approved
drug or alcohol treatment program;

(5)  Makes the one-week waiting period non-compensable at any
time;

(6)  Defines misconduct in connection with work as including acts
of wanton or willful disregard of the employer's interest,
deliberate violation of rules, disregard of standards of
behavior, excessive negligence, wrongful intent, or evil design;

(7)  Requires that if an unemployment insurance claimant has been
discharged due to misconduct in connection with work the claimant
be disqualified from waiting week credit and benefits.  Current
law allows deputies to consider the seriousness of the misconduct
in each case and disqualify claimants for not less than four and
not more than 16 weeks;

(8)  Establishes criteria for an "offer of suitable work";

(9)  Removes the exemption for salaries of elected officials,
severance pay, and termination pay for purposes of calculating
partial unemployment benefits;

(10)  Requires the division to recalculate the contribution rate
of a newly acquired business on the first day of the next
calendar quarter after acquisition instead of as of the date of
acquisition;

(11)  Allows the state to issue bonds to fund unemployment
benefits through the newly created Missouri Commission on
Employment Security Financing and to charge employers an
additional fee to pay the expenses for these bonds; and

(12)  Prohibits the disclosure of confidential information
related to employment security.  Unlawful disclosure is a class D
felony.

The substitute contains an emergency clause.

FISCAL NOTE:  Estimated Net Cost to General Revenue Fund of Less
than $100,000 in FY 2004, FY 2005, and FY 2006.

PROPONENTS:  Supporters say that the bill as it passed the Senate
will bring in $100 million of new employer contributions and $50
million in savings from changes in policy.  The bill will
increase the taxable wage base by $1,000 increments and decrease
it by $500 increments and should return the fund to solvency in
two or three years.  It will also allow the state to issue bonds
instead of borrowing from the federal government to cover
unemployment benefits when the fund is insolvent.

Testifying for the bill were Senators Russell and Loudon;
Missouri Chamber of Commerce; Associated Industries of Missouri;
National Federation of Independent Business; Associated General
Contractors of Missouri; Associated Builders and Contractors;
Missouri Retailers Association; and Missouri Grocers'
Association.

OPPONENTS:  Those who oppose the bill say that it asks employers
for money when they are least able to pay; is a short-term
solution; would exchange long-term debt for short-term debt; and
would still leave the balance at or below zero by 2007.  They
suggest that the taxable wage base be indexed to the average
weekly wage.

Testifying against the bill were St. Louis Area Contractors;
Missouri Laborers; Missouri AFL-CIO; United Steelworkers of
America, District 11; and Carpenters' District Councils of Kansas
City and St. Louis.

Mark Pioli, Legislative Analyst

Missouri House of Representatives
Last Updated July 25, 2003 at 10:13 am