Friday’s editorial applauds the compromise reached in the legislature on reducing soaring unemployment insurance bills:
Seasonal workers on the Grand Strand could be in for a surprise next year.
As the legislature quickly headed toward the end of its regular session this week, a compromise bill on unemployment benefits passed on Wednesday containing a new restriction on unemployment benefits for those who work for seasonal businesses. The change comes with a number of others that should ease the draconian increases in unemployment insurance rates that surprised businesses following last year’s reform of the state’s ill-fated Employment Security Commission.
That reform, which dissolved the ESC and created the new Department of Employment and Workforce, followed the digging of a $900 million financial pit by the overseers of the state’s unemployment trust fund. In order to pay back that money to the federal government, the legislature opted to raise rates on employers, deciding fairly that it made sense to raise rates the most on those employers whose workers claimed more in unemployment benefits. That method has meant skyrocketing bills for many businesses in our area – particularly seasonal businesses that lay off many workers each year.
Republican Sen. Ray Cleary of Murrells Inlet has been involved in the changes since the beginning, and said the legislature has done the best it could with the options available to it. “We actually fixed the problem last year,” he said, “but because the hole was so deep to kind of fix it and pay the federal government back, it put an extreme burden on employers.”
The measures passed by the General Assembly should ease some of that burden. On one hand, rates will be lowered. The Senate version of the budget aimed $100 million in unexpected revenue at the problem, which is expected to lower rates across the board by up to 20 percent, according to Cleary.
Stephen Greene, president of the Myrtle Beach Area Hospitality Association, who told us in April that about 85 percent of the businesses in his group had been affected, was pleased at the prospect of lower bills.
“Obviously that would have an impact on the short term,” Greene said. But he also looked forward to the more lasting rule changes passed. “On the long-term, all the bills that I’ve seen have a seasonal exemption clause. … That might give flexibility to a lot of these businesses.“
The clause Greene refers to offers a reasonable middle ground between offering no unemployment to seasonal workers – the stance the governor had proposed – and the current practice of offering unemployment benefits to all seasonal workers.
Instead of either extreme, workers in seasonal businesses – which would have to apply specifically to be labeled as such – would be eligible for unemployment benefits, but only in their season. Cleary explained it as following: “If the job is a June to September job, if they get fired or terminated in July they can get benefits until September, but no longer. … The seasonal businesses can actually operate without fear of hiring persons for three months and paying them for 12 months.”
The change is a fair compromise, and could even save jobs. The increased unemployment bills – rising by tens of thousands of dollars in some cases – had put businesses in a tough situation. Some of those rates will still likely be higher than they were two years ago, but the recent changes will ease some of that pain. And in the long run, Cleary said, the seasonal change is “going to save tens of millions of dollars a year.”
The state’s unemployment system still has issues, and still needs some changes, particularly when it comes to certifying who’s eligible to receive benefits, but this is a good start for this year. As Greene said, “any relief is a welcome sign.”