Unemployment Reforms Bear Fruit Officials Say

Thursday, September 5, 2013

Lt. Governor Ron Ramsey (R-Blountville) on Thursday announced that a rise in the state’s unemployment trust fund has triggered a considerable tax cut for employers across Tennessee.

Reforms championed by Lt. Governor Ramsey and sponsored by Senator Jack Johnson (R-Franklin) have eliminated waste, fraud and abuse in the system resulting in substantial trust fund savings.

“As I’ve traveled across Tennessee working with job creators to make Tennessee the best place to own and operate a business, employers always told me the same thing: reform our unemployment system,” said Lt.
Governor Ramsey. “The General Assembly answered that call by passing many cost-saving reforms over the past few years. Today, job creators start seeing the results of our actions in their bottom line through cuts in their unemployment taxes.”

Tennessee’s unemployment fund balance rose to over $800 million surpassing the benchmark of $650 million which triggers the elimination of the 0.6% surcharge instituted in 2009 and lowers the tax rate overall for all employers in the system.

“This is truly outstanding news,” said Senator Johnson. “It is fantastic to see our reforms provide a significant tax cut for job creators. Every dollar saved in reduced unemployment tax is a dollar that can be used to expand existing businesses and hire more workers. These reforms clearly benefit not only the job creator but the job seeker as well.”

The General Assembly passed two reforms in the last few years that played a direct role in increasing the trust fund.

The Unemployment Insurance Accountability Act of 2012 (Public Chapter 1050) strengthened the definition of employee misconduct to ensure that those who have been fired for cause no longer receive benefits. The act also enacted new work search requirements for unemployment beneficiaries and provided for random audits to ensure the integrity of beneficiaries' job searches.

Public Chapter 427 (passed in 2013) updated the unemployment misconduct definition to include conduct constituting a criminal offense for which the claimant has been convicted or charged. Additionally, the chapter mandates departmental training of unemployment hearing officers as well as increasing weekly audits from 1,000 to 1,500. 

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