This bill makes various changes in the unemployment insurance (UI) law.
Significant provisions include:

Currently, weekly unemployment insurance benefit rates for total
unemployment range from $53 for an employee who earns wages (or certain other
amounts treated as wages) of at least $1,325 during at least one quarter of the
employee's base period (period preceding a claim during which benefit rights accrue)
to $355 for an employee who earns wages (or certain other amounts treated as wages)
of at least $8,875 during any such quarter. This bill adjusts weekly benefit rates for
weeks of unemployment beginning on or after January 4, 2009, to rates ranging from
$54 for an employee who earns wages (or certain other amounts treated as wages)
of at least $1,350 during at least one quarter of the employee's base period to $363
for an employee who earns wages (or certain other amounts treated as wages) of at
least $9,075 during any such quarter.

Currently, an employee is not eligible to begin receiving UI benefits unless he
or she receives or is treated as receiving wages during the employee's base period
(period preceding a claim during which benefit rights accrue) equal to at least 30
times the employee's weekly benefit rate, including wages equal to at least four times
that rate during the quarters in the employee's base period other than the one in
which the employee is paid or treated as having been paid his or her highest wages.

This bill requires instead that an employee receive or be treated as receiving
wages equal to at least 35 times the employee's weekly benefit rate, including wages
equal to at least four times that rate during the quarters in the employee's base
period other than the one in which the employee is paid or is treated as having been
paid his or her highest wages, in order to become eligible to begin receiving UI
benefits.

Currently, if a claimant conceals any material fact relating to his or her
eligibility for benefits or conceals any wages earned in or paid or payable for a given
week, the claimant must forfeit not less than 25 percent nor more than 400 percent
of the claimant's weekly benefit rate for the week for which the claim is made for an
act of concealment that results in no overpayment or an overpayment of less than 50
percent of the claimant's weekly benefit rate; and not less than 100 percent nor more
than 400 percent of the claimant's weekly benefit rate for the week in which the claim

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is made for an act of concealment that results in an overpayment of at least 50
percent of the claimant's weekly benefit rate. Currently, if a claimant is partially
unemployed in a given week, the claimant may be eligible to receive benefits for that
week under a formula that takes into account the amount of wages or certain other
benefits that the claimant receives for that week. Currently, if an employer aids and
abets a claimant in committing an act of concealment, the employer may be required
to forfeit an amount equal to the amount of benefits that the claimant improperly
received as a result of the concealment.

This bill provides that if a claimant conceals any material fact relating to his
or her eligibility for benefits or conceals any wages earned in or paid or payable for
a given week, the claimant is subject to graduated monetary penalties that increase
in severity with the number of determinations of concealment by the claimant. The
bill also provides that if a claimant conceals any wages for a given week, the claimant
is ineligible to receive any benefits for that week. In addition, the bill provides that
if an employer aids and abets or attempts to aid and abet a claimant in committing
an act of concealment, the employer is subject to graduated monetary penalties that
increase in severity with the number of determinations of aiding or abetting or
attempted aiding or abetting by the employer.

Currently, with certain exceptions, a claimant is eligible for benefits for any
week in which the claimant earns no wages only if the claimant is able to work and
available for work during that week. If a claimant's work is suspended by the
claimant or by his or her employer or the claimant is terminated by his or her
employer because the claimant is unable to perform or unavailable for some of his
or her work or if a claimant takes a leave of absence for a portion of a week, the
claimant may be eligible for some benefits for that week under a statutory benefit
reduction formula. Currently, a claimant remains eligible for benefits while the
claimant is enrolled in certain employment-related training.

This bill provides that if a claimant is absent from work with a current employer
for 16 hours or less in a given week (including the first week of an absence resulting
from a leave of absence, or the week in which a suspension or termination occurs)
because the claimant was unable to work or unavailable for work, the claimant may
be eligible for some benefits for that week under the benefit reduction formula.
However, if a claimant is absent from work with a current employer for any of these
reasons for more than 16 hours in a given week, the claimant is ineligible for any
benefits for that week. Under the bill, a claimant remains eligible for benefits while
the claimant is enrolled in certain employment-related training.

Currently, most employers that engage individuals in employment that is
covered under the UI law must pay regular quarterly contributions (taxes) to DWD
based on a percentage of the taxable wage base. Currently, the taxable wage base
for any year consists of the first $10,500 of wages paid by an employer to an
individual engaged in covered employment.

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This bill increases the amount of these wages that is subject to a contribution
requirement to $12,000 for calendar years 2009 and 2010, $13,000 for calendar years
2011 and 2012, and $14,000 for calendar year 2013 and thereafter.

Currently, the total contributions payable by each employer are the sum of the
employer's contribution rate and solvency rate, each of which vary with the
employment stability of the employer and the solvency of the unemployment reserve
fund, from which benefits are paid. An employer's contributions payable as a result
of its contribution rate are credited to the employer's account, while an employer's
contributions payable as a result of its solvency rate are credited to the fund's
balancing account, which is used to finance those benefits that are not payable from
any employer's account.

This bill generally decreases the contribution rates of employers that do not
have a negative balance in their accounts by two-tenths of one percent and decreases
the contribution rates of employers that have a negative balance in their accounts
by four-tenths of one percent. The bill also increases the solvency rates of employers
that do not have a negative balance in their accounts by two-tenths of one percent
and increases the solvency rates of employers that have a negative balance in their
accounts by four-tenths of one percent. The changes are effective beginning in 2009.

Currently, an employer that has a first quarter contribution liability of at least
$5,000 and that is not delinquent in making its contribution payments or in paying
any interest, penalties, or fees assessed against the employer for UI purposes may
defer up to 60 percent of the employer's contribution liability for the first quarter of
the year in which liability accrues (otherwise payable by April 30) without payment
of interest, if the employer pays at least 30 percent of that liability by the following
July 31, an additional 20 percent of that liability by the following October 31, and any
remaining liability by the following January 31. If an employer fails to make a
deferred payment when due, the employer must pay interest on all contribution
liability for the calendar year in which the liability accrues retroactive to April 30 of
that year.

This bill permits a qualified employer that has a first quarter contribution
liability of at least $1,000 to defer payment of its first quarter contributions and
requires any employer that elects to defer payment of its first quarter contributions
to file its election electronically and to file its quarterly employment and wage
reports with DWD electronically in the manner and form prescribed by DWD. Under
the bill, if an employer fails to comply with the electronic reporting requirement, the
employer is subject to the same requirement to pay interest retroactively that applies
currently to late payments.

Currently, each employer that is subject to a contribution requirement must
pay an annual special assessment for each year prior to 2008 in an amount that may
not exceed the lesser of 0.01 percent of the employer's annual taxable payroll for UI
purposes or the employer's solvency contribution for that year for the purpose of
financing the renovation and modernization of the unemployment insurance tax and

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accounting system. The Department of Workforce Development (DWD) must reduce
the solvency contribution rate that an employer must pay in each year prior to 2008
by the special assessment rate applicable to that employer for that year. (The
solvency contribution rate is the portion of an employer's rate that is used to
maintain the solvency of the unemployment reserve fund.) This bill makes the
special assessment requirement and solvency contribution rate offset applicable to
calendar years 2008 and 2009.

Currently, with certain exceptions, each employer that has employees who are
engaged in employment covered by the unemployment insurance law must file
quarterly contribution (tax) and employment and wage reports and make quarterly
payment of its contributions to DWD. An employer of 50 or more employees or an
employer agent that files reports on behalf of any employer must file its reports
electronically. Currently, there is no requirement or procedure established by law
for making electronic payments of contributions.

This bill phases in electronic reporting requirements for additional employers
with 25 or more employees. The bill also permits DWD to require an employer or
employer agent that files its employment and wage reports electronically, in lieu of
filing contribution reports, to determine the amount of contributions due for
payment by the employer electronically in the manner and form prescribed by DWD.
The employer or employer agent must then pay the amount due for each quarter by
the same due date that is currently prescribed by law. Effective in 2009, the bill also
requires each employer that makes contributions for any 12-month period ending
on June 30 equal to a total of at least $10,000 to make all contribution payments
electronically in the following year. In addition, the bill requires every employer
agent to make contribution payments electronically by the same date.

Currently, contribution payments must be received by DWD by the due date or
if mailed must be postmarked by their due date or received within three days of their
due date. This bill requires all contribution payments to be received by DWD by their
due date.

Currently, with limited exceptions, if benefits are erroneously paid because an
employer fails to provide correct and complete information on a report to DWD, any
corrective action by DWD based upon later receipt of correct and complete
information does not affect charges to the employer's account for the cost of benefits
paid as a result of the failure. In addition, prior to June 29, 2008, if benefits are
erroneously paid because an employer fails to provide correct and complete
information requested by DWD during a fact-finding investigation, but the
employer later provides the requested information, then charges to the employer's
account for the cost of benefits paid before the end of the week in which a
redetermination or a decision of an appeal tribunal (hearing examiner) is issued
regarding the matter are not affected by the redetermination or decision unless an
appeal tribunal, the labor and industry review commission, or a court finds that the
employer had good cause for failing to provide the information. This bill extends the

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current treatment by DWD of benefits erroneously paid indefinitely and also
provides that if an employer fails to provide complete and correct information
requested by DWD during a fact-finding investigation, then benefits paid before the
end of the week in which a redetermination or decision is issued are not affected by
a redetermination or decision (notwithstanding any eligibility issue) unless an
appeal tribunal, the commission, or a court finds that the employer had good cause
for failing to provide the information. The changes are effective on the first Sunday
after publication of the law resulting from enactment of the bill.

Currently, with the exception of reports by certain experts, a departmental
record relating to a benefit claim that contains uncorroborated hearsay and that is
offered as evidence before an appeal tribunal (hearing examiner) may require
testimony or other authentication to substantiate the information contained in the
record before it may be used as evidence that an employer provided or failed to
provide complete and correct information to DWD during a fact finding
investigation. This bill provides that any such record relating to or submitted by an
employer, if created in the regular course of a fact-finding investigation, constitutes
prima facie evidence, and shall be admissible for the sole purpose of proving that an
employer provided or failed to provide to DWD complete and correct information in
a fact-finding investigation of the claim, notwithstanding that the record may
contain uncorroborated hearsay, and may be used as the sole basis upon which the
issue of the employer's failure is decided, if the parties appearing at the hearing
before the tribunal are given an opportunity to review the record at or before the
hearing and to rebut the information contained in the record. Under the bill, such
a record requires no authenticating testimony or other evidence for the record to be
admitted in evidence, unless the circumstances affirmatively indicate a lack of
trustworthiness. If appropriate, the record may then be regarded on appeal as
sufficient without further substantiation to sustain the decision of the appeal
tribunal.

Currently, with certain exceptions, the wages accruing to an individual that are
used to compute the total benefits payable to the individual may not exceed ten times
the individual's weekly benefit rate based solely on employment by a corporation,
partnership, or limited liability company that is treated as a corporation or
partnership for UI purposes in which the individual or a family member owns or
controls a significant interest. Under current law, a "family member" includes a
child. The benefit or limitation does not apply if the individual is employed in a
family-owned business and there is an involuntary cessation of the business under
certain circumstances. This bill excludes a child from the benefit limitation, thereby
potentially making the parent of a child who, with other family members, owns a
significant interest in the business by which the parent is employed eligible for
benefits on the same basis as other employees of other employers. Under the bill, the
limitation still applies to a claimant who is parent if the claimant has at least
one-fourth ownership interest in a family business from which the claimant's
employment is terminated.

Currently, the federal government provides regular grants to this state for the
purpose of financing the cost of administration of the UI program. In addition,the
federal government provides special grants to this state that may be used for the
purpose of administration of UI, for the payment of UI benefits, or for certain other
purposes. Previously, the first $3,289,107 of the moneys in a special grant for federal
fiscal year 2002 was appropriated for UI administration. The authority to expand
moneys from this appropriation expired on October 1, 2007. This bill permits an
additional $1,000,000 of the moneys received in the special grant for federal fiscal
year 2002 to be used for UI administration. The bill also permits another $1,000,000
of the moneys received by this state in a special federal grant for federal fiscal year
2002 to be expended for the same purpose on or after October 1, 2008. Under the bill,
none of these moneys may be encumbered or expended after September 30, 2009.
The expenditure authorizations potentially increase the liability of employers to
finance UI benefits through contributions (taxes).

The bill directs the Council on Unemployment Insurance to appoint a
committee to conduct a study of the definition of "employee" in the unemployment
insurance law and report its recommendations to the Council on Unemployment
Insurance by June 30, 2009. The definition affects benefit eligibility as well as the
amount of benefits that an individual may receive, and also affects the contributions
or reimbursements that an employer is required to make.