$42.3 million in annual unemployment comp savings begin in 2020

Starting Jan. 1, 2020, Alabama employers will save an estimated $42.3 million annually under a law that reduces the duration of Alabama’s unemployment payouts while increasing benefits.

Under Act No. 2019 – 204 by Sen. Arthur Orr, R-Decatur, and Rep. Danny Garrett, R-Trussville, the number of weeks Alabama’s jobless could collect unemployment compensation would float between 14 and 20 based on the unemployment rate in the state and other factors.

The new variable compensation could be extended to between 19 and 25 weeks for who those participate in up to five weeks of a state-approved training program.

Currently, if a person loses a job through no fault of their own, they are eligible to apply for up to 26 weeks of unemployment benefits.

Under the new law, in good times, when unemployment is low and jobs are available, the number of weeks someone could be on unemployment would decrease.

The law, which the governor signed May 21, also increases the weekly benefits from $265 to $275.

The decreased weeks and increased benefits would save Alabama employers about $42.3 million annually, according to the law’s fiscal note. The state’s Unemployment Compensation Trust Fund is funded through employer contributions. Since 2010, Alabama employers have been paying taxes into that fund at the highest rate possible. The fund, currently about $624 million, would have to reach $800 million before Alabama employers could move into a lower rate schedule.

This article is part of the Alabama Retail Report, a communication for Alabama Retail Association members. Not a member? Join us!

Reprints or republishing are welcomed but require permission. Contact us for permission.