While Pennsylvania's unemployment compensation reform may save the state well over $250 million per year, the recent amendments are causing some dismay among seasonal workers. Under Act 60, Pennsylvania's unemployment compensation reform legislation, workers who make 50.5 percent or more of their annual income in one quarter (down from the previous threshold of 63 percent) are no longer eligible for benefits. The law went into effect on January 1, 2013.
Act 60 allows for the issuance of bonds to repay the state's $4 billion federal debt, which stems from recession-era borrowing to continue unemployment compensation payments. Under current law, the maximum weekly benefit is frozen at $573 until 2019. Act 60 increases the taxable wage base from $8,000 to $10,000 in an incremental manner through 2018, and lowers the State Adjustment Factor. Supporters of the reforms have stated that the changes affect less than 10 percent of all workers, while reaping a significant savings for the state.
However, since the law went into effect a number of Pennsylvania seasonal workers have discovered they no longer qualify for benefits in the off season. Given the region's many golf courses, amusement parks and ski resorts, those working in the recreation and tourism industry have been affected by the reforms. Workers in the construction industry may be significantly affected as well.
In managing seasonal employees, employers should ensure that seasonal work engagements and any changes in compensation are clearly defined and communicated to their workers. Employers should comply with all state posting requirements regarding unemployment compensation. Finally, employers should stay abreast of any changes to state unemployment compensation laws, including fluctuations in surcharges or increases in the taxable wage base.