Alabama Department of Workforce

The Alabama Department Of Labor
“News You Can Use”
“Enhancement” Legislation

The Alabama Department of Labor Is On Track To Extend The “Enhancement” Legislation

This program began in 1989 and has been a success. Employers pay two unemployment taxes. One tax is paid to the Federal Government. That money is returned to the state is the form of grants.

• These grants which are less than ½ of our employers pay, are used to pay administrative costs of Employment Security, such as payroll, travel, rent, utilities, etc.
• The other UC tax is paid directly to Alabama Department of Labor and is deposited into the Trust Fund to pay UC benefits. The Enhancement legislation is a means to divert .06% of the UC taxes into a special fund to operate the Claimant Assistance Program.
• The CAP allows ES personnel to focus on unemployed workers who are drawing UC benefits out of the Trust Fund and put them to work.
• This does several positive things, first, it puts people back to work, which is of course a good thing. This person becomes productive, pays taxes and stops drawing money out of the Trust Fund.
• The Enhancement money finances approx. 170 positions in Alabama Department of Labor. Of those total positions, 113 are in the ES, 35 in UC and the rest in support positions.
• The legislation has an expiration or “sunset” date of March 31, 2004. That is the date the assessment on employers ends and we can no longer collect this assessment.
• Without this additional funding we are looking at laying off the 170 positions and closing over 20 local offices.
• Who then would be opposed to putting to work in the economic times?
• It's not that anyone is opposed to the concept, but organized labor, AFL-CIO, is using the bill to bargain for a UC benefit increase.
• They take full credit for killing the bill last session.
• It is true that we have the lowest maximum weekly benefit amount at $210 per week, and we would all like to be able to give more to unemployed workers.
• However, generally business and labor work out an agreed upon deal with the Alabama Department of Labor helping. All parties generally receive something they want.
• The timing has not been right for a benefit increase. Business was unsure about the tax package, the economy, and not in the mood for a benefit increase. Also, we have projected the employers will go into schedule “D” in 2005.
• We have already started talks with several different groups to see if we can put together some sort of deal. We have met with legislators, labor and some business people to come together on a agreed upon bill.
• We will not give up and have until the 2004 Regular Session which begins in February 2004 to bring the parties together.
• The benefits from the Enhancement legislation are tremendous to all parties involved and the savings to the Trust Fund substantial. The loss of this legislation would have a devastating effect not only on this department, but also on unemployed workers and employers.