Louisiana’s unemployment insurance system is supposed to protect workers who lose their job through no fault of their own by providing support to help make ends meet while they look for work or retrain for a new occupation. But Louisiana’s unemployment benefits are notoriously skimpy, with average weekly benefits that are currently the lowest among the 50 states and the District of Columbia.  

In an effort to address this problem, the Legislature is considering a bill (House Bill 657) that would increase the maximum weekly benefit. But this increase would come at a steep price, as unemployment benefits would be capped at 12 weeks, instead of the 26-week maximum in current law. The bill would allow up to eight additional weeks for people participating in an approved training program. 

While weekly benefits are long overdue for an increase, reducing the time that jobless people can receive benefits is a bad trade-off that would impose serious and unnecessary hardships. The Bureau of Labor Statistics reports that 33.5% of American workers unemployed during March 2022 had been without a job for 15 weeks or longer. Americans experiencing unemployment had gone without a job for an average of 24 weeks (or about a month longer than people could get benefits under HB 657, even if they are enrolled in a training program).

To make things even more complicated, HB 657 would change the benefit calculation formula when the state unemployment rate falls below 5.5% over a three month period, with benefits decreasing as the unemployment rate increases. But as the Louisiana Workforce Commission explains in a recent report, this would be a logistical nightmare.

With the change in UI claim duration based on the new measure proposed in the bill, the time needed for effective implementation is extremely problematic. The bill sets the average of each month’s unemployment rate of the third calendar quarter as the measure linked to claim duration. However, in any given year, the unemployment rate for the last month of the third quarter is not available until late November. With the changes proposed by the bill set to take effect every January, five weeks would not be enough time to implement the multiple code changes involved in SB 225.

Put in simpler terms HB 657 prescribes a calendar for determining benefit calculations that is at odds with how the unemployment system works. Additionally, the “extended” benefits provisions would cause their own set of problems:

When an individual files a claim for UI benefits and is approved for benefits, the individual receives a communication from LWC which indicates the benefit year end date and the total amount of funds and weeks available on the claim. If a claimant would want to take advantage of the extended benefit program … the claim would have to be redetermined in order to adjust the available funds and weeks. Since the bill indicates that an eligible claimant would have to be in their last week of the claim and participating in an approved training program to be eligible for these proposed extended benefits, the timing issue could be significant. It is possible that a claimant would be several weeks past the end of an exhausted claim before receiving benefits.

In short – while it may appear generous to extend benefits an “additional” eight weeks (but still six fewer weeks than workers currently qualify for each year they work), this program would likely result in lapses in benefits that could be economically disastrous for workers and their families.

The goal of HB 657 seems to be to ensure that the UI trust fund is not depleted. But its real effect would be to make benefits even more complicated for workers to receive when they have lost a job through no fault of their own. Fortunately, there are better reforms available for legislators’ consideration this session – including two bills, House Bill 308 and House Bill 506, to increase minimum weekly benefits from $10 a week (one of the lowest minimum weekly benefits in the country)

– Jackson Voss, Policy Analyst