Ohio

Ohio Unemployment Comp System in Jeopardy

By Cleveland Law Library

An article from the Columbus Dispatch reports that funding for Ohio's unemployment compensation system is in jeopardy. This comes on the heels of a recent 13-week extension of benefits under the Emergency Unemployment Compensation Act of 2008. (See our prior blog post.) According to Solvency Recommendations prepared by The Urban Institute of Washington, D.C., Ohio's unemployment fund is in jeopardy of going broke if changes are not made soon to  increase the tax base upon which employers pay unemployment comp. premiums, freeze employee pay-outs, or both. Currently, contributing employers (i.e., those who are not self-insured) pay a percentage premium based on the first $9,000 of each employee's pay, but the recommendations suggest increasing this base by up to $3,000 per person. Calculations estimate raising the base to $11,000 per employee would raise $200 million by December of 2009. A fact of which I was astounded is that the unemployment comp. fund currently pays out about $100 million each month to out-of-work Ohioans. With jobless rates so high, the fund could be stretched even further next year. Other recommendations from the report suggest decreasing benefits, eliminating dependents' benefits, or borrowing from and having to repay the federal government. The article concludes by suggesting that a combination of measures that affect both employees and employers might have to be employed.

Full post as published by Cleveland Law Library Weblog on July 15, 2008 (boomark / email).