Kansas Senate Poised to Reduce Benefits Weeks for Unemployed Kansas Workers

Kansas Senate Considers HB2196 as Unemployed Kansas Workers Brace for Fewer Weeks of Benefits

“If you give them more time…they are not going to be sharp,” – Rep. Sean Tarwater

Peggy Bair HeartKC

Unemployed Kansas workers – which include workers who live in other states but are employed in Kansas – will see a reduction of benefit weeks and tighter restrictions on back-to-work requirements beginning April 1, 2021 if the HB2196 passes the Kansas Senate with no changes in its present form.

The bill is up for consideration by the Senate Commerce Committee where hearings were held March 16 and March 17. Often at these hearings – with advance notice, any proponents, opponents and neutral parties may speak to the committee. Written and oral testimony is accepted also.

Kansas State Sen. Rob Olson (R) Dist. 23, is the chair of the committee. The public may contact Sen. Olson – Rob.Olson@senate.ks.gov – with an email comment or opinion about the bill. HB2196 is up for consideration of action by the Senate Commerce Committee the morning of March 23, 2021.

UPDATE – Senate Commerce Committee Meeting about HB2196:

The Chair (Olson) will have the opportunity to either take action on the bill by changing it, not changing it or not taking final action on it. It can be brought to a vote before the Kansas Senate in some final form.

Senate Commerce Committee Hearing March 24, 2021. HB2196 has been brought out of committee and will now be brought out into the Senate floor for further consideration and possible passage in an amended form. There was no mention that I saw of taking out the provision to reduce unemployed benefit weeks:

UPDATE: HB2196 Sub Passes Sentate Chamber vote on 3/30/2021. The bill now goes to Conference Committee because there are still some areas where the parties do not agree – particularly how to handle some federal money that is getting infused into the KDOL Trust Fund. Discussion on the bill on the Senate floor can be heard by going to 1:52:06 to 2:38:52 (hour:minute:second) on the above link.

“There’s more work to do on this bill,” said Senate Commerce Committee Chair, Sen. Rob Olson. Several more amendments were passed but there is still some disagreement over a $450 million deposit of money to be put into the KDOL trust fund over the next year. At least two senators on the Senate Commerce Committee last week had previously disagreed with a negotiated split of $250 million and $200 million tranches and insisted that all $450 million from the federal government COVID-19 funds be put immediately into the KDOL trust fund. These have been increased to two $250 million tranches. That disagreement continued on the Senate floor on Tuesday, March 30.

More debate continued Tuesday, March 30, 2021, on the Senate Chamber floor about points in HB2196.

The main point of contention centered around a federal law about what happens when money goes into the KDOL trust fund. Once it goes in, it can only be used for employers or employees. It can not be removed and used for any other purposes.

Because the fraud audit will not be completed until September, 2021, the actual amount of Kansas state money that was lost to fraudulent claims will not be known until that audit. The initial accountings have varied from $300 million to $600 million with the department of labor disputing the larger number, stating that the department was able to stop the bulk of the fraudulent claims before they were paid out. The KDOL estimate of fraudulent claims was the lower amount.

Because of the rules for trust fund money, it can only be used to transact with employers or unemployed workers.

Deputy Secretary Peter Brady explained: “There’s very specific provisions in federal law related to the employment security trust fund,” he said in the March 24, 2021 Senate Commerce Committee Hearing. “Basically, there’s only two reasons money can come out of that fund: The first is to pay benefits to claimants. The second is to reimburse any employers who may have overpaid into the fund. Outside of those two reasons, there’s no way to pull money out of the employment security trust fund. Once the money is put into the trust fund, it cannot be pulled out.”

“This is why we came to this agreement [splitting the transactions into two tranches], with the proponents of the bill – to make sure that money was still set aside, if needed, but not put us in a position where too much money could have inadvertently gone into the trust fund and not be pulled out later,” Brady said.

On one hand, some senators want to split the amount of money into two tranches – placing a $250 million amount into the KDOL trust fund out of the first batch of $800 million American Rescue Plan money. Then, when the second batch of $800 million from the ARP money comes in 12 months from now, put the second $250 million if needed based on the results of the September, 2021 fraud audit. On the other hand, some senators felt that they wanted the entire $450 million to go into the trust fund out of the initial $800 million.

Those who crafted the bill feel that there are a lot of other programs that need use of the federal money, which is, as was said in the Senate Committee Hearing on the bill – split in tranches of $800 million each, 12 months apart.

With disagreements still hovering, HB2196 will go to conference committee (Conference committee: A committee composed of members from the two houses specifically appointed to reconcile the differences between House and Senate versions of a bill or bills.}

“It’s time to work together,” Olson said. “To get something that works for business, something that works for the claimants, how to deal with the problems to modernize the system – that’s what we’re trying to do.”

Several senators continued to disagree the timing and amount of money to put into the KDOL trust fund.

“This bill’s going to conference. We’ve got more work ahead of us,” Olson said. “The parties on both sides have negotiated on this and looked at it in every fashion.”

Regarding initial fraud audit estimates, Olson reiterated what had already been negotiated before the bill came into the Senate Commerce Committee last week.

“There were $200 million state funds and $400 million federal funds – that’s how you get $600 million,” Olson said, referring to the initial fraud audit.

Several senators were concerned that businesses paying into the trust fund might be hurt by having to make up the cost of the money lost from the fraud losses. Olson countered with pointing out that the federal money was intended for a wide array of needs in the state, that the trust fund distribution was going to happen in two parts and that the point of contention had already been through a long-negotiated process by many involved in creating the bill.

“That trust fund is paid in by businesses, no doubt. But there’s plenty of need for the money [from the American Rescue Plan to states]. We’re going to have an audit September 1st that’s going to tell us how much that we need to back-fund to make business whole. The fund is in pretty good shape [now] with new money coming in for the quarterly pay, a lot less money going out.”

Deputy Secretary Peter Brady said in the March 24, 2021 Senate Committee Hearing that the trust fund is estimated to be holding about $500 million at the present time, better than anticipated.

“I’m trying to fix this. I’m trying to bring the parties together and listen to what the parties need,” Olson said. “This is going to go to conference, there’s going to be more work, there’s going to be more changes. It’s a complicated bill. It’s a large bill. But I don’t want to put $450 million in there and only need three hundred. Because I know there’s a lot of holes in state government where we need to plug that money and it’s going to be needed.”

On March 30, 2021, HB2196 version Amended by Committee as a Whole was accepted by the Senate. The present form of the bill can be read here.

The Supplemental Note on HB2196 – which does some summarizing of the bill – can be read here.

HB2196 was sponsored by the Commerce, Labor and Economic Development Committee, Representative Sean Tarwater, Chair. The 101-page House bill has been put through a number of committee sessions and amendments this past month. It addresses a long-overdue, much-needed overhaul of the Kansas Department of Labor in specifics as well as provisions for unemployed Kansas workers to access benefits.

KDOL, as Kansas Department of Labor is more commonly called among those familiar with the department, continues daily to be crushed under by decades-old computer system crashes and intermittently-working software patches – while tens of thousands of Kansas workers continue to have gone weeks and even months without state and/or federal benefit payments. The bottleneck has caused a domino effect on the Kansas economy as unpaid workers forego rent payments, debt payments, car payments and even food and essentials. HeartKC is aware of several Kansans who are facing eviction or have been evicted and are living in temporary facilities or in a car. Some have had their banks close their accounts due to overdrafts and others have maxed out credit cards to pay rent and utilities.

The KDOL website has explained repeatedly and clearly in graphs and charts that are intended to clarify the issues the agency has faced over the past decade – and the history behind the present bottlenecks in getting money to those deserving of the benefits. The agency not only is attempting to make decades-old computers and software continue to operate far past the system’s active technological lifespan, but it’s also swatting away hundreds of thousands of daily fraudulent claim attempts.

Due to the COVID-19 pandemic, the KDOL offices are closed to the public. ©2021 Photo by Peggy Bair/HeartKC

HB2196 provides for the funding and guidance to revamp the ailing agency but the reality of that is that it will still take two to three years for that overhaul to be completed. The deadline set for most of the overhaul in the bill is December 2022.

In the meantime, the present broken KDOL system has had to inject details of new guidelines for two different federal pandemic relief packages on top of the routine unemployment tasking workload.

The American Rescue Plan, signed on March 11, 2021, provides further extensions of federal relief money for unemployed workers through September 6 for qualifying workers. The guidelines for this latest relief package need to be input into the same crippled KDOL computer system that has been already struggling from overload of claimants suffering job losses and interruptions due to the COVID pandemic. Many workers have yet to be paid completely from the first or second pandemic relief bills.

On top of this, the new HB2196 sets up new demands for the agency to begin implementing April 1, 2021.

The reduction of weeks of unemployment to Kansas workers applies to Kansas unemployment benefits. Federal monies are available to workers who have exhausted their state benefits but also in addition to state benefits, depending on the program involved. However, workers still need to meet eligibility parameters – which have often been as confusing the shifting stairways of Hogwarts.

The number of weeks that unemployed workers are eligible for is dependent on a number called “Unemployment rate” – this number is generally provided by the Bureau of Labor Statistics.

From the Bureau of Labor Statistics, the February unemployment rate for the state of Kansas is set to be released March 26, 2021.

The current unemployment rate in Kansas is shown as “preliminary” for January, 2021 at 3.5% More information about the Kansas Unemployment rate is available on the KDOL website here.

The wording in HB2196 reinstates lower unemployment weeks that were pre-COVID. The way the bill reads is that an unemployment rate of below 5% results in claimants being able to receive 16 weeks of unemployment benefits. An unemployment rate of more than 5 but less than 6%, claimants are allowed up to 20 weeks of state unemployment benefits. An unemployment rate of at least 6% allows for up to 26 weeks of unemployment benefits. With COVID-19, the unemployment benefit weeks were set at 26 weeks. HB2196 is removing that pandemic relief allowing for the 26 weeks – and going back to tying in the number of benefit weeks to the unemployment rate.

Capitol Building in Topeka, KS February 26, 2021 was the site of a small group of protesters who are asking lawmakers to fix the their claims with the Kansas Department of Labor and help them get payment as they struggle to deal with unemployment issues that have resulted from the COVID-19 pandemic. ©2021 Photo by Terry Bair/HeartKC

Again: as stated in HB2196, that is:

“(1) Less than 5%, a claimant shall be eligible for a maximum of 16 weeks of benefits; (2) at at least 5% but less than 6%, a claimant shall be eligible for a maximum of 20 weeks of benefits; (3) at least 6%, a claimant shall be eligible for a maximum of 26 weeks of benefits.”

On March 3, 2021, Representative Stephanie Clayton introduced an amendment to the Tarwater HB2196 asking that the reductions to the unemployment weeks for Kansas workers be struck from the bill.

The discussion during that session on the “Clayton Amendment” is as follows and can be viewed via video clip of that segment of the House session but is is also presented here in written form:

Representative Stephanie Clayton (D) Dist 19 said:

“That requires an additional 14,000 Kansans to be out of work for three months so that an individual may receive about $488 a week for about four weeks,” Clayton said.

Clayton said that she was quoting Senate Commerce Chair Rob Olson (R) who she said told her “In this time right now, this is probably a pretty tough one to keep in” referring to the section reducing benefit weeks to Kansas workers.

Her concern was about the effects of the COVID-19 pandemic’s continued impact on employment and workers – that the workplace issues are not yet completely resolved since the pandemic is not over and the vaccine rollout isn’t even completed yet. Workers have lost their jobs in this crisis through “no fault of their own,” she said.

“I don’t think that an additional $1952 is too much to ask for our hard-working Kansans,” Clayton said. Urging support, Clayton added: “Wise constituents no doubt would respond positively to our compassion.”

Representative Sean Tarwater (R) Dist 27, spoke next in response:

“It is very easy to get a good job,” Tarwater said. “Currently in Kansas, we have 50,000 jobs available and nobody to take them. I would encourage you to defeat this amendment. It is important to get these people back in the workplace sooner rather than later and if you give them more time, it’s just going to draw out the process and they are not going to be sharp.”

In response to Rep. Tarwater, Rep. Jason Probst (D) Dist. 102 spoke in favor of the amendment, highlighting local unemployment rates that differ from the state unemployment rate.

“Tying this to a statewide average does not allow for local realities,” Rep. Jason Probst said. “There are situations in this state where there’s isolated examples of change in employment, change in the employment landscape. Just to name a few, we had the Tyson fire. Years ago, we had a huge snowstorm out west that kind of crippled things for awhile. I think tying the time you can get benefits to a statewide unemployment rate doesn’t allow us enough flexibility to address local conditions.”

House Minority Leader Tom Sawyer (D) Dist 95 agreed, reminding the Chamber that in January last year, as well as subsequent months, there were layoffs announced at Spirit in 2020.

This was a localized hit in Wichita so a lot of people were losing their jobs,” Sawyer said. “They put together a bill to strike that 4.5% unemployment requirement because we needed to keep the workers in Wichita – around Wichita – that lost their jobs.

You have these localized situations where we are tying benefits to a statewide unemployment really doesn’t meet the needs of the people across the state of Kansas.

Last year, when COVID hit, we passed a bill that struck (deleted) that 4.5% requirement and just moved everybody [on unemployment] to 26 weeks. That’s the way most states did it. I think we are still in a crisis situation in Kansas. A lot of people don’t have their jobs. I think we need to show some compassion and help people out as much as possible,” Sawyer added. “This [Clayton] amendment helps that situation a little bit.”

HB2196 brings much needed fixes to the Kansas Department of Labor computer and software systems and structure – at the same time it reduces the number of weeks Kansas workers can qualify for benefits and imposes stricter return-to-work requirements. ©2021 Photo by Peggy Bair/HeartKC

Representative Kristey Williams (R) Dist. 77 reminded the chamber that the Clayton amendment was discussed in committee and was voted down in committee.

“The reason it was voted down,” she said, “is because we wanted to get people back to work as soon as possible. We do not want to go down to 4.5%. I encourage you to not support this amendment.”

Representative Pam Curtis (D) Dist. 32 said she was in favor of the Clayton amendment and spoke:

“I just want to bring this back to what we are talking about,” Curtis said. “We are talking about people who have been reaching out to us in desperation through emails, through phone calls – they’re desperate.

We talk about needing to get people back to work. Absolutely agree.

In Wyandotte County we have over 6000 jobs that are open right now for people to take. Why aren’t they taking them?

Well, I tried to dig into that a little bit. One, they are trying to balance homeschooling their children because schools aren’t open. Two, they are trying to figure out what to do with their children they do go back to work because of little access to quality child care.

There was also the issue in Wyandotte County where Workforce Partnerships was not available for several months for people to even know about the jobs that were available. So, I think this [Clayton amendment] is a very small measure to give people the extra time that they need to balance their life and their work life and their family.

Keep in mind who we’re talking about and be compassionate,” Curtis said. We have to help people. They are reaching out to us for help.

Rod and Debbie Taft have been effected by unemployment and business slowdown. Rod’s health was impacted by COVID-19. Pandemic uncertainty continues even amid a rollout of a vaccine. The couple came up from Andover, KS to attend a Kansans March rally February 26, 2021, at the Capitol in Topeka. ©2021 Photo by Peggy Bair/HeartKC

Representative Clayton’s closing comments were:

Normally extending unemployment benefits one month would seem almost overly indulgent. But given some of the numerous hardships, the balancing and the fact that we have a lot of people who are now underemployed who need to work on time to negotiate salaries that continue to keep their families in prosperity as opposed to doing worse than they are – I do think that giving them this additional time is a move not only of compassion but of common sense.

Because we want our constituents not only to be employed but to be employed in the best jobs possible for them to run their households and their families.Clayton said.

The Clayton Amendment failed.

A roster of Kansas State Senators is available online.

Kansas constituents may find their state senators and representatives by going to Kansas State Legislature website and typing in one’s information in the menu on the left that reads: Find Your Legislator.

A summary of HB2196 is shown on the Kansas State Legislature site.

HB2196 can also be read in its entirety.

Kansas Department of Labor update for week ending March 19, 2021 addresses the recent American Rescue Plan Act

Anyone wishing to appear before the Committee to speak to issues in this bill, please contact the Committee Assistant email LegServ@las.ks.gov or Contact Commerce Committee Assistant Michael Welton (785) 296-7358 for guidance about submitting written testimony. For Legislative Administrative Services (785) 296-2391 .