The Obama administration is taking advantage of hiring increases and the holding 5 percent unemployment rate. The newest proposal from the White House calls for a change to state-provided U.S. unemployment insurance, which would benefit those workers who have lost their jobs and found re-employment for lower pay, The Hill reported. This initiative would affect companies and their human resources teams across the country. Let's take a closer look at the proposition:
A focus on lost income
The change to unemployment insurance would increase security for the jobless and spur more experienced employees to reenter the workforce, even if they would receive a pay cut, according to The Washington Post. The proposed coverage would be available to people who were with their former company for three or more years and earn $50,000 or less with their new employer.
The updated insurance would require states to replace half of the income lost during downtime, capped at $10,000 over two years. These jurisdictions would also have to provide 26 weeks of unemployment coverage, while also making it available to part-time and low-income employees.
"HR teams should make sure employees are aware of the proposed changes."
Next steps for HR teams
This proposal, if passed, could be stressful for companies and their HR staff. Employers pay taxes for state unemployment insurance and an alteration to the existing plan could cause those figures to increase. Businesses could witness an increase in unemployment claims from former workers if President Obama's proposal is approved. Employees worried about job security, on the other hand, could feel reassured due to the recommended change.
This suggestion will be included in a budget proposal the Obama administration sends to Congress in February. HR personnel should stay updated on possible developments regarding state unemployment insurance and what that will mean for their companies. Furthermore, employers should ensure their workers are aware of revisions to the current law so employees are cognizant of their state-provided benefits.
The possible alteration to U.S. unemployment insurance could have a serious impact on employers and their HR leaders. Organizations should be conscious of possible changes to this and other federal government initiatives in order to provide their workers with the most updated information. Early familiarization with potential legal updates will help companies prepare for government implementation.