State officials, employers and legislators weigh options to raise unemployment benefits and modernize administration

Legislators asked the Department of Employment Security and other stakeholders how to raise the state’s weekly unemployment benefits without destabilizing the trust fund or creating perverse work disincentives.

Rich Labors, Deputy Commissioner for Employment Security, described implementation options and fiscal modeling the department performs. Labors said the department prefers adjustments that keep the same type of calculation based on base‑period earnings because changes that require individualized percentage calculations would need larger IT work. “As long as we’re looking at base period earnings and covered employment, and then we’re tying that to a weekly benefit amount, that is the easiest for the department to implement,” Labors said.

Labors summarized current program metrics: the statutory maximum weekly benefit cited in committee materials was $427 (for base period earnings at $41,500), the taxable wage base is $14,000, employers pay on average about $85 per employee annually under current rates, and the state’s unemployment trust fund balance was reported around $386 million at the hearing. He said the fund was forecast to remain in the $370–$395 million range and that federal US Department of Labor solvency metrics use atypical stress factors (including pandemic years) when judging state solvency.

Committee members and witnesses debated two broad approaches lawmakers have proposed: (1) extend the top of the current statutory table (add more tiers or raise the top tier’s base‑period cap), which is easier to implement, or (2) switch to a straight percentage of prior wages (for example 50% of weekly earnings up to a cap), which would require larger IT changes and more forecasting.

Deputy Commissioner Labors said raising tiers (a table) or adding moderate top tiers would be straightforward changes and could be implemented quickly. By contrast, changing the calculation to a per‑claim percentage would likely be a larger IT project (Labors estimated months rather than days), incur vendor costs and require staff training. He said a cloud migration and modernization program funded by a federal grant is underway, and that the agency plans AI‑assisted tools to improve claimant engagement and reduce fraud. Labors said New Hampshire received a federal modernization grant (nationwide allocation) and planned to migrate the unemployment system to the cloud beginning in May with a December completion target, after which modernization tools would be added.

Representatives of small business and employer groups expressed concern about the effect higher benefits could have on employer tax rates after stress testing. John Reynolds, SAIT director for the National Federation of Independent Business, said small employers frequently report unemployment insurance costs as a top‑two concern and urged caution: he cited an academic estimate that a replacement rate near 29% can be “optimal” in some studies and urged lawmakers to weigh duration effects and fraud exposure if benefits rise.

Employers and the New Hampshire Lodging and Restaurant Association described dividend and experience‑rating mechanics: firms in mutual or trust arrangements may receive dividends when carriers release reserves, but dividends are not directly correlated to next year’s loss costs; experience modifiers and class codes remain the primary determinants of an employer’s rate.

Several legislators asked for concrete data before changing benefit structure. Labors agreed to deliver a breakdown of claimants by duration and industry sector, and to work with actuaries to adjust historical weekly‑volume measures so they are comparable across economic cycles (for example, to make Great Recession figures comparable to current labor‑force size). Lawmakers also discussed possible triggers to expand or contract weeks of eligibility tied to workload metrics (for example, four‑week moving averages of weekly filers) rather than using broader unemployment‑rate measures.

Ending: The committee asked the department to supply sectoral claim‑duration data, actuarial stress tests for proposed tables and triggers, and an implementation timeline and cost estimate for any IT changes. Lawmakers signaled interest in bipartisan solutions that balance improved wage replacement for some claimants with safeguards for employers and program integrity.