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Committee hears competing proposals to shore up unemployment fund; business and labor push different fixes
Summary
At an informal hearing on House Bill 321, Representative Peterson proposed raising the taxable wage base and a narrow employee contribution for workers of 'negative-rated' employers; the Ohio Chamber pushed employer-side increases and benefit reductions for larger solvency gains while building trades warned cutting weeks would harm seasonal workers.
Representative Peterson and invited witnesses presented competing approaches to address Ohio’s unemployment compensation solvency problem during an informal hearing on House Bill 321.
Peterson said HB 321 would raise the taxable wage base from $9,000 to $9,500 and create an employer participation fund that includes a 0.14% employee contribution applied only when an employee works for a negative-rated employer (an employer whose benefit charges exceed their contributions). Peterson said those changes would generate roughly $23.8 million from raising the wage base and about $25.2 million from the narrowly targeted employee contribution, extending the trust fund’s solvency by an estimated two years.
Kevin Schimpf of the Ohio Chamber of Commerce testified that the system is "broken," noting Ohio has not met the U.S. Department of Labor solvency target since 1974. The Chamber urged reforms that better align employer taxes with experience ratings, proposed a model that would raise about $220 million annually by increasing contributions for negative-rated employers and recommended pairing revenue changes with benefit-week reductions to achieve longer-term solvency.
Labor and construction interests including ACT Ohio and building-trade representatives cautioned against cutting benefit weeks, arguing that seasonal and heavy-highway construction work can leave workers without work for months and that reducing weeks to 20 would cause serious hardship and workforce dislocation. Labor witnesses said a narrowly targeted employee contribution (similar to Pennsylvania’s model) could be considered but stressed that deep cuts to weeks would disproportionately hurt workers during a downturn.
Committee members pressed witnesses on implementation mechanics for an employee contribution (pay-period withholding vs. quarterly payments), the scale of employer versus employee responsibility, and whether indexing the taxable wage base to inflation is appropriate. The Chamber and business witnesses described models that combine employer contribution increases with benefit cuts to achieve more durable solvency, while labor urged balancing solvency with worker protections.
Chair Peterson closed by thanking witnesses and staff from the Department of Job and Family Services for scenario modeling; he said the committee expects to hear the remainder of testimony next week.
Next steps: Additional invited expert testimony and data runs will be scheduled; no bills were amended or voted on at this meeting.
