News & Information

CCH® UNEMPLOYMENT INSURANCE — 09/08/10

Kentucky amends its UI law on various topics

Kentucky has amended its Unemployment Insurance Law as follows:

Taxable wage base. On January 1, 2012, the taxable wage base will increase to $9,000. Afterwards, it will increase by an additional $300 on January 1 of each subsequent year to 2022, not to exceed $12,000.

Trust fund balance. The trust fund balance now will be determined as of September 30 instead of on December 31 each year.

Note that the rate schedule applicable to any particular year depends upon the trust fund balance as of September 30 (formerly December 31) of the preceding year. The trust fund balance is the amount of money in the Unemployment Insurance Fund, less any unpaid advances made to Kentucky under §1201 of the Social Security Act. In determining the amount in the fund on a given date, all money received by the Department as of that date will be considered as being in the fund on such date. If the trust fund balance exceeds 1.18% of the total wages paid in covered employment in Kentucky during the state fiscal year ended as of June 30 of that year, the rates listed in the Trust Fund Adequacy Rates schedule of Table A are in effect for the rate year. If the trust fund balance equals or exceeds $500 million but is less than the amount required to trigger the Trust Fund Adequacy Rates schedule, Schedule A is in effect. If the trust fund balance equals or exceeds $350 million but is less than $500 million, Schedule B is in effect. If the trust fund balance equals or exceeds $250 million but is less than $350 million, Schedule C is in effect. If the trust fund balance equals or exceeds $150 million but is less than $250 million, Schedule D is in effect. If the trust fund is less than $150 million, Schedule E is in effect.

Computation date. The computation date is now July 31 instead of October 31.

Reserve ratio. The reserve ratio will now be determined as of the June 30 immediately preceding the computation date. It was previously determined as of September 30.

Reserve account balance. An employer’s reserve account balance is the amount of contributions credited to its reserve account as of the computation date, less benefits charged through June 30 (formerly September 30) immediately preceding the computation date.

Contract construction trade. Any new domestic corporation or any foreign corporation authorized to do business in Kentucky or any foreign corporation active in conjunction with a domestic corporation in a joint venture, partnership or other legal entity engaged in the contract construction trades will pay contributions equal to the maximum rate payable under the schedule in effect for any given calendar year. The rate will remain in effect until the employer has employed persons in Kentucky for not less than 12 consecutive calendar quarters ending as of June 30 (formerly September 30) immediately preceding the computation date.

Waiting period. For an initial claim made on or after January 1, 2012, a claimant must serve a waiting period of one week, during which he or she may not receive benefits. The waiting week period will be the first compensable week of an initial claim for benefits for which the claimant is eligible and qualified to receive benefits. A waiting week period will be required for each benefit year, whether or not consecutive. No more than one waiting week period will be required in any benefit year. The waiting week will become compensable once the remaining balance on the claim is equal to or less than the compensable amount for the waiting week.

Weekly benefit rate. For claims effective on or after January 1, 2012, the weekly benefit rate will be 1.1923% of total base-period wages, but not less than $39 nor more than the maximum rate, which is determined annually.

Maximum weekly benefit rate. If the trust fund balance is below $120 million on the preceding September 30 (formerly December 31), the maximum weekly benefit rate amount may not exceed the prior year's maximum weekly benefit rate. In addition, if the trust fund balance as of September 30 (formerly December 31) exceeds $120 million but is less than $200 million, the maximum may not exceed the prior year's maximum by more than 6%; if the trust fund balance equals or exceeds $200 million but is less than $300 million, the maximum may not exceed the prior year’s maximum by more than 8%; if the trust fund balance equals or exceeds $300 million but is less than $400 million, the maximum may not exceed the prior year’s maximum by more than 10%; if the trust fund balance equals or exceeds $400 million but is less than $500 million, the maximum may not exceed the prior year’s maximum by more than 12%; and if the trust fund balance equals or exceeds $500 hundred million dollars, the maximum may not exceed the prior year's maximum by more than 15%.

Voluntary contributions. Any subject employer may at any time on or before December 31, 2011, make voluntary contributions to the fund in addition to the regular contributions required under the law. However, effective January 1, 2012, any subject contributing employer with a negative reserve account balance may make voluntary payments to the fund every other calendar year, in addition to the regular contributions required under the law. Further, voluntary payments by any employer may not exceed any negative balance in the employer's reserve account as of the computation date. Any employer who is delinquent in the payment of contributions, penalties or interest as of the computation date may make voluntary payments only after the delinquency is paid in full.

Extended benefits under ARRA. There is a "state `on’ indicator"for the state with respect to weeks of unemployment until the week ending four weeks prior to the last week of unemployment for which 100% federal sharing is available under Section 2005(a) of the American Recovery and Reinvestment Act of 2009 (ARRA) without regard to the extension of federal sharing for certain claims as provided under Section 2005(c) of the ARRA if: The average rate of total unemployment (seasonally adjusted) for the period consisting of the most recent three months for which data for all states are published before the close of such week equals or exceeds 6.5%; and the average rate of total unemployment in the state (seasonally adjusted) for the three month period referred to above equals or exceeds 110% of such average for either or both of the corresponding three-month periods ending in the preceding two calendar years.

There is a "state `off’ indicator" for the state for a week if, for the period consisting of such week and the immediately preceding 12 weeks, the provisions above or those pertaining to regular extended benefit payments are not satisfied.

The total extended benefit amount payable under the ARRA during periods of high unemployment to any eligible worker with respect to his or her applicable benefit year will be the least of the following amounts: 80% of the maximum amount of regular benefits that were payable to the individual in the applicable benefit year; or 20 times the weekly benefit rate that was payable for a week of total unemployment in the applicable benefit year.

Administrative regulations. The Education and Workforce Development Cabinet is encouraged to promulgate or amend administrative regulations to implement the following on or before January 1, 2012:

(1) Allow for the electronic notification of an employer regarding an unemployment insurance claim;

(2) Increase the employer protest period from 10 to 15 days after an unemployment insurance claim is filed;

(3) Institute random audits of job search efforts provided by claimants; and

(4) Revise the unemployment insurance appeal process regarding the conduct of hearings.