Florida House and Senate Tackle Unemployment Compensation System – and Reform

By Sheri D. McWhorter

On March 10, 2011, the Florida House of Representatives, by more than a 2 to 1 margin, passed HB 7005, proposed legislation directed at reforming Florida’s unemployment compensation system. Representative Doug Holder (R-Sarasota), chair of the Economic Development & Tourism Subcommittee and sponsor of HB 7005, described the bill as intended to reduce taxes on businesses and through tax relief, improve Florida’s business climate, and save jobs so that more people are not added to Florida’s already overburdened unemployment system. Gov. Rick Scott favors HB 7005.

HB 7005 reduces from the current 26 weeks to a maximum of 20 weeks of unemployment benefits payments available to unemployed workers, and ties the number of available benefit weeks to the state’s unemployment rate, i.e., the higher the state’s unemployment rate, the greater the number of benefit weeks available to displaced worker, and vice versa. Under the House proposal, only the number of weeks of benefits would be reduced; the maximum weekly benefit amount of $275 would not be changed.

HB 7005 seeks to clarify eligibility for unemployment benefits after a worker voluntary quits his or her job. To collect unemployment compensation benefits following a resignation, a worker must establish he or she had “good cause” for leaving employment, which is defined in HB 7005 as that “cause” which would “compel a reasonable employee to cease his or her work.”

The House legislation expands the definition of “misconduct,” which misconduct would disqualify a worker from receiving unemployment compensation benefits. Under HB 7005, “misconduct” would be revised to include conduct by the worker that occurs outside the employer’s workplace or outside working hours that demonstrates the worker’s “conscious disregard” of the employer’s interests (as opposed to the current definition, which requires “willful and wanton” disregard of the employer’s interests). “Misconduct” would also include the worker’s “deliberate violation or disregard” of the employer’s “reasonable standards of behavior”; chronic absenteeism or tardiness by the worker in violation of a known policy of the employer; or one or more unapproved absences by the worker where he or she has previously received a written warning. In addition, a worker’s willful and deliberate violation of state regulations or standards that would cause the employer to be sanctioned or lose an applicable license or certification will constitute “misconduct,” as would violations of employer rules unless the worker can demonstrate either (a) that he or she did not know about the rule or (b) the rule is either unlawful or not reasonably related to job environment and performance or enforced inconsistently.

HB 7005 addresses criminal activity by the worker, and provides that under certain circumstances, a worker’s criminal activity in connection with work need not be punishable by imprisonment to result in the worker’s disqualification from receiving unemployment compensation benefits. The House proposal also clarifies that a worker who is incarcerated is disqualified from receiving unemployment benefits.

In addition, HB 7005 addresses severance pay received by the worker, and provides that the number of weeks severance pay disqualifies a worker from receiving benefits is equal to the amount of the severance pay the worker received divided by the worker’s weekly pay.

The Florida Senate is presently considering its own legislation (SB 728), which has been characterized by some as “less draconian” than the House approach. Under the Senate proposal, the maximum weeks of unemployment benefits payments available to unemployed workers would not be reduced. Rather, the Senate proposal addresses benefits eligibility, specifically, the definition of “misconduct” contained in the Florida unemployment compensation laws, and reflects many of the same revisions to the definition as are contained in the House legislation. Such changes would make it less burdensome for an employer to establish that a worker was terminated “for cause,” and thus ineligible to collect unemployment compensation benefits. Both the House bill (HB 7005) and SB 728 contain a requirement that unemployed workers undergo an initial skills review in order to qualify for unemployment compensation benefits, and the results of that skills review is reported to regional workforce board or career center.

It appears a showdown is coming over Florida’s unemployment compensation taxes, benefits, and legislative reform. The House has passed HB 7005, with its unemployment compensation benefits cuts. Labor unions and other worker advocates have staged and are continuing to stage protests. The Senate continues to tweak its proposed reforms and legislation. Gov. Rick Scott appears to come down on the side of less taxes on business, with the result being reduced benefits for unemployed workers.

Florida businesses and business owners would be well advised to stay tuned.

A hearing before an NLRB administrative law judge is scheduled for January 25, 2011.

About the Author
Sheri D. McWhorter, JD, SPHR is a Florida Bar Certified Specialist in Labor & Employment Law, and is President and Managing Shareholder of WorkplaceLegal SolutionsSM, Law Offices of Sheri D. McWhorter, P.A.  With offices in St. Petersburg and Tampa, WorkplaceLegalSolutions provides client focused employee relations counseling and proactive employment law solutions to businesses and non-profits throughout Florida and the greater Tampa Bay area.  For assistance, please call 866. 829.1883.