Vermont businesses concerned over proposed unemployment bill

MONTPELIER, Vt. (WFFF) — A bill in the Vermont Legislature that would increase weekly unemployment benefits by 20% has some business leaders worried it would discourage people from eventually returning to work.

Their argument is that in giving the additional aid to unemployed Vermonters, many of them would end up taking in more money on unemployment than they would by returning to work, even after the worst of the pandemic has passed. The benefits would last a year, and go into effect on July 1.

"At this point, we're hoping that everyone could be back to a semi-normal life and working in their workplace, and hopefully not be on unemployment anymore," said Austin Davis of the Lake Champlain Chamber.

Another amendment to the bill that was passed by the Senate Economic Development Committee would add a $50 dependent benefit that would be permanent.

A group of business leaders held a remote meeting Wednesday afternoon to outline their concerns, which include the worry that economic recovery will be delayed by an inability to recruit employees.

"The added unemployment benefits in S.10, coupled with the Federal assistance coming from the American Rescue Plan Act, means that anyone who is on unemployment who was making $24 an hour and has a child, will now be making just as much, or more, by staying on unemployment," said Wendy Mays, Executive Director of the Vermont Association of Broadcasters, which moderated the meeting.

Mays added that when the Committee on Economic Development first took up the bill in January, the business community supported the idea because it "protected businesses’ Unemployment Insurance (UI) Experience Ratings."

"If a business had to close or limit operations due to COVID-19, and that forced them to furlough or lay employees off, S.10 would prevent their Experience Rating from being affected, which is one of several factors that determines how much Unemployment Insurance tax they have to pay," Mays said.

Matt Musgrave of the Associated General Contractors of Vermont said his issue is that the proposed benefits could have unintended consequences for industries like his that have seasonal layoff periods from November to April. The group represents over 15,000 road and bridge builders.

"We're going to go back to work on April 15, and our office is now starting to field calls from employers that are dealing with challenges from employees that were never laid off due to COVID, they were laid off for their normal seasonal layoff period," Musgrave said.

The committee is well-aware of concerns from business leaders. They've talked about returning to the usual requirement that unemployed Vermonters need to be searching for jobs while collecting aid.

"If somebody is offered a job and turns it down, they could lose their unemployment benefits entirely," said Sen. Michael Sirotkin (D-Chittenden).

The committee has also had discussions about deferring the 20% increase until federal benefits end. The Vermont Senate is expected to take up this bill for a vote tomorrow.