On July 2, Gov. Nixon vetoed House Bill 611, legislation containing provisions that would keep Missouri in compliance with federal mandates and protect money that is critical to Missouri’s unemployment insurance system. The legislation also contains a provision that would protect the integrity of the program by better defining misconduct for which an employee was disqualified from unemployment benefits. This language, which protects the integrity of the fund was also contained in Senate Bill 28, legislation that Gov. Nixon also vetoed. Both bills were Missouri Chamber priorities.
“Both of these bills would have saved Missouri businesses countless dollars and rooted out fraud in the unemployment system, with one stroke of a pen he has raised taxes on Missouri businesses to the tune of almost $1billion” Daniel Mehan, president and CEO of the Missouri Chamber said. “Employers have cited cases where unemployment benefits are being paid to employees fired for doing drugs on the job and stealing from their employer among other infractions. There is no reason why this common sense legislation should have been vetoed. The examples the governor gives for his veto are absolutely ludicrous and make no sense. This is a purely political move and this veto has jeopardized $1 billion.”
The mandates addressed in HB 611 were required under the federal Trade Adjustment Extension Act of 2011. HB 611 would require employers to provide separation information more quickly. The Trade Adjustment Extension Act of 2011 prohibits relieving an employer from charges of benefit payments (known as non-charging) when the employer fails to respond timely or adequately to a written request for separation information. Another provision of HB 611, as mandated by the Trade Adjustment Extension Act of 2011, is designed to penalize claimants who fraudulently continue to accept unemployment benefits after returning to work.
“If we don’t come into compliance, more than $1 billion will be lost by Missouri employers and the state and Missouri employers will lose FUTA tax credits,” Mehan said. “The governor is gambling with employers’ money and it’s going to hurt Missouri businesses.”
The Department of Labor projections for the Unemployment Trust Fund show that $527 million of the borrowed funds are still outstanding and must be paid back. Missouri will continue to have a deficit balance until 2016, a debt that is compounded by abuses to the system.
“Liberal interpretation of the definition of misconduct will continue to allow cases like these to erode the system without this legislation,” Mehan, said. “This raises the costs on all employers who fund the system. We need to protect the system for the purpose it was intended.”
The measure would be a step in the right direction to help pay down the state’s $527 million debt on unemployment insurance by reducing “abuses to the system.”