The Alabama Senate on Thursday approved legislation that would reduce the current length of unemployment benefits and tie them to state and local unemployment rates.
The bill, sponsored by Sen. Arthur Orr, R-Decatur, would take the current maximum 26 weeks of unemployment benefits to 14 weeks. It could rise to 20 weeks if the unemployment rate rises to 9 percent. A person in a work training program could receive an extra five weeks of unemployment benefits.
“The thinking is to encourage people to get out,” Orr said after the Senate vote. “Some people will take the full 26 weeks and not look for a job until that 26 weeks is about to run out. This hopefully will encourage them to look a bit earlier.”
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Orr’s legislation passed 21 to 8 but was amended on the floor by Sen. Rodger Smitherman, D-Birmingham, to shift the calculation of unemployment rate from the state average to county ones. Historically, rural counties in Alabama tend to have higher unemployment rates than state as a whole.
“Those people have a difficulty in being able to move forward,” Smitherman said on the floor. “It takes into account citizens in those areas who may not be able to get training or classes on a consistent basis.”
Orr accepted the amendment though he said it was unclear if the state would be able to make that change.
The state’s unemployment rate was 3.5 percent in December, according to the Alabama Department of Labor. Orr’s bill would end unemployment benefits after 14 weeks when unemployment is under 6.5 percent, then increase it one week for every half-percent increase in the unemployment rate, up to 9 percent.
Employers fund the state’s Unemployment Compensation Trust Fund through a tax on the first $8,000 of workers’ gross earnings. The Legislative Fiscal Office said in a note with the bill it would reduce obligations to the the fund by $56.2 million. Orr said the bill could appeal to employers looking to locate in the state.
The bill slightly raises the maximum payment for unemployment from $265 a week to $275 a week, starting on Jan. 1.
