VT Employers Get Unemployment Trust Disaster Relief

At least one Woodstock business, if not more, are included among 75 Vermont employers who will get a financial break from the impacts of Tropical Storm Irene. These funds will come out of an unemployment insurance trust fund.

The Governor’s announcement Wednesday is the result of a Vermont bill created with the Department of Labor to offset the financial impacts of changes in unemployment “ratings” for businesses whose employees were laid off after Irene and who then filed for unemployment benefits.

We understand it is similar to changes the might occur to your car insurance if you are in too many fender-benders or crashes. Businesses maintained flooding was not their fault and they should therefore not be penalized.

Woodstock Early Bird has been in touch with the Vermont Secretary of Labor Annie Noonan who says the list of businesses and amounts they are to receive is confidential.

This confidentiality was explained as the funds come out of a paid-into employer Unemployment trust fund (not taxpayer monies). So we can’t tell you which businesses stand to benefit nor how much they will get in funds.

However, we did get confirmation that at least one Woodstock business will get relief. We also tried to speak with Rep. Alison Clarkson who worked on the bill but were not able make contact.

We note Woodstock Farmers Market owner Patrick Crowl has been a public advocate for such relief for Vermont businesses such as his, having maintained that he stood to take a future financial loss by having his near-perfect rating for unemployment claims ruined by the destruction of Tropical Storm Irene. As the numbers of laid off employees filing go up, so do businesses costs and required contribution/taxes into the fund.

Below is the announcement from Governor Shumlin’s office about the Umemployment Fund relief:

MONTPELIER – Gov. Peter Shumlin was joined today by business owners and lawmakers to announce that $5 million in unemployment insurance relief will be provided to 75 Vermont businesses – impacting about 300 employees – hit in 2011 by three natural disasters, including flooding in April and May, and Tropical Storm Irene in August. The Governor said the new law is another step in the state’s efforts to help Vermont businesses recover from natural disasters and prepare for those in the future.

“We recognized that businesses already struggling to recover from these natural disasters were facing added unemployment expenses,” said Gov. Shumlin. “Together, working with business owners and legislative leaders, we adopted disaster relief provisions to ensure that the approximately 75 employers from across Vermont who applied for help will get some relief from these costs.”

The severe weather in 2011, particularly the tropical storm, forced many businesses to shut down for extended periods of time and involuntarily lay off employees. While these layoffs were not the fault of many employers, their unemployment experience rating was affected and their unemployment assessments increased significantly.

To assist these companies and get Vermonters back to work, the Vermont Legislature passed, and the Governor signed, a bill implementing Disaster Relief Unemployment Insurance Provisions that grant up to eight weeks of retroactive state unemployment tax relief for affected employers.

The credit will be applied to the next UI bills, which are issued quarterly, and because the rates are set – based on experience – through 2014, rates will be adjusted to reflect the change through that final billing cycle. The new law also provides up to four weeks of relief in the event of future disaster events.

Working with the Department of Labor, the Legislature determined that the state could afford to put approximately $8 million toward employer relief without weakening the UI Trust Fund.

The program is projected to cost approximately $5 million, significantly less than originally anticipated, ensuring that the Labor Department can grant relief to employers without negatively impacting the fund’s stabilization.

3 responses to this post.

  1. Posted by Heidi Gennaro on June 27, 2013 at 07:34

    Wow, we actually have some good common sense in government here??! Thank GOD! And major kudos to Patrick Crowley for his tireless efforts to see this bill in effect. Heck, this almost restores my confidence in government . . . I said, almost.

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  2. There is more to this story than meets the eye. Just so you know, only 8 weeks of relief were allowed in this bill–this after Rep. Clarkson and Sen McCormick originally proposed full relief. The cry from the rest of the legislature was that Vermont was too poor to extend full relief to all businesses. The WFM was closed for 12 weeks. So with 8 weeks of relief we still have 4 weeks of disaster unemployment being charged to our everyday unemployment rating. We will still pay to the state a whopping 15K in additional unemployment benefits this year and 45K over 3 years! You call that fair?

    We just don’t buy the state crying poverty on this issue. We proposed an equitable proposal—a small raise of the minimum UI rating for all businesses to cover the Irene losses and losses to the UI fund. And excesses could go toward a rainy day fund when the next disaster strikes. That proposal seemed to fall of deaf ears. If it were IBM dealing with a large UI rating increase, they would scream bloody murder and people would listen. Our bad: we need to learn how to bring an issue to Montpelier and have people listen. Just having your representatives try is not enough.

    The dagger in the heart is playing Russian roulette with another disaster. The bill signed by Gov. Shumlin allows for only 4 weeks of relief for the future. 4 weeks?? Honestly, if it were today, and we only got 4 weeks, we’d probably close up shop and move somewhere else or scrap the whole thing.

    And you may say, “wait a minute—really, just close?” Yes. For a larger business the financial burden of closing 6 months or so would be so significant and 4 weeks of relief so insignificant that serious consideration would be given to permanently closing. Why on earth would you even consider paying a 3 year Disaster Tax of that magnitude?

    Just ask the West Hartford General Store…they were closed for over 6 months…you think either 4 or 8 weeks is gonna help them?? I believe they have simply stopped paying their UI quarterly bill. Maybe we should consider that. Wonder if they have faith in their government.

    We still have to do some work to do but early WFM research showed that many states have UI exception clauses in the event of Federally Declared Disasters and that closed businesses do not have any downtime reflected in their normal UI quarterly payments. Seems to make sense to us. And I bet most have some sort of equitable UI payment from all businesses to help cover excessive loss.

    Thanks for listening to our rant. Hopefully it won’t be the last you hear from us on this important issue for the business community.

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  3. Posted by Steven Thomas on June 27, 2013 at 22:31

    Our business is only two employees and we’d be more than happy to have a UI rate increase to help businesses like WFM. We’d be happy to do it if we were larger too. Quite simply, because it’s fair.

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