Kansas lawmakers kick off hearing on bill to revamp state’s unemployment system

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TOPEKA, Kan. (KSNT) — Kansas lawmakers kicked off hearings for a proposed bill to revamp the state’s unemployment system Thursday.

The 71-page bill, House bill 2196, changes provisions of the employment security law and unemployment trust fund.

Representative Sean Tarwater, R-Stilwell, chair of the state’s House commerce committee, which sponsored the bill, said one of the main points of the proposal is to make moves on a new computer system for the state’s unemployment office.

“The fixes that we heard today on the unemployment bill are long term, and they’re to fix the system forever,” Rep. Tarwater said.

According to Tarwater, there are three main items that this bill addresses. The bill proposes development and oversight of the department’s I.T. modernization project set to be completed in 2022. Tarwater said monitoring increasing tax rates for employers who’ve been impacted by fraud is also a main component of the bill, along with reimbursing the state’s unemployment trust fund for fraud claims that have been paid out.

Committee members are hoping the implementation of an updated I.T. system will help the Kansas Department of Labor better address the ongoing issues the department has struggled with over the last year. This includes delayed unemployment payments and paying out fraudulent claims.

Phillip Hayes, a human resources association representative, speaking on behalf of the Kansas employer community, detailed the economic impact the cases of fraud could have on top employers in the state.

Most states require employers to pay taxes under a merit-rated system based on the benefits paid out against their account and the taxes paid into their account. Hayes said some employers in Kansas could see an increased tax rate of 800% by 2022 due to the coronavirus pandemic.

“I’m in the jobs business, we recruit all the time, and it’s certainly going to have an impact in the hiring as we go,” Hayes said, as he spoke of the need for reform.

In the House Appropriations Committee, lawmakers also held a hearing Thursday for House Bill 2195 to address the needs of employers who’ve been impacted by fraud. The bill proposes holding reimbursing employers and other employers harmless for fraudulent unemployment insurance claims and reimbursing the unemployment insurance trust fund with money from the state general fund. Whether the bill will make it out of committee is yet to be determined.

No final moves are being made on House Bill 2196 taken up in the House commerce committee as well, as lawmakers prepare for a set of hearings next week.

Ranking minority member of the House commerce committee, Representative Stephanie Clayton, D-Overland Park, is hoping these revisions will help get things moving in a better direction. However, the cost of the bill may be a concern.

“I like a lot of the things in the bill, but one of my biggest concerns is that it doesn’t have a fiscal note,” Rep. Clayton said. “It does address some of the problems, but the fiscal impact that could have impacts on the budget that could be detrimental to other core government services is my chief concern.” 

Rep. Tarwater also noted while the bill is a good first step in solving the issues the state’s department has been experiencing, there is still more immediate action that needs to be taken.

“We need to address today’s concerns, which are the Kansans that deserve to be paid for unemployment, but haven’t been paid since March,” he said.

Next week, lawmakers will be hearing testimony from supporters and opponents of the bill. 

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