Tennessee lawmakers to consider reducing eligibility time for unemployment benefits

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A bill that would change how long Tennesseans can receive unemployment benefits is scheduled to be discussed Wednesday in a House subcommittee.

House Bill 1039, sponsored by Rep. Kevin Vaughan, R-Collierville, would reduce the number of weeks that eligible unemployed workers can receive benefits from 26 weeks to 12 weeks.

“The notion of us, week in and week out, just paying unemployment when there are jobs readily available from one end of the state to the other is really bad government,” said Rep. Jeremy Faison, R-Cosby. “And we’re encouraging people to sit still instead of being productive.”

“I mean this is some real Ebenezer Scrooge type of stuff here,” Sen. Jeff Yarbro, D-Nashville, told Fox 17 News.

While the bill reduces the number of weeks people can receive unemployment benefits, National Federation of Independent Business Tennessee State Director Jim Brown said an amendment is set to be introduced Wednesday that will increase the weekly pay by $25 a person. Tennesseans on unemployment currently receive a maximum of $275 per week.

That increase is expected to affect 65,000 people.

Brown thinks “everyone is a bit more comfortable” with the bill after the amendment to increase the amount of benefits was broached since Tennessee’s unemployment benefits haven't been updated for 15 years.

Tennessee’s average duration for unemployment is second worst in the southeast behind Kentucky at 15 weeks. Brown said 250,000 jobs are on Tennessee’s jobs website and many NFIB members are having a hard time having applicants show up for interviews for a variety of reasons, from the COVID-19 pandemic to a fear of losing the current unemployment benefits.

Some businesses have had to significantly increase employee pay to combat the struggles in finding new employees, Brown said.

“Forty-two percent of members have jobs to fill, and they can’t,” Brown said.

The legislation stipulates if the state’s average unemployment rate is more than 5.5%, then payments would be extended at an increment of one additional week per every half a percentage point up to a new maximum of 20 weeks if the rate is higher than 9%.

The most-recent data shows Tennessee had a 5.1% unemployment rate in January with some counties, including Shelby, Hardeman, McNairy, Bledsoe, Perry, Lake and Houston, having rates of 7.6% or higher. February estimates showed the state rate was around 4.9%.

Before the amendment to add $25 per week to the maximum benefit, a fiscal summary estimated HB 1039 would save Tennessee more than $31 million a year in unemployment payments.

The bill analysis also said the bill is expected to have an effect that will decrease revenue for some businesses since less in unemployment benefits would be paid out and then spent. The bill is not expected to have an effect on jobs.

HB 1039 is on the calendar to be discussed in the Tennessee House Finance, Ways and Means Subcommittee on Wednesday.

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