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ARIZONA STATE SENATE
Fifty-Fourth Legislature, Second Regular Session
ENACTED
AMENDED
FACT SHEET FOR S.B. 1694/h.b. 2911
unemployment compensation; coronavirus disease
Purpose
An emergency measure, retroactive to March 11, 2020, that allows the Department of Economic Security (DES) to implement alternative unemployment insurance benefit eligibility and employer contribution requirements consistent with federal guidance for individuals and employers affected by a declaration of emergency related to the coronavirus disease 2019 (COVID-19).
Background
Arizona's Unemployment Insurance (UI) Program is administered by DES for the benefit of persons unemployed through no fault of their own. When an employee is eligible for benefits, the state pays those benefits out of the UI Trust Fund, funded with Arizona’s unemployment tax paid by employers. Employers also pay the federal unemployment tax, known as FUTA, which is collected by the federal government and is used to administer the UI Program at the federal and state levels (A.R.S. Title 23, Chapter 4).
In order to be eligible for UI benefits under federal law, an individual must be able and available to work and must actively seek work (42 U.S.C. § 503). Arizona employment security law further prescribes UI benefit eligibility, including requirements relating to efforts to obtain work, an unemployment waiting period and when an individual is deemed to be unemployed (A.R.S. §§ 23-621 and 23-771).
On March 11, 2020, Governor Ducey issued a declaration of emergency and an executive order to provide health officials and administrators with tools and guidance necessary to combat the continued spread of COVID-19.
On March 12, 2020, the U.S. Department of Labor (U.S. DOL) issued UI Program Letter 10‑20 (UIPL 10-20) to provide guidance to states regarding unemployment compensation flexibilities related to COVID-19. According to UIPL 10-20, the federal framework gives states significant flexibility to determine standards for able, available and work search requirements (UIPL 10-20).
There is no anticipated fiscal impact to the state General Fund associated with this legislation.
Provisions
1. Allows, regardless of Arizona employment security law, DES to implement alternative benefit eligibility and employer contribution requirements that is consistent with U.S. DOL guidance, including UIPL 10-20, for the federal-state UI Program for individuals and employers affected by the federal declaration of emergency related to COVID-19.
2. Precludes DES from consideration of increased benefits charged against an employer's account resulting from alternative benefit eligibility for individuals affected by the federal declaration of emergency related to COVID-19 when fixing employer contribution rates for the Unemployment Compensation Fund.
3. Permits DES to adjust eligibility requirements for participants of the shared work plan during the federal declaration of emergency related to COVID-19, excluding shared work benefits for individuals whose normal weekly hours are reduced by more than 80 percent.
4. Allows DES to adopt rules necessary to administer alternative benefit eligibility and employer contribution requirements and exempts DES from administrative procedure requirements for the purposes of implementation.
5. Contains a legislative intent clause.
6. Makes technical changes.
7. Becomes effective on March 27, 2020, retroactive to March 11, 2020.
Amendments Adopted by Committee of the Whole
1. Connects applicability of requirements to a federal declaration of emergency related to COVID-19.
2. Excludes increased benefits charged against an employer resulting from the alternative benefit eligibility criteria from consideration in fixing employer contribution rates to the Unemployment Compensation Fund.
3. Authorizes DES to adjust eligibility requirements for specified participants of the shared work plan during a federal declaration of emergency related to COVID-19.
4.
Asserts the Legislature’s
intent that the state ease eligibility requirements and augment access to the
unemployment compensation system during the declaration of emergency related to
COVID-19.
5. Makes technical changes.
Senate Action House Action
Rules 3/18/20 DP/PFC 6-1-1 Rules 3/19/20 DP/C&P 8-0-0-0
3rd Read 3/19/20 30-0-0 3rd Read 3/23/20 60-0-0
(S.B. 1694 was substituted for H.B. 2911 on
3rd Read)
Signed by the Governor 3/27/20
Chapter 48
Prepared by Senate Research
April 13, 2020
LB/CRS/kja