SOURCE: Des Moines Register

State Republicans are moving to shorten the length of time Iowans can receive unemployment benefits by two and a half months.

If the measure, House Study Bill 631, becomes law, Iowa would go from offering 26 weeks of unemployment benefits to 16 weeks. Workers would also be required to take lower-paying jobs sooner, or risk losing their benefits.

The bill would also cap damages in medical malpractice and truck-driving lawsuits. It would take effect July 1, if passed.

Gov. Kim Reynolds, a Republican, called for the changes in her Condition of the State address last month. She and other Republicans are promoting a range of measures they say are intended to ease Iowa’s worker shortage by attracting and retaining workers, and pairing workers with new jobs after they lose their employment. Democrats and labor groups said the proposal would hurt workers who lose their jobs through no fault of their own.

The bill passed its first legislative hurdle, a three-member House subcommittee, Tuesday with two Republicans in support and the panel’s Democrat opposed. The full House Labor Committee was considering the bill Wednesday evening and it could receive a floor vote as soon as next week, said Rep. Dave Deyoe, R-Nevada, who chairs the House Labor Committee.

The crowded meeting featured business groups championing the proposal, which they said would help people find jobs, while labor unions said it would hurt Iowans who are already struggling.

Iowa would offer fewer weeks of unemployment benefits than most states

If the bill becomes law, Iowa would offer fewer weeks of unemployment benefits than all but a handful of states. 

Most states offer up to 26 weeks of unemployment benefits. Two states, Montana and Massachusetts, offer more than 26 weeks, according to the Center on Budget and Policy Priorities, and New Jersey and New Mexico offer 13 weeks of extended benefits in addition to their 26 weeks, depending on their unemployment rate.

Ten states typically offer fewer than 26 weeks: Alabama, Arkansas, Florida, Georgia, Idaho, Kansas, Michigan, Missouri, North Carolina and South Carolina.

If Iowa drops to 16 weeks of benefits it would be tied with Arkansas and Kansas. Only four states cut off benefits earlier.

Florida offers 12 weeks of benefits. Alabama offers 14 weeks, although workers can receive a five-week extension if they enroll in a state-approved training program. Depending on economic conditions, North Carolina offers a maximum of 12 to 20 weeks of unemployment. Georgia offers between 14 and 20 weeks but has temporarily increased to 26 weeks during the COVID-19 pandemic.

Deyoe said he thinks most people think four months is a reasonable amount of time to find a job in the current market.

“I think most people would see right now that six months sounds like an awfully long time to be on unemployment with as many job openings as there are right now,” he said.

Felicia Hilton, a lobbyist for North Central States Regional Council of Carpenters, called the legislation “a cruel bill” that insinuates workers who receive unemployment are lazy.

“You can’t apply for unemployment if you haven’t worked and earned the unemployment, so it’s an earned benefit,” she said. “It isn’t something that someone is handing out to you.”

Iowa workers laid off because of a factory closing would be eligible for 26 weeks of unemployment benefits, down from 39 weeks under current law.

Workers would have to wait a week before receiving unemployment

Iowa’s bill would also add a one-week waiting period before workers could begin receiving unemployment benefits.

Labor groups said the loss of pay in the first week would hurt and would be especially harmful to those in the construction industry who are laid off between jobs.

Mike Gronstal, a lobbyist for the Iowa State Building and Construction Trades and a former state senator, said the vast majority of building trade workers are laid off once a year.

“This bill reaches into the pockets of tens of thousands of Iowans — tens of thousands of them — and takes three or four hundred bucks out of their pockets,” he said. “That’s what this bill does. That’s a pretty serious attack on our industry.”

Jeff Shudak, a union plumber from Council Bluffs and president of the Western Iowa Labor Federation, said he found out about the bill while he was sitting down to lunch and immediately put down his sandwich and drove to Des Moines.

He said, because of the way Iowa Workforce Development calculates work weeks, someone laid off on a Tuesday would have to wait close to two weeks to receive any unemployment benefits if the waiting period is put in place.

“That week don’t count if you work a day, because you’ve already made too much,” he said. “So you sit at home Tuesday, Wednesday, Thursday, Friday. You sit at home, then you wait for your week.”

Workers would have to take lower-paying jobs or risk losing benefits

Iowans who receive job offers while on unemployment would be required to take lower-paying offers more quickly or risk losing their benefits, if the bill becomes law.

The bill would lower the threshold of what’s considered “suitable work” compared to the worker’s salary in their previous job. Under current law, Iowa workers are not required to accept a job offer for less pay until after their fifth week on unemployment. The bill would lower that to one week and continue ratcheting down the percentage of the employee’s wage that is considered suitable.

  • During the first week of unemployment, Iowans would have to accept an offer at 100% of previous pay.
  • In weeks two and three, 90% of previous pay.
  • In weeks four and five, 80% of previous pay.
  • In weeks, six, seven and eight, 70% of previous pay.
  • After week eight, 60% of previous pay.

Current law allows Iowans to remain on unemployment longer while looking for higher-paying jobs. Suitable work is defined as:

  • In weeks one through five, 100% of previous pay.
  • In weeks six through 12, 75% of previous pay.
  • In weeks 13 through 18, 70% of previous pay.
  • After week 18, 65% pf previous pay.

What has Reynolds already done on unemployment?

Reynolds has talked about shifting Iowa’s unemployment system to focus on getting people back into jobs, including by creating a reemployment division inside Iowa Workforce Development.

Last month, Iowa began requiring unemployment claimants to do more to try to get jobs each week and, in some cases, meet regularly with state career counselors. The new rules require claimants to conduct four “reemployment activities” every week, up from two.

And in June, Reynolds withdrew Iowa from three federally-funded unemployment programs Congress created in response to the COVID-19 pandemic. The move meant Iowans on unemployment stopped receiving an extra $300 each week and kicked about 28,000 people off the unemployment rolls.

Last year, Republicans pushed unsuccessfully in the Legislature to cut the amount of compensation that workers on unemployment could receive. The measure proved unpopular, with 75% of Iowans opposed to the reduction in benefits, according to a Des Moines Register/Mediacom Iowa Poll. The bill never passed.

Damages in lawsuits would be capped

Separately, the bill also places new caps on the amount of money plaintiffs can recover in medical malpractice lawsuits and suits over negligence by trucking companies.

The changes deal with noneconomic damages, or money recovered for injuries such as pain, suffering and emotional distress. The bill does not affect compensation for things like lost wages, medical expenses or costs.

Iowa law already caps noneconomic damages in medical malpractice cases at $250,000 except in cases of permanent impairment, disfigurement or death, where there is currently no cap. The bill would cap damages in those cases at $1 million.

For trucking company lawsuits, noneconomic damages would be capped at $1 million.

Supporters say capping noneconomic damages will help lower insurance rates for doctors and help hospitals and health care centers avoid costly verdicts in cases of malpractice. Opponents say Iowa has few large jury verdicts in malpractice cases and insurance rates in the medical and trucking fields are low.