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The Pennsylvania Unemployment Law and Financial Eligibility Changes

When unemployed workers begin the application process for Unemployment Benefits, many take for granted that they will be financially eligible for benefits.  Financial eligibility requires a determination that the employee has worked a sufficient number of “credit weeks” in their “base year” and that they have sufficient earnings in the four quarters of their base year.  An employee’s base year is defined as the first four of the last five completed quarters.   In determining whether there are sufficient earnings in an employee’s four quarters, the state will break down the earnings in each quarter to determine which quarter has the highest earnings.  From there they will determine whether there were sufficient earnings in the other three quarters to make an applicant financially eligible.

In 2012 the Unemployment law was amended to require that an employee have at least 49.5% of his or her base year wages in quarters other than their highest quarter to eligible for benefits.  For example, if an employee made $40,000 in their base year, the employee would be required to have earned at least $19,800 in their three lowest earning quarters in order to be financially eligible for benefits.  While this does not sound like such a problem for those who work regularly, it was a big problem for seasonal workers, especially high earning employees in building and construction trades.  These employees would often have quarters with a lot of overtime resulting in an overly inflated high quarter, but then they could be unemployed for many months until the next construction project came along resulting in low remaining quarters.  As a result of this amendment the State estimated that over 40,000 Pennsylvanians were ineligible for benefits.

Fortunately the 2012 amendment has recently been changed.  On November 3, 2016 Governor Tom Wolf signed HB 319 which, in part, reduced the 49.5% requirement to 37%.  Now employees will need to have a minimum of 37% of their base year wages in their lowest three quarters.  This should ease the burden on many employees in the building trades and provide the protection needed when unemployment strikes.

Ira H. Weinstock, P.C. is located in Harrisburg, PA and serves clients in and around Southeast Pennsylvania. Contact our experienced Harrisburg attorneys today, we can travel if necessary.

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