In the last two months there have been three states (TN, UT, and WV) that have amended their UI laws relating to the situation where an employee resigns because his/her military spouse has been reassigned and relocated.
In Tennessee, SB 884 was signed by Governor Haslam on April 4, 2012. This bill permits an employee to qualify for UI benefits if he/she terminates because his/her military spouse has been reassigned and relocated. The employer’s UI tax account will not be charged for such benefits.
In Utah, HB 263 was signed by Governor Herbert on March 15. This bill also grants UI benefits and relieves the employer of benefit charges when an employee voluntarily quits to follow a military spouse, and when it is impractical for the employee to commute from the new locality.
In West Virginia, HB 4007 was signed by Governor Tomblin on April 2, 2012. This bill also grants UI benefits to the employee who voluntarily leaves to accompany a military spouse who is on active duty and who has been reassigned. As in Tennessee and Utah, the employer is not charged for such benefits.
We first noticed a trend to approve UI claims filed in this situation four years ago, when only eight states (AR, CT, FL, GA, MT, NM, SC, and TX) had such statutes in place. Since then, the Recovery Act was enacted in 2009, providing incentives to states to grant benefits when any employee resigns to accompany a spouse (whether military or non-military) who has been transferred.
Now there are 42 states that grant benefits when an employee moves to accompany a spouse (military or non-military) who has been transferred. The three states that recently passed legislation (TN, UT, and WV) did not adopt the broader provisions relating to workers with non-military spouses.
As a reminder, when regular UI benefits are paid, there are circumstances when such benefits are not chargeable to a specific employer’s UI tax account (sometimes referred to as noncharging or relief from charges). In such cases, the benefit payments do not directly affect the employer’s UI tax rate. Such benefits are pooled costs. Nevertheless, the UI benefit payments are drawn from the state’s UI trust fund, impacting on the future tax rates for all experience-rated employers in the state. Employers in Tennessee, Utah, and West Virginia will indeed fund the expansion of benefits resulting from recent legislation.
The granting of UI benefits when an employee resigns because a spouse is transferred is an interesting public policy issue. As a practical matter, part of the cost of relocation (lost wages) has been shifted to employers who are already adversely impacted by losing the employee, and who had no control over the employee’s decision to resign. Perhaps overlooked is the fact that the employer whose worker has relocated now has the burden of hiring and training a replacement.
Clear to us is the fact that public sentiment has shifted since 2008 to providing more financial support for workers who are compelled to resign for legitimate family reasons. As a result, a whole new pool of UI eligible individuals has been created in a relatively short period of time.
A raft of state legislation to grant UI benefits in certain voluntary quit situations has occurred during and in the aftermath of a recession, but the statutes will remain in force when the recession is a distant memory. In most states the long-term impact of this broad expansion of UI benefit eligibility will be UI tax rates that are consistently higher than pre-recession levels.
As always, if there are any questions please contact us.
