NASHVILLE, Tenn. – State Senators approved legislation this week before adjourning the 2013 legislative session that continues the work done on unemployment compensation reform last year.   Before passage of the 2012 law, Tennessee did not have an efficient system in place to verify a claimant’s efforts of seeking employment while on unemployment benefits.  As a result of that new law, the Department of Labor is now required to conduct weekly audits to ensure that claimants are actively seeking work while on unemployment benefits.

“The Department found that claimants who are audited under the 2012 law, on average, return to work five times faster than those who were not,” said Senate Commerce and Labor Committee Chairman Jack Johnson (R-Franklin).  “This year’s legislation raises the number of audits to be conducted from 1,000 per week to 1,500 per week.”

Last year’s legislation also clarified the definition for misconduct as it affects unemployment insurance compensation so that a claimant who is consciously insubordinate, knowingly violates state regulations, has been caught stealing or is chronically absent could not  receive benefits.  Johnson said this year’s bill continues those efforts to define misconduct by adding to that definition any conduct that is constituted as a criminal offense for which the employee is seeking benefits. Senate Bill 783 applies to cases involving dishonesty that arose out of the claimant’s employment or that was committed while he or she was acting within their scope of employment.

“If an employee was fired for cause as a result of a conviction of a misdemeanor or felony, the bill removes the employee’s right to reconsideration of benefits currently in the law,” he added.

The legislation also helps ensure the solvency of Tennessee’s Unemployment Trust Fund by returning the base period benefits from the current level to pre-2009 stimulus funding, which required Tennessee to expand benefits.  According to the financial analysis, the total recurring savings to the Trust Fund is reasonably estimated to be over $50 million.

“This legislation continues our efforts to protect our worker’s compensation fund for the benefit of those who need unemployment benefits by curbing abuse of the system,” said Senator Johnson.  “Besides providing stability for the unemployment compensation fund, it also gives job creators the assurance that they need in knowing that we will address fraud and abuse to keep their unemployment insurance payments at the lowest rate possible.”