Important Pennsylvania Unemployment Compensation Law Changes

By Michael W. McGurrin, Esquire

In January, Pennsylvania implemented several changes to its Unemployment Compensation Law (“the Law”). Of these changes, two stood out to us as being noteworthy. The first is the addition of an “Active Search” requirement and the second is a reduction of Unemployment Compensation benefits to offset severance payments.

Unemployment Benefits Hinge on “Active Search”

The first notable change is the “Active Search” requirement. The former law required that individuals seeking unemployment benefits be “able and available for suitable work,” but the new Act requires “an active search for suitable employment.” The burden now is on the individual to show efforts in making an actual search for available employment rather than just being available for suitable employment. The responsibility to define the minimum requirements for an active search has been given to the Department of Labor and Industry. However, the statute does recognize that the requirements should be adaptable, taking into account how a job search is usually conducted in the individual’s line of work. The Active Search guidelines are available in full on the Pennsylvania Department of Labor and Industry’s website.  In order to be considered engaged in an active search for suitable work, an individual must 1) register with CareerLink; 2) post a resume on the unemployment compensation database; and 3) apply for jobs on the system’s database located within a 45 minute commute of one’s home. An unemployed individual must also keep a record of their job searching activities. The Active Search requirement does not apply to laid-off individuals who have been promised by their employer that they will be rehired within 28 days of being laid-off.

Unemployment Benefits Now Reduced by Severance Pay

Severance pay is defined by law as “one or more payments made by an employer to an employee on account of separation from the service of the employer, regardless of whether the employer is legally bound by contract, statute or otherwise to make such payments.” As revised, the Law provides that an individual’s weekly unemployment benefits are to be reduced by “the amount of severance pay that is attributed to the week.” In accordance with the changes, an individual’s unemployment compensation benefits will be offset by the amount of severance benefits in excess of 40% of the “average annual wage”, which is $17,843 for 2012.  This means that an individual can receive $17,843 in severance pay before unemployment compensation payments are affected. Any additional amount of severance over $17,843 is then used to reduce the individual’s unemployment benefits. The severance offset does not, however, include payments for retirement, pension, accrued leave, or supplemental unemployment compensation benefits.  Moreover, the new amendment expressly states that any severances paid by an agreement reached before January 1, 2012 are not subject to the changes effective January 1, 2012.

Call the Pennsylvania Workers’ Compensation Attorneys at Galfand Berger for More Information

The loss of a job can be a very stressful time. Understanding your rights to unemployment benefits is very important, but sometimes extremely confusing. The Philadelphia Workers’ Compensation lawyers at Galfand Berger are here to help.  If you, a friend or family member has been laid off, and have questions about your rights (or need representation at an unemployment compensation hearing) call our firm at 1-800-222-USWA (8792) or contact us online.  With offices in Philadelphia, Bethlehem, and Reading, Pennsylvania, our workers’ compensation and labor attorneys are available to meet with clients throughout Pennsylvania and South Jersey.