For the second time in three months, the Executive Director of Affiliated Construction Trades (ACT) Ohio testified before the Ohio House of Representatives Insurance Committee, in opposition to House Bill 394 (“HB 394”).
If it becomes law, the bill to reform unemployment benefits will greatly harm the construction industry by severely curtailing the amount of benefits their skilled workers will receive.
During his Jan. 19 testimony, Matthew A. Szollosi, Executive Director of ACT Ohio, urged lawmakers to make changes to the bill. (Click here for his full testimony.)
While Szollosi does not disagree with the premise of HB 394 – to build a balance in the State’s unemployment trust fund in order to withstand the next economic downturn – he pointed out it does not address the fund’s current $875 million deficit. The provisions in this legislation, he argues, are to help avoid future federal tax penalties for not paying back a loan incurred during the Great Recession.
Construction leaders from around the state are worried passage of HB 394, as it stands, will lead to a mass exodus of workers – both union and non-union, from construction industry.
Szollosi and industry leaders representing contractors, union and non-union workers, submitted letters vigorously opposing changes to benefit eligibility including the number of weeks individuals can receive benefits, a waiting week attached to the benefits, the loss of the current three-tier dependency classification and having to work in three of the most recent four quarters to receive benefits.
“The lack of understanding when identifying the ramifications to the construction workforce is both troubling and perplexing, especially when considering construction association executives participated in a meeting about unemployment compensation with the Administration several years ago, and one of the House Unemployment Compensation Debt Study Committee hearings was held at a construction apprenticeship training center,” Ashley and VanFossen wrote.
Industry leaders are frustrated lawmakers do not grasp the seasonality of Ohio construction work and its direct link to unemployment. Layoffs are a common occurrence in the industry as jobs are completed and workers can remain unemployed while waiting for their next job to begin. These factors, and the unpredictable weather, are big reasons for the higher rate of unemployment among construction workers as compared to workers in other industries.
“Restricting construction workers’ access to unemployment compensation would seriously jeopardize their ability to treat construction as a viable career, which would exacerbate a growing workforce shortage in our industry,” Linville stated.
In his testimony, Szollosi pointed out the current overall valuation for commercial projects in Ohio (pre-bid) is $32 billion and just over $5 billion for civil projects (pre-bid).
These numbers make the construction industry a major component of Ohio’s economy.
If workers leave the industry, the state’s economy will take a major hit.
In a prior letter to the committee, Szollosi stated there is a major difference between an unemployed construction worker and someone in any other industry. He wrote that in construction, unemployment and layoffs are a regular and necessary occurrence.
During his testimony Szollosi said anything less than 26 weeks of unemployment benefits will hit construction workers disproportionally hard.
He called the new, low dependency rate disastrous and said the new earnings requirement will lead many skilled tradesmen and tradeswomen to look for work in other industries.
Additionally, Szollosi pointed out that the waiting week proposal will hurt workers who go out on a short call. This penalty, he said, is unduly burdensome and hits the construction industry disproportionately severe. It will penalize workers and keep them on unemployment benefits longer than the current rules.
Top ranking officials from the following eight organizations signed a letter opposing HB 394 and stated the current bill will only serve to magnify current issues facing the industry:
- AGC of Ohio
- Ohio Aggregates & Industrial Minerals Association
- National Electrical Contractors Association of Ohio
- Transportation Advocacy Group of Northwest Ohio
- Mechanical Contractors Association of Ohio
- Builders Association of Eastern Ohio & Western PA
As the watchdog of Ohio’s construction industry, ACT Ohio will continue to its vigilance in support of actions and measures that positively impact the construction industry through monitoring and lobbying at the state government level.