SPRINGFIELD - In an attempt to restore Illinois' bankrupt
Unemployment Insurance (UI) fund to solvency status, labor
leaders, the Governor's staff, legislative caucus leaders and
representatives from business have been working diligently over
the past months to create an improved plan that will overhaul the
structure of the fund and prevent future financial problems.
Recently an agreement was reached that will help struggling
workers, restore security to the program and ensure fairness to both
labor and business.
The Illinois AFL-CIO and allied community groups demanded
several key reforms to the current system. Those changes include:
restoring the UI trust fund to financial health by changing the way
the program is funded; counting workers' most recent earnings
when considering eligibility; and allowing workers to leave their
jobs because of domestic violence.
"We have made substantive changes to the program that will
replenish and insure the viability of Illinois' Unemployment
Insurance fund," said Margaret Blackshere, president of the Illinois
AFL-CIO. "From the beginning of this agreed bill process, we
knew dramatic changes were necessary if the fund was to survive.
Labor's goal was to protect workers' benefit payments and to give
them easier access to the funds. We needed to modernize the
system to meet the challenges workers face today. I am proud to
say we accomplished our objectives."
To rebuild the UI program, which the Department of
Employment Security predicts will be $500 million in debt by
year's end, the tax rate and the taxable wage base that businesses
pay will increase. For the past 15 years, employers have paid UI
taxes on only the first $9,000 of an employee's wages. Beginning
in 2004, the amount of earnings subject to the UI tax will increase
yearly. By 2009, the taxable wage will be $12,300. And the tax
rate, which fluctuates due to economic conditions, will become
more sensitive to economic indicators and the balance of the trust
fund. Meaning, the rate will go up as unemployment