Bill Limiting Unemployment Compensation Passes Tennessee House

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Published May 5, 2021

By Jon Styf [The Center Square contributor] –

The Tennessee House passed legislation Tuesday that would limit unemployment compensation from the state to 12 weeks while increasing the weekly pay for the first time since 2001.

Tennessee Capitol Building in Nashville

House Bill 1039, which would go into effect Dec. 1, 2023, has been sent to the Senate for discussion Wednesday.

House sponsor Rep. Kevin Vaughan, R-Collierville, said the bill was intended to create solvency for the state’s unemployment trust fund. The changes in the bill would amount to an estimated savings of $33.5 million annually because of the reduction of weeks of benefits.

Rep. Jason Zachary, R-Knoxville, said 247,000 jobs are available on the website that businesses are having a hard time filling.

“We are not Washington,” Zachary said. “We cannot print money. We have to ensure the solvency of this. … Unemployment is a bridge to the next step.”

The Senate version of the bill passed the Senate’s Finance, Ways and Means Committee on Tuesday. The House version of the bill would boost unemployment benefits by $25 for all claimants, while a Senate amendment would raise benefits by at least $25 for all but $50 for those who made more than $26,000 per year before becoming unemployed.

“Unemployment is meant to be a transition,” Senate sponsor Jon Lundberg, R-Bristol, said in committee. “So, right now, Tennessee has the second-lowest amount that we pay. At the same time, we have the longest period that someone can remain on unemployment, 26 weeks, that’s six months. Almost every study says that someone who is unemployed for six months is not going to reenter the job market. It’s too long.”

If the state’s unemployment rate rises above 5.5%, unemployment benefits would be extended one week for every 0.5% it rises but capped at 20 weeks.

“This is a significant decrease in what’s going on in unemployment and one that we take seriously in a year following one where more Tennesseans accessed this than probably has happened in our history,” said Sen. Jeff Yarbro, D-Nashville.

Several Democratic lawmakers disputed that Tennesseans were not reentering the workforce. Rep. John Ray Clemmons, D-Nashville, said that the maximum pay coming from Tennessee, not counting the current $300 weekly federal supplement that runs into September, amounted to $6.88 per hour, or $13,200 a year.

“Let’s stop this false narrative that people are sitting at home because they can make more on unemployment,” Clemmons said. “… Unemployment should work for working Tennesseans.”

Vaughan, however, said there are plenty who have taken advantage of the unemployment payments and then have been a no-show on interviews and simply gone through the motions of applying for jobs to qualify for benefits.

“With every entitlement program, there will be waste, fraud and abuse,” Vaughan said. “It isn’t everyone, but there are examples out there that we all need to be cognizant of.”

Rep. Eddie Mannis, R-Knoxville, said Amazon recently announced 750 new jobs in Knox County, but the facility certainly will have issues filling those roles like many of the state’s other employers.

“We don’t have the workforce to fill the jobs we have,” Mannis said in support of the legislation. “The false narrative is that there are not jobs to fill the workforce that we have.”

Vaughan agreed with Rep. Antonio Parkinson, D-Memphis, that a large number of constituents have reached out with issues related to accessing unemployment benefits. Vaughan, however, said the bill was not a referendum on the work of the Tennessee Department of Employment Security.

“We are leaving out the human factor,” Parkinson said. “It’s insulting to say that someone wants to make a lifestyle out of the crumbs that they receive from Tennessee on unemployment benefits.

“What we’re doing couldn’t be at a worse time. … It’s just bad business for our citizens. We’ve given millions and millions of dollars to businesses coming into this state. Ain’t nobody talking about cutting the incentives or the corporate welfare.”

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One thought on “Bill Limiting Unemployment Compensation Passes Tennessee House

  • May 6, 2021 at 2:48 am

    I was just at our local Dollar General and they are hiring and had 8 applicants and none showed up for interview. Manager said common as unemployed need to apply for two jobs a week but that doesn’t mean they have to go to interview. Paying people not to work doesn’t incentivize getting a job. Watched my dad use/abuse it.


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