Administration-Business-Labor Reach Agreement on Unemployment Insurance

- Strengthens Misconduct Provisions for Fraud, Abuse and Negligence -
-- Eliminates $470 Million Tax Increase & $300 Million Benefit Reduction -
--- Better Protects Social Security-eligible Workers ---

SPRINGFIELD - Governor Bruce Rauner announced today that his administration has reached an agreement with business groups and labor organizations to reform and improve Illinois' unemployment insurance system.

"We have a lot of work left to turn around Illinois, but today's agreement is a step towards making us more competitive so we can increase investment in the state and grow jobs," Governor Rauner said. "I want to thank the legislators involved in crafting this agreement and urge the legislature to swiftly pass legislation and send it to my desk."

"For more than 30 years, governors and legislative leaders have brought business and labor together to negotiate changes to Unemployment Insurance for the benefit all in the state of Illinois," Illinois AFL-CIO Secretary-Treasurer Tim Drea said. "Because it is so vital to the economy and safety net for working families, Unemployment Insurance negotiations are always difficult, but all parties were committed to the process and an equitable agreement was achieved."

"On behalf of the employer community, we would like to thank our counterparts in labor, the Rauner Administration and the representatives of the four legislative caucuses who all played valuable roles in reaching this agreement," said Rob Karr, President & CEO of the Illinois Retail Merchants Association. "While the discussions were rigorous, they were always fair and ultimately productive."

Under the agreed framework an individual would be ineligible to receive unemployment insurance benefits following separation with an employer if a worker:

• Damaged an employer's property through grossly negligent conduct;
• Consumed alcohol, illegal or non-prescribed drugs during work hours in violation of an employer's policies;
• Provided false information in an employment application;
• Endangered the safety of himself/herself or co-workers through grossly negligent conduct;
• Knowingly and repeatedly violated reasonable written attendance policies of an employer;
• Refused to obey an employer's reasonable and lawful instructions unless the refusal is due to the lack of ability skills or training of the worker or if the instruction would result in an unsafe act; or
• Did not maintain required licenses, registrations and certifications required by law for the specific job.

Under current law, a worker could still be eligible for unemployment insurance benefits if any one of the above items occurred in the workplace. For the first time ever, these common-sense reforms will be implemented, creating a more fair and stable unemployment insurance system.

Additionally, the framework allows recently separated workers who are eligible for Social Security to receive a full unemployment insurance benefit. Under current law, 50 percent of the amount an older worker receives for Social Security is subtracted from the potential unemployment insurance benefit. Illinois and Minnesota are the only two states in the nation to allow this practice. This reform will return $25 million to Illinois seniors.

Governor Rauner had made strengthening misconduct and abuse provisions central components of his unemployment insurance reform proposal.

Today's news follows a number of recent announcements the Administration has made regarding its efforts to make government less expensive, more effective and more efficient.

Earlier today, the Rauner Administration announced a bi-partisan agreement to strengthen the Child Care Assistance Program. Last month, the Administration put forward a plan to save taxpayers more than $200 million by better utilizing the James R. Thompson Center property in Chicago as well as a breakthrough in the long-delayed 10th street rail project in Springfield.

Additionally, a labor agreement with the Teamsters Union has been ratified, and the administration has agreed to terms on new four-year collective bargaining agreements with the International Union of Operating Engineers, the United Association of Journeymen and Apprentices of the Plumbing and Pipefitting Industry, and the International Association of Machinist and Aerospace Workers.

The Administration has also detailed ongoing agency-led reforms that are saving taxpayers more than $100 million and improving customer service inside state government.

"Our Administration will continue to partner with anyone who shares our commitment to growing jobs in Illinois and delivering value for taxpayers," Governor Rauner said.