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Bill would create seasonal workers exemption for unemployment benefits

By HEATHER GANN, Alabama Daily News

MONTGOMERY, Ala.– A bill pending in the Alabama Senate would let businesses designate jobs as seasonal, exempting them from the state’s unemployment benefits.

Senate Bill 100 says that seasonal jobs are those that last six months or less. It is one of several bills deemed priority legislation by the Alabama Small Business Commission.

Sponsor Sen. Chris Elliott, R-Daphne, told Alabama Daily News the bill could get a Senate vote this week. He is working on a substitute that will narrow the industries that can use the seasonal designation to those in the tourism, restaurant and hospitality sectors.

“I think we’ll see a limiting of that so that (the Alabama Department of Labor) can get its arms around it a little bit better and so that employers are a little clearer on what does and does not qualify for seasonal employment,” Elliott said.

Labor spokeswoman Tara Hutchison this week said the department is working with Elliott on some modifications to further define a seasonal employer to protect the true intent of the bill.

The bill requires the Alabama Department of Labor to come up with a seasonal employee designation for employers and allow them not to pay the state’s unemployment tax on those jobs. That tax revenue goes into the Unemployment Insurance Trust Fund, which people draw from when they lose their jobs.

Elliott argues people shouldn’t get unemployment benefits for jobs they know are short term.

“The employer is not paying unemployment and you don’t get to claim it and everybody knows that up front,” Elliott said about his bill. “The job is approved as a seasonal job.”

Currently, people can file unemployment claims if they’ve worked in two of the last four quarters in the year.

Elliott’s district includes some of the state’s most popular tourist areas, which also attract seasonal workers.

“We have to make sure that the businesses in these areas can comfortably hire people for the busier seasons without having to worry about instability in their finances or experience ratings when they leave,” Elliott said.

Companies’ experience ratings can increase, causing them to pay a higher unemployment tax rate, if more former employees file unemployment claims.

The Alabama branch of the National Federation of Independent Businesses strongly supports this bill, with 82% of members voting yes during their yearly ballot of priorities.

“This is not only beneficial to the business owners, but to the employees,” said Rosemary Elebash, state director of the NFIB. “This bill would allow high schoolers to get that first seasonal job to gain experience or allow a business owner to preview an employee’s work and then offer them a full time position down the road,”.

The bill doesn’t require any employers to label any jobs as seasonal and it wouldn’t impact year-round employees.

Other Small Business Commission-endorsed bills include:

  • An income tax exemption for the first $10,000 of proceeds from a 401(k) or IRA for those 65 or older. Senate Bill 18 is sponsored by Sen. Arthur Orr, R – Decatur, and will be handled in the House by Rep. Lynn Greer, R Rogersville.

  • A state income tax exemption for those who received federal child tax credits, earned income tax credits, and child and dependent tax credits under the American Rescue Plan Act.  House Bill 147 is sponsored by State Rep. Jim Carns, R-Birmingham. A Senate version of the bill by Sen. Dan Roberts, R-Mountain Brook, was approved in that chamber last week.

  • An ad valorem tax exemption of up to $40,000 on the market value of business tangible personal property, which would provide businesses with a tax cut and reduce paperwork.  House Bill 82 is sponsored by State Rep. Danny Garrett, R- Trussville.

  • A $15 million appropriation from the Education Trust Fund to the Alabama Community College System for the newly established Innovation Center, which will provide workforce training skills in high-demand job sectors.  House Bill 135 is sponsored by Garrett, who chairs the Ways and Means Education Committee, and carried in the Senate by Orr, who chairs the Finance and Taxation Education Committee.

“Alabama is experiencing its lowest unemployment and best economy in history, and the bills in this package will help small businesses continue to thrive, expand, and provide new opportunities,” Lt. Gov. Will Ainsworth, chairman of the Small Business Commission, said in a written statement.

Alabama Daily News reporter Mary Sell Contributed to this report.

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