Unemployment compensation-drug testing.

13LSO-0162.L1

FISCAL NOTE

	FY 2014	FY 2015	FY 2016
NON-ADMINISTRATIVE IMPACT
Anticipated Expenditure (Decrease):
UNEMPLOYMENT TRUST FUND	1,193,400	1,193,400	1,193,400

Source of Expenditure Decrease:

Reduction in unemployment insurance (UI) benefit payments to select claimants who become ineligible for program benefits due to failed Wyoming Department of Workforce Services (DWS) required drug tests.

Assumptions:

There are two provisions in the bill for which an individual UI claimant may be denied benefits for drug related work misconduct.  Under the first proposed provision (W.S. 27-3-322 (a) (i)), it is the employer’s obligation to prove employee misconduct and that the misconduct justifies a discharge.

The DWS estimates less than 5% (about 1,500) of total UI claimants are deemed not eligible for benefits due to a positive result from employers’ required drug tests.  Of these, 100 or fewer claimants per year may still receive UI benefits after failing an employer’s drug test because of an employer’s inability to satisfactorily prove an employee's misconduct.

In regards to the second proposed provision (W.S. 27-3-322 (a) (ii)), the U.S. Department of Labor (DOL) is developing an approach to identifying the occupations that regularly require drug testing as a prelude to developing the required regulations for the UI program. DOL’s guidance has yet to be released. Benefits paid for this portion of the legislation cannot be quantified at this time.

Therefore, based the potential of 100 claimants per year who might receive UI benefits under the first proposed provision the DWS estimates that up to $1,193,400 in UI benefit payments would not be paid from the UNEMPLOYMENT TRUST FUND if these claimants were deemed ineligible by the first provision (maximum weekly benefit amount = $459 for up to 26 weeks = $11,934 per person, per year; times (x) 100 claimants per year).  This amount assumes that all claimants tested by DWS would fail the drug test to remain eligible for benefits. 

Please note that the DWS estimates that it could cost up to $4,000 from the employment security revenue FUND to administer a contract for the 100 drug tests for these claimants (100 claimants x $40 per test = $4,000).  The DWS can cover the costs of these tests at this time.  However, if increased testing is required in the future, the DWS may require additional appropriations.  This cost may be considered an administrative cost but is listed here for consistency. 

Prepared by:    Michael Swank, LSO                   Phone:     777-7881

(Information provided by Hayley Douglass, Wyoming Department of Workforce Services, 777-8229)