Substitute House Bill No. 5280 seeks to amend unemployment compensation laws by reintroducing a noncharge provision for employers participating in the voluntary shared work program during periods of high unemployment or extended benefit periods. The bill inserts new language stating that, effective January 1, 2027, no base period employer's account will be charged for benefits paid to claimants through the shared work program during these specified periods. This noncharge provision will remain in effect until the United States Secretary of Labor notifies the Labor Commissioner that the high unemployment or extended benefit period has concluded. Additionally, the bill repeals and replaces subsection (c) of section 31-225a, which details the conditions under which benefits are charged to employers, introducing new stipulations that include exemptions for employers who continue to employ claimants or for benefits related to natural disasters.

The bill effectively reinstates a non-charge provision that was previously eliminated in 2025, which allowed employers to avoid increased unemployment insurance tax rates when the unemployment rate exceeded 6.5% for three consecutive months or during extended benefit periods. The previous law, PA 25-117, § 5, had removed this provision, which was designed to support employers and employees during economic downturns by enabling reduced work hours instead of layoffs, with affected employees receiving proportionally reduced unemployment benefits. The intent of HB 5280 is to encourage employer participation in the shared work program, thereby potentially reducing layoffs and associated costs to the Unemployment Insurance Trust Fund.