Important changes to Maryland Unemployment Insurance Law Effective Next Year

Maryland unemployment law divides misconduct into three “degrees” – misconduct, gross misconduct and aggravated misconduct.  The penalty for ordinary misconduct is current a loss of 5-10 weeks of benefits, while gross misconduct (defined loosely as conduct that manifests gross indifference to the employer’s welfare or constitutes a repeated rule violations manifesting a deliberate and wanton disregard for the employee’s obligations) carries an absolute bar to benefits until the worker has become re-employed and earned 20 times her weekly benefit amount in wages.

Effective March 1, 2011, the penalty for misconduct will be 10 to 15 weeks in benefits and for gross misconduct the absolute bar will continue until the worker has earned 25 times her weekly benefit amount in wages.

While I do not currently have access to the legislative history on these changes in Maryland’s General Assemby, the severe strain on the funding base of the Division of Unemployment Insurance has received a lot of press.  This strain should surprise no one; unemployment is very high, many workers stay unemployed for a long time and are more likely both to apply for benefits and to exhaust them.  The rates charged to employers have risen substantially and employers are simultaneously more likely to receive contested claims, and are conversely more likely to contest claims.  The stakes are high all over, and the enhanced penalties for misconduct/gross misconduct will provide additional incentive for workers to challenge misconduct allegations by management.

It is not clear to me when the new statute will take effect.  The law applies effective March 1, 2011, but I don’t know whether that date is for the dates of alleged acts of misconduct, date of termination, benefits filing date, date of the findings of misconduct or of the writing of an opinion re same, etc.  I’d like to think that the new penalty would only apply to misconduct occurring after that date, not for determinations after that date.  Otherwise by dragging out an appeal, an employer could get a more severe sanction against a worker after that date.  But we shall see; the legislative history may make this clear in a way that the statute sections themselves do not.