J. Eldred Hill, Jr. Award Recipient: Governor Kim Reynolds

Governor Kim Reynolds is the 43rd Governor of Iowa and has the distinction of being the first woman elected to the state’s highest office. She first became governor in May 2017. During her time in office, she has championed reforms that have transformed the unemployment insurance system in Iowa into one that now focuses on reemployment for Iowans.

Governor Reynolds led the country in recognizing the need to restore the balance in the state UI trust fund that had been depleted due to the COVID-19 shutdowns. Governor Reynolds deposited $490 million of CARES Act funds and $237 million of ARPA funds into the Iowa unemployment insurance trust fund.

The first action allowed employers to remain in Tax Table 7 for 2021, saving employers over $400 million in unemployment insurance taxes. In 2022, Governor Reynolds spearheaded the passage of House File 2355, which will reduce pay outs from the unemployment insurance trust fund by $75 million dollars annually.

Employers moved from Tax Table 7 to Tax Table 8 for 2023; the lowest tax table permitted by state law. This is the first-time employers have been in Tax Table 8 since 1999. Employers will see over $100 million in unemployment insurance tax relief in 2023 due to being in Tax Table 8. Employers will see, on average, a 25% reduction in their unemployment insurance taxes in 2023 compared to 2022.

Governor Reynolds ended Iowa’s participation in federal pandemic-related unemployment benefit programs on June 12, 2021.

In the face of the tremendous challenges posed by the COVID-19 pandemic and the impact on the state UI trust fund, Governor Reynolds provided leadership by acting in a timely and decisive way to restore solvency to the UI trust fund, provide relief to employers, and address the long term solvency of the state UI trust fund for unemployed workers and businesses in Iowa.

We are honored to recognize Iowa Governor Kim Reynolds with the J. Eldred Hill Jr. award for her leadership in Unemployment Insurance.

J. Eldred Hill, Jr. Award Recipient: Mario Poretto

Mario Poretto is the President and CEO of First Nonprofit (FNP), a division of The Amynta Group, a leading company in managing unemployment cost control and alternative funding programs for nonprofit, governmental and tribal employers.

Mr. Poretto spent more than 35 years serving in executive positions in the insurance and risk management industry with an emphasis on unemployment and workers compensation programs. He is a prominent member of the Association of Unemployment Tax Organization (AUTO) and works closely with UWC and the National Foundation for Unemployment Compensation and Workers’ Compensation.

Unemployment caused by the pandemic of 2020 and 2021 resulted in charges to reimbursing employer accounts that could not have been anticipated and in many cases would have exhausted reimbursing trust fund reserves. In the face of this historic challenge for non-profit and reimbursing employers, Mr. Poretto led the formation of the Nonprofit UI Relief Coalition to educate congress, governors, and state legislatures about the impact of the pandemic on non-profit employers and the need for relief from charges to employer accounts.

The coalition developed and implemented a plan that was successful in securing a 50% federal credit for reimbursing employer accounts in the CARES Act, a subsequent 75% credit pursuant to the Protecting Nonprofits from Catastrophic Cash Flow Strain Act, executive orders issued by governors, and state legislation to provide relief.

Without Mario’s leadership in this critical period, a majority of the nation’s reimbursing entities would have incurred crippling charges to their accounts. Mr. Poretto continues his dedication to ensuring that the Nation’s UI system protects employers, particularly those in the often overlooked non-profit sector.
We are honored to recognize Mario Poretto for his leadership in Unemployment Insurance.

J. Eldred Hill, Jr. Award Recipients: Senator Bob D. Hackett and Representative Mark D. Fraizer

The impact of the COVID-19 pandemic on Ohio’s unemployment system was unprecedented. Ohio’s unemployment rate increased from 4.7% in February 2020 to a peak of 17.4% in April 2020. And, unlike the great recession, the resulting unemployment claims rose overnight. The number of initial applications jumped from approximately 7,000 filed the week ending March 14, 2020, to 196,000 claims filed the week ending March 21, 2020, with another 275,00 initial claims the week after that.

Antiquated systems, historically low staffing levels, and the federal government’s implementation of four entirely new unemployment programs presented challenges. Despite these challenges, Ohio distributed approximately $24 billion in unemployment benefits to 2.4 million claimants in the first 18 months of the pandemic.

The Ohio General Assembly created a bipartisan council that examined Ohio’s unemployment system, from the technological infrastructure used by claimants and employers to the processes and people that ultimately ensure Ohioans received benefits.

In early 2021, the Unemployment Modernization and Improvement Council began meeting under the leadership of Senator Hackett and then Representative Fraizer. The Council established a framework that drove efforts to address emerging issues and lasting change.

Weekly council meetings helped maintain a regular cadence, allowing ODJFS to share updates on claims processing progress and customer service improvements. The Council brought together business owners, associations, customer service and security experts, and constituents to offer perspectives and recommendations for improvements, many of which were implemented. It was an invaluable partnership that provided a direct connection to constituent concerns and became an incubator for ideas and answers.

Sen. Hackett and Rep. Fraizer led the development of Senate Bill 302, which was passed by the Ohio Legislature on Dec. 14, 2022, and signed by Governor DeWine on Jan. 2, 2023. It codified several of the council’s recommendations and lessons learned into law, including:

• Establishing data-sharing agreements between ODJFS and several other state agencies for better identity verification and fraud prevention.
• Having an income eligibility and verification effort in place prior to launching any future federally mandated programs.
• Maintaining an online eligibility reporting portal for employers.
• Making changes to improve the appeals process.

It is our honor to recognize Senator Hackett and Representative Fraizer for their leadership in developing legislation and policy to improve the UI system.

 UI Integrity Award 2023: Jerry Pectol

Jerry Pectol has worked in the Unemployment Insurance field since being hired as a temporary employee in the Bartlesville Local Office at the Oklahoma Employment Security Commission (OESC) in 1986.

During his 25-year career with OESC, Jerry worked as a Claims Manager, Office Manager, Area Manager, and Call Center Chief.

From 2004 until his retirement from state service in 2011 Jerry was the Director of Unemployment Insurance for the State of Oklahoma. During that time, he managed many successful UI technology projects including a new Call Center system in 2004.

In July 2011 Jerry Pectol joined the National SIDES Team as a part-time liaison for the states and employers working to implement SIDES. In April 2013 Mr. Pectol joined NASWA as the Operations Director of SIDES and in September 2014 he became the SIDES Director. The SIDES Director is responsible for supporting a national Unemployment Insurance (UI) system to allow state UI agencies to communicate electronically with employers and their representatives referred to as Third Party Administrators (TPAs). Fifty of the fifty three state UI agencies and thirty of the largest Employer/TPAs, representing almost 50% of the national UI activity have committed to SIDES. Mr. Pectol is responsible for the SIDES system, directing and participating in the development and implementation of SIDES states. Jerry Pectol also facilitates and leads discussion at all SIDES training programs with states, employers, and third party administrators.

As SIDES Director, Jerry has diligently and continuously worked to improve and expand the use of all aspects of SIDES nationally. Jerry fostered the development of improvements to many of the SIDES Exchanges and has promoted the view of SIDES as a valuable integrity tool to protect state UI Trust Funds. Under Jerry’s leadership, the SIDES Operations Committee in coordination with the SIDES Leadership Team developed a Fraud Indicator in the Separation Information Exchange to assist state agencies and Third Party Administrators (TPA’s) and Employers (Integrated Partners) in addressing the rampant and insidious criminal fraudulent activity in the system. Jerry’s efforts to improve relations between TPA’s and State Agencies has also set the foundation for better trust and cooperation resulting in more effective Fraud and Improper Payment prevention.

For his years of service in fostering positive relations between states, employers and TPAS and his attention to development of tools in SIDES to address fraud and improve integrity, we are pleased to recognize Jerry Pectol with the UI Integrity Award.

Father Becker Award 2023: Phillip Hayes

Phillip Hayes has been THE Kansas UI expert since 2010, helping with significant restructuring of the UI tax structure, modernization efforts, and integrity solutions adopted by the Kansas Legislature since early 2000. As a business owner frustrated with significant SUTA fluctuations, Hayes began researching and educating himself on the various statutes governing Employment Security Law in Kansas and other states. Leading up to the Great Recession, it became clear all Kansas employers and employees would benefit from an updated and modernized unemployment system focused on predictability, certainty, and stability to meet the changing demands of the evolving employment landscape.

In 2010, Hayes established the KS Unemployment Insurance Reform Committee through KS SHRM and the KS Chamber of Commerce – and helped build the coalition needed to advocate for changes. Hayes’ expertise was extremely impactful and influenced initial reforms adopted in the early 2010’s. Further fueled by the state’s trust fund insolvency challenges and lingering SUTA tax impacts resulting from the Great Recession, his research and analysis continued, leading to the development of software models that simulate a variety of variables and scenarios regarding changes to the SUTA financing model.

Through his hours of research, Mr. Hayes was able to achieve the shared goals of taxation fairness, security in the trust fund, and a more predictable and consistent taxing system. Ironically, in 2015 when the financing reforms were pursued, state regulators felt Mr. Hayes’ changes carried potential risk to fund solvency. However, a year later, a majority of employers had lower taxes and the trust fund grew more quickly than expected, exceeding original projections.

Kansas was one of the worst hit states for UI fraud and abuse during the COVID-19 pandemic. More than 300,000 Kansans had their identities stolen and close to $600M in fraudulent payments were disbursed due to the antiquated UI system. Mr. Hayes led efforts to modernize the antiquated system, establish a fair bidding process, and helped in the vendor selection through his position on the UI Modernization Council, which was charged with ensuring completion of the modernization effort. Today, even after weathering the challenges and fraud occurring during the pandemic, the Kansas trust fund balance has grown to more than $1.3B, allowing most employers to enjoy a tax reduction that more fairly reflects their utilization of the system.

Overall, Mr. Hayes’ efforts have led to a more stable, sustainable, predictable and equitable unemployment insurance system for all KS employers. The UI reforms led by Mr. Hayes have and will continue to ensure UI program integrity, increased labor participation and re-employability. As much of the nation continues to debate UI reform, Kansas serves as a model state regarding what can be accomplished by having a champion lead while balancing practical policy with political reality. We are honored to recognize Phillip M. Hayes with the Father Becker Award for his major contributions to UI research and transformative impact in the state of Kansas.