COMMITTEE ON LEGISLATIVE RESEARCH
OVERSIGHT DIVISION
FISCAL NOTE
L.R. No.:2780H.01I Bill No.:HB 1281 Subject:Employment Security; Department of Labor and Industrial Relations; Employees -
Employers; Unemployment Compensation; Labor and Management
Type:Original Date:March 11, 2025Bill Summary:This proposal modifies provisions of the employment security program and
establishes the "Employment Security Program Integrity Act of 2025",
relating to the administration of unemployment compensation.
FISCAL SUMMARY
ESTIMATED NET EFFECT ON GENERAL REVENUE FUNDFUND AFFECTEDFY 2026FY 2027FY 2028Total Estimated Net
Effect on General
Revenue $0$0$0
ESTIMATED NET EFFECT ON OTHER STATE FUNDSFUND AFFECTEDFY 2026FY 2027FY 2028Total Estimated Net
Effect on Other State
Funds $0$0$0
Numbers within parentheses: () indicate costs or losses. L.R. No. 2780H.01I
Bill No. HB 1281
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BB:LR:OD
ESTIMATED NET EFFECT ON FEDERAL FUNDSFUND AFFECTEDFY 2026FY 2027FY 2028Unemployment
Insurance Trust Fund*$0 to Could exceed
$637,000
$0 to Could exceed
$637,000
$0 to Could exceed
$637,000
Total Estimated Net
Effect on All Federal
Funds
$0 to Could exceed
$637,000
$0 to Could exceed
$637,000
$0 to Could exceed
$637,000
*Oversight reflects the potential savings due to the denials of unemployment compensation
payments for claimants who did not properly comply with work search requirements set by this
proposal.
ESTIMATED NET EFFECT ON FULL TIME EQUIVALENT (FTE)FUND AFFECTEDFY 2026FY 2027FY 2028Total Estimated Net
Effect on FTE 000
☐ Estimated Net Effect (expenditures or reduced revenues) expected to exceed $250,000 in any
of the three fiscal years after implementation of the act or at full implementation of the act.
☒ Estimated Net Effect (savings or increased revenues) expected to exceed $250,000 in any of
the three fiscal years after implementation of the act or at full implementation of the act.
ESTIMATED NET EFFECT ON LOCAL FUNDSFUND AFFECTEDFY 2026FY 2027FY 2028Local Government$0$0$0 L.R. No. 2780H.01I
Bill No. HB 1281
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FISCAL ANALYSIS
ASSUMPTION
Officials from the Office of Administration, the Department of Labor and Industrial
Relations, and theeach
assume the proposal will have no fiscal impact on their organization. Oversight does not have
any information to the contrary. Therefore, Oversight will reflect a zero impact in the fiscal note.
Section 288.050 Benefits denial due to noncompliance (work search)
Upon further inquiry, DOLIR assumed that there could be some potential savings due to the
claims being denied for non – compliance with the proposal.
Oversight notes that this proposal adds an additional reason where the claimant could be denied
for improper work search and denied for unemployment benefits for certain weeks.
Oversight notes the new requirement, where the employee/clamant could be potentially denied
for unemployment payment due to not showing up, calling, or contacting a potential new job,
would yield some savings to the unemployment trust fund.
Oversight notes that the pie chart graph below indicates that around 1.95% of people being
improperly paid unemployment benefits, each year, are claimants who did not properly search
for work.
Oversight notes that three-year improper payment estimate according to the DOL for Missouri
was $98,314,915 in the same period. ($32.7 million on average per year)
The most prevalent reasons for overpayments:
Source: U.S. Department of Labor Causes for Improperly Paid Benefits
Oversight notes this could potentially provide savings to the unemployment trust fund where
claimants not complying with the proposal will not be paid their weekly benefits. Therefore,
Oversight will reflect a range from $0 (claimants complied with the work search requirements) to L.R. No. 2780H.01I
Bill No. HB 1281
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could exceed $637,650 ($32,700,000 x 1.95%) where claimants did not comply with the work
search requirements, to the unemployment trust fund in the fiscal note.
Section 288.104 "Employment Security Program Integrity Act of 2022"
Oversight notes that the Department of Higher Education and Workforce Development
(DHEWD) currently has jobs.mo.gov link for potential employees seeking jobs and connect with
employers throughout the Missouri. However, this proposal would require the DOLIR - Division
of Employment Security (DES) to expand its current processes for matching job opportunities to
the Unemployment Insurance claims to include the facilitation of contact between claimants and
employers while monitoring the responsiveness of claimants to job referrals.
Oversight notes that DES currently cross-matches unemployment records against the National
Directory of New Hires and the State Directory of New Hires. Moreover, the DES currently
accesses the Integrity Data Hub if needed which provides critical cross-matching functionality to
combat the challenges and urgencies of UI fraud.
Oversight notes the Payment Integrity Information Act (PIIA) of 2019, requires programs to
report an annual improper payment rate below 10 percent, and the UI program established a
performance measure for states to meet the 10 percent requirement. The Missouri improper
payment rate projected between July 1, 2020 - June 30, 2023 reached 8.91% ( Payment
Accuracy).
Oversight will note the proposal, Section 288.104, will have no fiscal impact on their
organization. Oversight does not have any information to the contrary. Therefore, Oversight will
reflect a zero impact in the fiscal note. L.R. No. 2780H.01I
Bill No. HB 1281
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FISCAL IMPACT – State GovernmentFY 2026
(10 Mo.)
FY 2027FY 2028UNEMPLOYMENT INSURANCE
TRUST FUND
Cost Avoidance – DOLIR- §288.050 –
improper work search unemployment
payment not being paid – p.3
$0 to Could
exceed
$637,000
$0 to Could
exceed
$637,000
$0 to Could
exceed
$637,000
ESTIMATED NET EFFECT ON
THE UNEMPLOYMENT
INSURANCE TRUST FUND
$0 to Could
exceed
$637,000
$0 to Could
exceed
$637,000
$0 to Could
exceed
$637,000
FISCAL IMPACT – Local GovernmentFY 2026
(10 Mo.)
FY 2027FY 2028$0$0$0
FISCAL IMPACT – Small Business
A direct fiscal impact to small businesses would be expected as a result of this proposal.
FISCAL DESCRIPTION
This bill adds to the reasons a claimant is disqualified for unemployment compensation by
adding that if the designated representative of the Division of Employment Security (Division)
within the Department of Labor and Industrial Relations finds that a claimant failed to appear for
a scheduled job interview or skills test. The bill also revises the method of notifying the claimant
by deleting the current requirement of certified mail and referring to notification in writing or by
email or telephone. The Division must establish a method allowing employers to report by email
or telephone individuals who do not accept or respond to offers of employment or do not appear
for scheduled interviews or tests.
This bill establishes the "Employment Security Program Integrity Act of 2025" and defines terms
such as "Employment security rolls", "National data check system", "New-hire records", and
"Welfare agency" for the purpose of this Act.
The bill specifies methods for verifying the identity of unemployment compensation benefit
claimants, including multi-factor authentication. L.R. No. 2780H.01I
Bill No. HB 1281
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This bill allows the Division to pursue the recovery of fraudulent or improper unemployment
compensation benefits overpayment. The Division is required to provide an annual report to the
General Assembly each year, by December 31st, describing improper unemployment
compensation benefit payments and their recovery efforts. The Division is authorized to enter
into a memorandum of understanding with other state entities to share and receive the necessary
information. This bill allows for the promulgation of rules and regulations by the Division for the
administration of this section.
This legislation is not federally mandated, would not duplicate any other program and would not
require additional capital improvements or rental space.
SOURCES OF INFORMATION
Office of Administration
Department of Labor and Industrial Relations
Office of Administration - Administrative Hearing Commission
Julie MorffJessica HarrisDirectorAssistant DirectorMarch 11, 2025March 11, 2025