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Big changes in store for Rhode Island unemployment

State lawmakers on Wednesday passed legislation that will allow people to work more hours while still collecting unemployment

Rhode Island Department of Labor and Training building in Cranston, R.I.RI DLT

PROVIDENCE — Rhode Island lawmakers on Wednesday passed legislation that will allow people to work more while still collecting unemployment.

Meanwhile, the state is preparing to put rules back into place that require people to search for work to stay in the unemployment system.

The two changes will take effect the same day later this month, working in tandem to try to solve a vexing issue for the economy: businesses that can’t find workers.

“We read about it every single day,” Matt Weldon, director of the state Department of Labor and Training, said in an interview Wednesday. “I hear from employers every day. It’s a national problem.”

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Weldon helped craft the legislation that passed the state House of Representatives Wednesday by a vote of 69 to 3.

Under the current law, people on unemployment who work part-time can still collect unemployment benefits. In those cases, their unemployment checks are smaller, but they’re still in the system, which is particularly important with the extra $300-per-week federal boost that was part of the COVID rescue package passed by Congress in March. But if they make more than their weekly benefit rate, they don’t get anything.

Some Rhode Island restaurants have said their part-time workers are curtailing their own hours because they don’t want to get booted from the system and lose the $300 boost.

The bill that passed Wednesday night would let them earn 150 percent of their benefit rate while still staying on unemployment — letting them keep the $300 weekly federal boost. It would also allow them to work more without having money for part-time earnings deducted from their benefits, from 20 percent up to 50 percent of their benefit rate.

That, according to supporters, will let people pick up more shifts without worrying about losing their connection to the safety net. The changes would expire at the end of June 2022.

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Companion legislation has also passed the Senate. Now the Senate will have to pass the House’s version. Governor Dan McKee is planning to sign the legislation next week.

State Representative Carol Hagan McEntee, a Democrat who represents Narragansett and South Kingstown, introduced the bill in the House. She said she’s still hearing from business owners in her district who are worried about finding workers to cover the busy tourist season. The bill could get more people back into the workforce and become a model for other states, McEntee said.

“We’ve come up with an answer for a national problem,” she said.

In a brief debate over the bill Wednesday before it passed, state Representative Barbara Ann Fenton-Fung, a Republican of Cranston, said she’d vote for it — even though she didn’t think it would do much, considering only 9 percent of people on unemployment are working part-time.

“We need to be bold,” said Fenton-Fung, who’s proposed her own legislation on the topic.

As of last week, there were nearly 70,000 people in Rhode Island collecting unemployment benefits.

The state will also soon reinstate requirements that people actively look for work to stay on unemployment, starting the same day the McEntee bill goes into effect: May 23.

Rhode Island had long required people to look for work while they were on unemployment, but the rules were suspended at the outset of the pandemic because there were few jobs available while everything was shut down.

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Those rules will go back into place on May 23. People won’t have to submit documentation about their work searches, but they’ll have to certify they’re looking for work every week. The Department of Labor and Training will randomly audit a number of claims every week, and people will have to show their documentation then. People will have to demonstrate that they are looking for work at least three times per week by doing such things as attending job fairs or registering for BackToWorkRI.com. The rules will be similar but slightly different for other, newer forms of unemployment assistance for business owners and gig workers.

There are exceptions to work-search requirements, some of them traditional and others new. For example, if one has a definitive return-to-work date within 12 weeks, they don’t have to search for work. Newer ones: People can remain on unemployment if they have child-care issues when schools close, or if they have to quarantine.

Sarah Bratko, lobbyist for the Rhode Island Hospitality Association, said in an interview that the workforce shortage was not just a major hurdle, but the major hurdle for getting the industry back on track. Even when COVID restrictions ease in the lead-up to Memorial Day weekend, many hotels and restaurants won’t be able to take advantage of it with the situation as it is.

“There’s not ever going to be one thing that addresses the workforce shortage right now,” she said. “It’s a matter of putting together different ideas and different paths forward to figure it out.”

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Brian Amaral can be reached at brian.amaral@globe.com. Follow him on Twitter @bamaral44.