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South Carolina State Legislature-Enacted Changes to Employee Unemployment Benefits
Puts Pressure on Tourism Industry Prompting Some to Hire Fewer Workers

By Jake Spring, The Sun News, Myrtle Beach, S.C.McClatchy-Tribune Regional News

March 27, 2011--State legislature-enacted changes to the way employers contribute to unemployment benefits are putting pressure on the tourism industry's bottom line and are leading some to hire fewer workers, Grand Strand hospitality business operators say.

Relief may or may not be on the way this year, according to elected officials. The General Assembly upped contributions for employers that have higher turnover to help balance the state's unemployment benefits trust. The changes took effect Jan. 1.

The contributions are placing a burden on tourism-related businesses, which have a naturally high turnover rate because many summer season workers are laid off each fall, business operators say.

Oceana Resorts is expecting to pay $250,000 more in 2011 for the benefits, General Manager Frans Mustert said. The resorts will probably hire 10 to 15 fewer temporary workers this tourist season as a result, he said.

"It is a lot more severe than people think or know about," Mustert said. "There's just no way in the world people can hire people."

The Hampton Inn & Suites Oceanfront also will contribute more to the unemployment benefits trust as a result of the formula change, although he's not sure how much more, General Manager Tom Moore said. The hotel isn't in a position to hire fewer workers and will need to swallow the costs.

"We just have to pay the price," Moore said. "People expect to have service and you've got to give them service."

Gov. Nikki Haley defended the changes as necessary to avoid taking out further federal loans to support the benefits trust during a town hall meeting earlier this month in Socastee. But the governor also said the law needed to be tweaked so that seasonal workers don't qualify for unemployment benefits.

"Governor Haley is continuing to work with Senator Greg Ryberg, House Majority Leader Kenny Bingham and General [John] Finan at [the S.C. Department of Employment and Workforce] to figure out what we can do to relieve the pressure on some businesses -- and to make sure we don't give unemployment benefits to people who shouldn't get them," said Rob Godfrey, Haley's spokesman, in a statement last week.

Water park Wild Water & Wheels in Surfside Beach will pay $75,000 more this year toward unemployment benefits, said Mark Lazarus, who raised the issue at the Socastee town hall.

"I don't understand why the system is broken like it is," Lazarus said in an interview with The Sun News last week. "We all pay a tremendous [amount] into the system and to arbitrarily raise our rates is just not right."

Lazarus said he has been talking to Horry County's legislative delegation and hopes a law will be passed soon that would bring relief to businesses.

There will be discussions in coming weeks of possible changes to the law that would bring relief to hospitality businesses, said Sen. Luke Rankin, R-Myrtle Beach. But if one industry or group of businesses pays less, someone is going to have to pay more to make up for it, he said.

"We're working to get relief and improvement of their current treatment with the caveat that [if] we push in one area, there will be a pull back in the other," he said.

Some seasonal workers do need unemployment benefits because there just isn't enough work, Rankin said, but those who could work but do not should not be eligible for benefits. Other changes should also be made to refine the law, so that those who can't work because of, for example, drug or alcohol problems, shouldn't get benefits, either.

It's possible the law could be changed during this year's legislative session, but Rankin said it's unclear whether the legislature will reach a consensus.

makes the budget

The state House of Representatives included $5.4 million for destination-specific marketing, as was expected, in the budget bill it passed earlier this month.

The bill passed the House on March 16 and it is being considered by the Senate.

The destination specific marketing program, commonly called the $2-for-$1 marketing program, matches every $2 in privately raised money for tourism promotion with $1 in public funding. The S.C. Department of Parks, Recreation and Tourism administers the program and awards the money to a destination's designated marketing organization, which is the Myrtle Beach Area Chamber of Commerce for the Grand Strand.

Contact JAKE SPRING at 626-0310 or follow him at


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