OLYMPIA – The owner of a popular Kent eatery saw his unemployment insurance costs skyrocket by 500% due to the history of a failed restaurant in the same location. But Roger Stilson, who also owns two other successful restaurants, doesn’t think state law was intended to burden new businesses that open where others have failed. State Rep. Dave Upthegrove (D – Des Moines) agrees, and sponsored legislation to assist the business and clarify the law for this and similar situations.
“Here we have a business owner with a successful track record who is providing jobs and contributing to our local economy. Why should he have to pay more because of someone else’s failure? My bill clarifies predecessor-successor business relationships, so rates can be calculated appropriately,” Upthegrove said.
Upthegrove’s bill, HB 2491, passed the state House of Representatives unanimously yesterday.
Stilson, who opened Mama Stortini’s at Kent Station in 2009, came to testify in person before the House Labor and Workforce Development committee last month.
“We are good citizens. We did not fire people during the downturn; we hired people. Ninety people,” Stilson said in his testimony. “This bill as written will remedy this problem, which is very likely hurting other small businesses just like us.”
Stilson brought the issue to Upthegrove’s attention two years ago, and Upthegrove contacted the state Employment Security Department to request a reconsideration of Mama Stortini’s unemployment insurance rate, which he agreed was calculated erroneously. However, the state agency didn’t budge from its position, so Upthegrove decided to bring forward legislation to fix the problem.
Without legislative action, the restaurant may be stuck paying $50,000 per year more in unemployment costs than the industry average.
“If the law isn’t changed, there will be other small businesses unfairly hit by this,” Upthegrove said. “The intent of the existing law is to prevent employers from gaming the system, not to punish a thriving business that just happened to open at a particular location.”
The measure now heads to the state Senate for consideration.