Benefits cliffs present unique challenges to Kentucky employers. Some employers report, for example, workers being hesitant to accept wage increases due to fears of how a higher income could affect their eligibility for public benefit programs. In other instances, employers report workers being hesitant to accept offers for additional paid hours or a transition from part-time employment to full-time employment due to these same concerns. These dynamics create significant staffing challenges for employers, particularly during periods of exceptional labor market tightness like what Kentucky has been experiencing since the onset of the COVID-19 pandemic. Equally as troubling, benefits cliffs limit upward mobility and trap Kentucky families in cycles of poverty and government dependence. The benefits cliff issue is a key concern of Kentucky’s business community. Addressing the issue was a top policy recommendation in the Kentucky Chamber Foundation’s report on the Kentucky workforce crisis in September 2021.
To help alleviate challenges related to benefits cliffs, the Chamber recommends the following policy concepts.

Download the Chamber's policy recommendations