Legislature(1995 - 1996)
02/22/1996 01:40 PM L&C
* first hearing in first committee of referral
= bill was previously heard/scheduled
= bill was previously heard/scheduled
SL&C SB 261 UNEMPLOYMENT COMPENSATION CHAIRMAN KELLY called the Senate Labor and Commerce Committee meeting to order at 1:40 p.m. and announced SB 261 to be up for consideration. DWIGHT PERKINS, Special Assistant, Department of Labor, said SB 261 is their housekeeping bill. One of the areas it covers is income tax withholding on unemployment checks and makes it current with federal guidelines. Another is confidentiality of records allowing the Department to provide additional specific unemployment insurance information to other entities under strict disclosure and guidelines. Two provisions would provide important tools for collecting delinquent contributions. First, the Department would be authorized to require a deposit or bond from an employer who is at least two quarters delinquent in making contributions to the Unemployment Compensation Fund. The bill also allows the Department to enjoin a delinquent employer who refuses to post a bond or pay contributions from operating as an employer. These uncollectible accounts are currently being subsidized by the rest of Alaska's employers. The standard for waiving benefit overpayments would be changed from great hardship to equity and good conscience allowing other factors like the claimant's degree of good faith in claiming benefits and the claimant's detrimental reliance on the benefits. It would also permit the Department to right of uncollectible overpayments after two years. Practice has shown that most recoverable overpayments are collected within two years. The Department would be given clear authority to correct any determination during the benefit year of an unemployment claim increasing the accuracy of claim adjudication. MR. PERKINS continued saying a proposed amendment would provide a uniform 30 day time period (currently only 15 days) for filing appeals from any determination. This impacts rural parties unfairly. It would also clarify the legal affect of appeal decisions. Findings of fact and conclusions of law would not be binding in another proceeding. This is to prevent excess litigation based on the affect the Department's rulings may have on later civil litigation. This will help keep unemployment hearings speedy. Both the extended 30 day appeals period and the provision restricting the scope of the Department decisions address concerns of a recent legislative audit of the Unemployment Insurance Appeals process. MR. PERKINS said there were other minor and technical changes which would allow an insured worker to continue receiving benefits while attending the funeral of an immediate family member, require a worker to file a compensable claim for the week immediately before jury duty or attendance at a funeral in order to receive an eligibility exemption for those reasons, exempt extended benefit claimants from the work search requirement while attending an approved training course, correct the definition of waiting week from the Employment Security Act, and clarify treatment of cafeteria plan payments under the wage definition of the Act. SENATOR KELLY asked what was the cafeteria plan payment. RON TORGERSON, Hearing Officer, explained that this change simply clarifies the definition of covered wages to exclude the cafeteria land payments. It also brings the wage definition in the Employment Security Act into conformity with the federal wage definition. Number 103 SENATOR MILLER asked for an example of the waiving of standards of great hardship to equity and good conscience and for an overpayment procedure. MR. TORGERSON explained that the current standard in statute is great hardship. They are proposing a more flexible standard so they can consider the elements of good faith and honesty, etc. He emphasized that under the new standard a person will not be getting more benefits than he would normally. He said the overpaid benefits would be charged against the account; they would not be offset later in the claim which would be a form of payment recoupment. Number 174 SENATOR KELLY said their concern was fraudulent claims. MR. TORGERSON said in that case there is a restitution requirement. They prosecute those cases regularly and they have had 100 percent conviction rate, averaging 30 - 45 per year. In addition, there is a 50 percent penalty attached (which is diverted to the general fund). MR. PERKINS said their concern at this point is not when the employee is at fault, but when it is an error in over-calculations by the Department or some system error. SENATOR MILLER said he understood that it was the Department's problem, but he said the employer was the one who would eventually pay for it, if it happened often enough. MR. PERKINS said he understood his concern, but that this is a situation that doesn't happen regularly. MR. TORGERSON added that this is a low traffic problem, something the Department would like to do for people who really need this money and very often virtually require it for survival. Sometimes the hardship standard is too rigid. He reiterated that they recover over 90 percent of all non-fraud overpays. SENATOR MILLER said he understood and his concern was if there were a lot of them, it would affect the rate and the employer would have to pay eventually. MR. PERKINS said the Department was trying to be more customer oriented and give themselves more flexibility to help the claimant rather than to "come down on them." He repeated that they are right on top of the fraud situations and the non-fraud cases are over 90 percent repaid. SENATOR MILLER asked if this legislation were adopted, what would that bring the percentage down to. MR. PERKINS said he didn't think it would make one percentage point difference. The ones they have are visible - the ones members of the legislature get calls on. He didn't thing the public was being served fairly with this restrictive of a standard. Number 290 SENATOR KELLY asked how long a person is eligible for unemployment insurance. MR. TORGERSON answered 26 is the maximum with an extension of 13 more. SENATOR KELLY asked how long after 39 weeks you had to wait to go back on unemployment. MR. TORGERSON replied that you would have to wait until you could establish a new benefit year and you would have to have base period wages. SENATOR KELLY said they would set SB 261 aside.