Legislature(2003 - 2004)
04/01/2004 01:37 PM Senate L&C
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* first hearing in first committee of referral
+ teleconferenced
= bill was previously heard/scheduled
+ teleconferenced
= bill was previously heard/scheduled
HB 305-UNEMPLOYMENT COMPENSATION BENEFITS
CHAIR CON BUNDE announced HB 305 to be up for consideration.
SENATOR RALPH SEEKINS moved to adopt SCS HB 305(L&C), version
\D, for the working document. There were no objections and it
was so ordered.
CHAIR BUNDE summarized the CS saying that Legislative Legal
Services advised using effective dates to make the bill more
efficient. Another change on page 14, line 24, says if someone
left suitable work voluntarily, was fired for good cause,
discharged for misconduct or failed to seek reemployment in a
comparable job, the five-week waiting period for benefits would
change to a 25-week waiting period. Another change increases the
amount of benefits to as much as $312. Alaska's rank would go
from 47 to 30 in the nation in unemployment benefits after the
final increase. This increases cost for employers also, but it
is slowly phased in through 2010.
REPRESENTATIVE TOM ANDERSON, sponsor, said the current bill is
the result of negotiations and a compromise by the
administration, labor organizations and those businesses
directly affected by the bill. Employee representatives are
concerned that the idea of leaving work voluntarily for whatever
reason is broad on page 14. If someone were fired unfairly,
making him wait for 25 weeks would be unfair. It's also viewed
that both versions don't affect hotel, restaurant and tourism
jobs in general, because the increase in benefits begins at a
wage of about $27,000 per year and most of those jobs are below
that.
REPRESENTATIVE ANDERSON said employees are an integral part of
the unemployment insurance system by contributing to the fund
themselves. Increasing the waiting period is not consistent with
the other two states that have a similar design that believe it
isn't right to punish the worker who pays under the system.
Mortgages and car payments are only some of the things that
could be in jeopardy and would adversely affect the employee. He
urged the committee to change the waiting period or the
definition of good cause for discharge in the CS.
CHAIR BUNDE suggested working with his staff to tighten up that
language to avoid someone being treated unfairly.
SENATOR SEEKINS asked if good cause is defined currently in
regulation.
REPRESENTATIVE ANDERSON answered that he assumed it was defined
some place and suggested using a computer search to find all the
places.
SENATOR FRENCH asked where the 25-week waiting period came from.
CHAIR BUNDE indicated that Pam LaBolle, Alaska State Chamber of
Commerce, would answer that question in later testimony.
MS. PAM LABOLLE, President, Alaska State Chamber of Commerce,
supported SCS HB 305(L&C). She found the actuarial study done by
the Department of Labor noting that Alaska has the most liberal
policy in the nation for paying unemployment insurance benefits.
Forty-seven states totally deny benefits for anyone who is fired
for misconduct, refuses an offer of suitable work or quits
voluntarily without good cause.
Paying unemployment to people who quit their jobs encourages a
poor work ethic, but on the other hand, one of the divisions in
the Department of Labor is to train people so they are more
employable. Alaska is second only to Connecticut as far as the
percentage of people who are unemployed who gain benefits.
Alaska is one of twelve states that provides benefits for up to
three dependents ($24 per week) above the national benefit
amount. The department has reported that 50 percent of
applicants receive benefits for dependents, which would put
Alaska above the 30 place.
CHAIR BUNDE said he understood that receiving the dependent's
th
allowance would put those who receive maximum benefits up to 11
or 12 in the nation.
2:25 p.m.
TAPE 04-29, SIDE B
MS. LABOLLE said studies indicate that 50 percent or more of UI
recipients assisted in the Case Management Program were fired or
quit their job.
So, they are voluntarily unemployed. The employers' UI
tax rates are higher than they need to be in order to
cover benefits to individuals who quit or were
fired.... We fully believe in the Unemployment
Insurance Program. We absolutely believe that
employees who are involuntarily, who through no fault
of their own, which is language that the national law
uses in this statement, are unemployed, they should
receive assistance and it should be of an amount that
will hold them over till they get their jobs. It's
only those who choose to be unemployed either through
their actions or voluntary efforts or their lack of
desire to accept another job that shouldn't receive
benefits at all.
SENATOR FRENCH asked if she recognized that a person who is
unemployed through no fault of his or her own, who has five
children, should probably get more unemployment than a single
worker.
MS. LABOLLE replied that by doing it that way, the state policy
appears to be based on need, not based on what insurance is
usually based on - how much you paid in. Philosophically,
though, she felt it was important for families to have benefits.
SENATOR FRENCH asked if she agreed that parents, who are
unemployed, need to have a way to feed their family.
MS. LABOLLE assented - on the condition that an employee became
unemployed through no fault of his own.
SENATOR FRENCH said the department's numbers show that in 2002,
only 10 percent of Alaskan claimants received the maximum
dependents allowance. He extrapolated that 90 percent of the
other claimants didn't get the maximum dependent's allowance.
So, it isn't that we can automatically add the maximum
dependent's allowance on to the average claim of the
Alaskan worker, because that would be misleading. We
wouldn't be looking at the real picture. The document
goes on to point out that the average dependent's
allowance for FY02 is $19.30, which is quite a bit
less than that maximum of $72. What it doesn't tell
you is what percentage [of claimants] take no
dependent's allowance, whatsoever.... I wouldn't want
anyone to get the impression from the testimony here
today that we're lavish with our dependent allowance -
that we throw a lot of it around - that it's a big
change in our unemployment. It looks like the average
change is $19.
MS. LABOLLE replied that last year, 44 percent of claimants had
dependents and received dependent coverage, although they might
not all have been at the maximum weekly benefit amount and the
number of dependents wasn't indicated.
CHAIR BUNDE said he wanted more information from the department
about the last three years on the number of claimants who
claimed dependents.
SENATOR SEEKINS said he wanted clarification as well.
MS. LABOLLE reminded the committee that the proposed increase in
the maximum weekly benefit amount has an $8 million cost to the
private sector employers, but it would cost the state, the
largest employer, as well. The last fiscal note was zero and she
wanted to know how that could be.
MR. DON ETHERIDGE, Alaska State AFL-CIO, opposed SCS HB 305(L&C)
and didn't want anything but the original bill passed. He said
it's real easy to talk about people getting fired for cause or
voluntarily quitting, but when you are in the business of
representing people, you realize that people quit a job
voluntarily, but don't want to. It's to the point where they
have to quit. Many times the stress of a particular job gets to
someone and they have to quit for their health reasons. His
concern is not for the construction workers who would get a
little bit more, but for the people who don't make as much
money. Sometimes, processing a grievance takes a year and in the
meantime, people have lost their homes, maybe lost their family,
been on welfare, or whatever. "We just can't buy into this. We'd
just as soon see it go away as to make this change to it."
CHAIR BUNDE asked Commissioner Greg O'Claray to comment and to
prepare a chart showing three to five years of numbers of folks
who claim maximum dependents to no dependents and any other
information that he thought would be useful.
COMMISSIONER GREG O'CLARAY, Department of Labor and Workforce
Development (DOLWD), acknowledged his request and said that the
department supported the original bill, but not the SCS.
There are a couple of facts that I think I need to
enter into the record. One of the prior witnesses
testified that to her knowledge, over 50 percent of
the claimants fit into the voluntarily quit,
terminated for cause, refusal to accept suitable
employment [category]. That's not exactly a fact in
this case. Last year, there were 64,000 claimants for
UI benefits.
SENATOR SEEKINS interrupted to clarify that he heard that
testimony regarding the group was in the case management study,
not the overall universe.
COMMISSIONER O'CLARAY continued:
I just wanted to say that because I didn't want anyone
to be misled and I'm sure that Ms. LaBolle didn't
intend to mislead anyone, either, but the number of
folks that would fall within the CS for denial of
benefits of up to 25 weeks under the bill were 13,758.
That's what we denied last year or required the
waiting period that fit into that particular category,
out of the total of 64,000 claimants. That was in the
neighborhood of about 27 percent of the total
claimants.
SENATOR SEEKINS asked if paying dependent benefits shortchanged
people without dependents who qualify for a benefit. According
to his interpretation of the chart, the state is only paying
10.7 percent of what someone deserves.
CHAIR BUNDE jumped in saying he didn't think that was accurate.
He read it to say ten percent of the claimants received the
maximum dependent's allowance.
SENATOR SEEKINS wanted to make sure everyone received what they
were entitled to.
COMMISSIONER O'CLARAY commented that he would provide the
information that was requested. He said that the department paid
out $174 million in benefits last year. Nearly 80 percent of
those dollars found their way into the Alaskan economy and
making claimants wait for 25 weeks takes a pretty big bite out
of the Alaskan economy. There is a difference of opinion on why
Alaska is more liberal in terms of its qualification for payout,
but it is because of the high cost of remaining in Alaska during
an unemployed period. Prior legislatures have recognized that.
CHAIR BUNDE thanked everyone for their comments and said he
looked forward to bringing the bill up at another time.
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