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.