Page images
PDF
EPUB

pensaries, and the infirmaries which colleges usually maintain are a part of the permanent professional staff and should be excluded.

4. Covered employees of State institutions of higher education, as well as covered employees of private voluntary colleges and universities, should be treated identically. We feel that there should be no discrimination between the State institutions and the independent nonprofit colleges and universities in the matter of coverage. Both public and independent institutions employ the same categories of employees to serve their institutions, and they should be treated alike, as is provided for in the present bíll.

5. The special financing provisions relating to compensation benefits which are made available to nonprofit institutions should protect the institutions from a requirement to pay for benefits for employees whose unemployment is caused by other than the nonprofit institution. We warmly approve the provision in the bill which undertakes to provide that colleges and universities shall be required to meet only those unemployment compensation costs which arise from their own unemployment experience and record. But California, as in many other States, provides that the benefits payable are computed from the base period of employment, which is a 12-month period of employment occurring approximately 15 months prior to the inception of a valid claim. The benefits paid are charged against the reserve account of the base period employer irrespective of who the employer is at the time the actual unemployment occurs. For example, the employee of a nonprofit institution may voluntarily terminate for a more lucrative position in industry, work for a period of time, and be terminated by tlie subsequent employer, but the benefit payments would be charged to the nonprofit institution.

A more detailed analysis of the position of the association and further reasons for the points set forth above, which I have briefly summarized are contained in its written statement on file with your distinguished committee, and I would respectfully ask that it be included in the record.

Senator TALMADGE. Without objection, it will be made a part of the record.

Dr. BERNARD. Thank you, sir.
(The prepared statement referred to follows:)

STATEMENT OF THE ASSOCIATION OF INDEPENDENT CALIFORNIA COLLEGES AND

UNIVERSITIES

The Association of Independent California Colleges and Universities represents a membership of almost fifty private nonprofit colleges and universities, being all of the accredited four-year universities and colleges in the State of California. Each of these universities and colleges would be significantly affected if the provisions of H.R. 15119 relating to coverage of certain employees of institutions of higher education is enacted. At the present time in all but one of the institutions represented by this Association the operating costs per student far exceed the tuition charges, some by as much as three or four times. The imposition of an obligation to provide and pay for unemployment compensation benefits, whether it be by a tax or by the special provisions for financing, will undoubtedly further broaden the gap between operating costs and revenue, and to this extent funds will be committed to purposes other than the primary function of such institutions.

The independent voluntary colleges and universities are presently performing an essential function, and it has been estimated that they save the state taxpayers many millions of dollars in providing and operating facilities for higher education. A program which contemplates a charge against the funds of these institutions must be properly evaluated so that the area of greatest need is adequately met with a minimum diversion of funds from the primary educational purposes.

Initially the California institutions of higher education were unalterably opposed to the concept of providing coverage for the employees of such institutions in that the demonstrated need for such coverage in no way equaled or outweighted the financial detriment to such instit tions which would have resulted from the enactment of the legislation as originally proposed,

The provisions relating to coverage of employees of nonprofit institutions contained in H.R. 15119 have to a great extent ameliorated numerous of the problems created by its predecessor, H.R. 8282, and has significantly reduced the anticipated economic impact upon colleges and universities. The fact remains, however, that with the enactment of such legislation, funds that would otherwise be committed to educational purposes must be used to fulfill the obligations under the Unemployment Insurance Law. Once again, it is urged that Congress equate the value of the benefits with the cost to educational institutions in terms of diverting funds from a primary educational purpose to determine the wisdom of establishing a national policy requiring coverage.

If there is to be unemployment insurance coverage for certain employees of institutions of higher education, there are various provisions in H.R. 1.5119 that need clarificatîon, as well as particular areas which require change to provide the needed coverage without unnecessarily detracting from the ability of the institutions to perform their essential function.

This Association addresses its statement to the following provisions of H.R. 15119:

(1) Section 104 (b) requires state law coverage of certain service performed for nonprofit organizations, and various classifications of employees of such institutions have been excluded from coverage. It is the position of this Association that in addition to those employees who have been excluded from coverage, students' spouses should also be excluded.

(2) The provisions of Section 104 (b) state that the requirements for coverage shall not apply to service performed “(4) in the case of an institution of higher education, or by an individual employed in an instructional, research, or princi. pal administrative capacity;". A clarification of the term “principal administrative capacity” is desirable.

(3) Section 104 (b) excludes from coverage service performed by an individual in a professional capacity such as physician, dentist, osteopath, chiropractor. etc., when such service is performed in the case of a hospital. This exclusion should be broadened to cover similar types of professional personnel performing services in institutions of higher education.

(4) By requiring coverage for employees of state institutions of higher educa. tion performing substantially similar functions as voluntary institutions, H.R. 15119 has avoided a serious discrimination against the private voluntary colleges and universities. If in the review of this legislation it is decided the state colleges and universities are to be excluded, the same treatment should apply to the independent sector.

(5) The provisions of H.R. 15119 contained in Section 104 (b) authorizing nonprofit organizations an option to reimburse the state for actual amounts of compensation attributable under the state law to included service in endorsed. Provision, however, should be made so that colleges and universities would not be penalized under state law by electing this option and being charged for benefits paid for unemployment not directly caused by such institutions.

This statement now addresses itself to a detailed discussion of the foregoing points : (1) The erclusion from coverage of students' spouses

The present law excludes from coverage students in the employ of schools, colleges or universities if service is performed by one who is enrolled and is regularly attending classes at such college or university. Historically, colleges and universities have provided students, in need of financial assistance, various opportunities to earn additional funds to permit them to continue their education. Recently and as part of such assistance programs, employment opportunities hare been extended to students' spouses. Inevitably at the conclusion of the student's collegiate education both the student and spouse move elsewhere to obtain gninful employment, and unless excluded from coverage the student's spouse may qualify for unemployment compensation benefits. Since the employment offeredi is, to a large extent, a means of assistance to deserving students, it is recoinmended that students' spouses be excluded as are students, so that colleges and universities engaging in such practices would not be penalized or required to exclude such personnel from employment for fear of the additional cost involved in connection with the payment of benefits. 12) Clarification of principal administrative capacity

The exclusion from coverage of service performed by an individual in a principal administrative capacity should be clarified to establish appropriate guidelines for the various states in implementing plans to qualify under the federal legislation. The report issued by the House Ways and Means Committee at page 36 purports to define this inclusion as follows:

**Paragraph (4) also excludes services performed by an individual employed in a principal administrative capacity. This would exclude not only the officers of the institution such as the president and the board of directors but also other individuals who do not have titles as officers of the institution but who serve in a principal administrative capacity, such as the business manager, chief librarian, etc. The exclusions under paragraph (4) apply whether the institution of higher education is a nonprofit or a State institution."

The foregoing definition, although helpful, does not adequately define many of the areas of employment which may fall within or without the exclusion. The ('alifornia Legislature, in adopting legislation providing for elective coverage of various persons employed by similar institutions, defines the type of employment to be excluded as follows:

"Service performed as a professor, associate professor, lecturer, graduate assistant or research assistant, teacher, instructor, vocational instructor, counselor, activities adviser, dean of a college, dean, associate dean, laboratory technician, librarian, president, vice president, registrar or other member of the faculty or teaching or administrative staff performing similar service to these categories." [8 711(b) (6) Unemployment Insurance Code_California)

We would support the inclusion of a similar definition either in the legislation or in the committee report. (3) Service performed by professional persons such as physicians, dentists,

osteopaths and chiropractors in the employ of a college should be ercluded

from coverage Many colleges and universities maintain health centers or clinics which do not of necessity qualify as hospitals and in which various services are rendered to the students, employees, and in some cases members of the faculty. Since H.R. 15119 would exclude such services from coverage had they been performed in a nonprofit hospital (see $ 104(b)), we see no reason why such coverage should not also be excluded by similar professional personnel in the employ of a college or university. (1) Compensation benefits should be charged against colleges and universities

only for unemployment directly caused by such institutions of higher

Icarning In the unemployment insurance laws of many states, a formula has been adopted for the method of determining compensation benefits and the designation of the employer's account to be charged for the payment of such benefits. California, as in many other states, provides that the benefits payable are computed from the base period of employment, which is a 12-month period of employment occurring approximately 15 months prior to the giving rise of a valid claim. The benefits paid are charged against the reserve account of the base period employer irrespective of who the employer is at the time the actual unemployment occurs. It is therefore conceivable that an employee of a nonprofit institution would voluntarily terminate to accept a more gainful position with industry, work for a period of time and be terminated by the subsequent employer, and the benefit payments would be chargeable to the nonprofit institution.

The reason to include special means of financing the benefits for nonprofit organization employees is set forth in the report issued by the House Ways and Means Committee at page 9, which reads as follows:

"It appears that these organizations may have somewhat less than the average risk of unemployment. While it seems appropriate that certain of their workers should have protection against unemployment your committee believes it is also appropriate that these organizations should not be required to share in the costs of providing benefits to workers in profit-making enterprises. Under the reimbursement method, a nonprofit organization whose workers experience no com. pensated unemployment in a year would have no unemployment insurance costs for that year.”

If the true intent of the cost reimbursement method is to provide only for employees of such institutions who become unemployed by such institutions, then the intent of Congress is not served by existing state laws adopting the aforementioned concept concerning determination of benefits as well as charging of the employer's account.

This Association would support a provision in H.R. 15119 restricting unem. ployment compensation benefits to be paid to persons unemployed only as a result of the actions of the nonprofit organization employer.

CONCLUSION

The need for institutions of higher education has been demonstrated to be continually increasing, and there is no indication that the future will change this course. The California colleges and universities strongly urge Congress to evaluate, in light of the need, a national policy requiring coverage of certain employees of institutions of higher education, and if in its wisdom Congress de termines that such coverage is necessary, then to give favorable consideration to the recommendations contained in this statement.

Senator TALMADGE. Doctor, if you do not charge the experience table to the base period employer who would you charge it to?

Dr. BERNARD. Well, I think Mr. Forbes, Mr. Charles F. Forbes, our chief counsel, could answer that question as a technical matter, Mr. Chairman.

Senator TALMADGE. Would you care to answer it, Mr. Forbes?
Mr. FORBES. I will endeavor to answer it.

It is my understanding that in situations in which a base period employer is not chargeable with the benefits paid, at least the reserve account is not chargeable with the benefits, it goes into a pooled fund, so to speak. I would suggest that in this case benefits to such employee be paid from the pooled fund in lieu of charging it directly to the account of the nonprofit institution.

Senator TALMADGE. Would you charge any part of it to any of the other base period employers ?

Mr. FORBES. Well, it is my understanding that a part of the unemployment insurance fund is used for this purpose to take care of the payment of unemployment insurance claims which are not chargeable to or directly to an employer's account.

Senator L'ALMADGE. Thank you, Dr. Bernard and Mr. Forbes. At this point in the record, I would like to insert a letter from the Federation of Independent Illinois Colleges and Universities, signed by Milburn P. Akers, who endorse in toto the statement of the Association of Independent California Colleges and Universities.

(The letter referred to follows:)
THE FEDERATION OF INDEPENDENT ILLINOIS COLLEGES AND UNIVERSITIES,

Chicago, Ill., July 19, 1966.
Mr. TOM VAIL,
Counsel, Senate Finance Committee,
Senate Office Building,
Washington, D.C.

DEAR SIR: The Executive Committee of the Federation of Independent Illinois Colleges and Universities, which consists of the 43 independent institutions listed on this letterhead, has directed me to inform the Senate Finance Committee that it endorses in toto the statement on H.R. 15119 sabmitted to the Committee by the Association of Independent California Colleges and Universities.

The California statement fully reflects the attitude of the Federation of Independent Illinois Colleges and Universities, and we would appreciate it if you would have such agreement noted in your Committee record. Sincerely yours,

MILBURN P. AKERS,

Executive Director. Senator TALMADGE. The next witness is Mr. William R. Consedine, director of the legal department, National Catholic Welfare Conference.

STATEMENT OF WILLIAM R. CONSEDINE, DIRECTOR, LEGAL DE

PARTMENT, NATIONAL CATHOLIC WELFARE CONFERENCE

Mr. CONSEDINE. Thank you, Senator. Your note probably does not reflect the fact that I am substituting for Monsignor Higgins, who was unable to be here today, but to rearrange the committee's schedule of witnesses to accommodate him would have been a bit of a task, and we did not want to impose further on either the committee or its staff.

I have a statement that I would like to submit for the record, Senator, and I will be very glad to summarize it for you.

Senator TALMADGE. Without objection, the statement will be included in the record.

You may proceed to summarize it.

Mr. CONSEDINE. I am appearing in behalf of the--not only the National Catholic Welfare Conference, department of social action, but also its bureau of health and hospitals, its department of education, the National Conference of Catholic Charities, and the National Catholic Cemetery Conference.

Attached to my statement is a list of the types of organizations, nonprofit organizations, that these respective groups operate.

The first few pages of my statement, Senator, are merely an expression of pleasure over the fact that the House committee accomplished in a very realistic way the twin objectives of covering the employees of nonprofit organizations but, at the same time, recognizing their unique employment experiences and the vast differences between a nonprofit organization and an organization operated for profit, and we agree with the Secretary of Labor, Mr. Wirtz, that the House has achieved an ingenious method of accomplishing this coverage.

We have but three suggestions to make.

The House committee report notes that the exclusion of a church would also exclude a divinity school preparing students for the ministry. The intention of the committee is clear. The committee also excluded ministers and members of religious orders when services are in the course of their religious duties.

We feel certain the committee also intended to exclude the novitiates and houses of study for the training of candidates studying to become members of religious orders.

We note this with the suggestion that the intention be made clear.

We believe also that the provisions of section 122 (a) which permits a State to assign reduced rates but not less than 1 percent to newly covered employees until time sufficient to achieve an experience rating is again prudent recognition of the special circumstances involved.

It would also seem desirable to provide that any nonprofit organization which elects coverage rather than the option of self-insurance be

65-992--66--13

« PreviousContinue »