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Mr. Y. K. HOWAT,

President, District of Columbia Trucking Association, Inc.

APRIL 8, 1957.

Washington, D. C.

DEAR MR. HOWAT: I appreciate receiving your letter of April 2, 1957, containing your views and that of your association, with respect to S. 1214, introduced by Senator Beall.

You may be sure that I shall give consideration to your viewpoint as well as that of other interested parties in arriving at my decision on the measure.

I can appreciate your concern about the provisions of the measure, and since I have always held to the principle that all parties should have their views considered when legislation is undergoing scrutiny, I am forwarding your letter to Mr. William P. Gulledge, counsel for the committee, with the request that it be brought to the attention of the subcommittee at such a time as hearings are scheduled.

With kind regards,

Sincerely,

WAYNE MORSE.

Senator MORSE. I incorporate in the record at this point a letter I received as chairman of the subcommittee under date of April 18 from the Automotive Trade Association, National Capital Area, signed by Maurice J. Murphy, executive vice president. (The letter referred to is as follows:)

AUTOMOTIVE TRADE ASSOCIATION, NATIONAL CAPITAL AREA,
Washington, D. C., April 18, 1958.

Hon. WAYNE MORSE,

Chairman, Subcommittee on Public Health, Education, Welfare, and Safety

Senate District Committee, Washington, D. C.

MY DEAR SENATOR MORSE: This association, representing new car dealers in the District of Columbia and nearby Maryland and Virginia, is opposed to S. 3493, which would amend the District of Columbia Unemployment Compensation Act. It is felt here that the provisions of the bill would seriously affect the economic life of the District of Columbia.

We are in favor of H. R. 10625, introduced by Mr. McMillan. It is our understanding that this bill would put the District of Columbia maximum benefits to where they would then be equal to the neighboring State of Maryland. We have been advised that the Washington Board of Trade will make more adequate statements in support of the position outlined above.

Respectfully yours,

MAURICE J. MURPHY, Executive Vice President.

Senator MORSE. There will be inserted a letter that Senator Beall received from O. C. Nance, Central Business Association, Washington, D. C.

(The letter referred to follows:)

CENTRAL BUSINESS ASSOCIATION, INC.,
Washington, D. C., April 16, 1958.

Hon. J. GLENN BEALL,

Senate Office Building,

Washington, D. C.

DEAR SENATOR BEALL: In regard to the hearing scheduled for April 21, 1958, on the extension of unemployment compensation. I wish to express the views of the members of the Central Business Association, Inc.

At our regular monthly meeting we unanimously adopted a resolution opposing extension of unemployment compensation and dollar increases beyond that already fixed by law in the various States and jurisdictions such as the District of Columbia. Business contributes to this fund in proportion to their turnover in employment and any additional burden on business can cause more failures.

A reexamination of the dole as was done in England beginning in 1918, and the effects upon that nation, definitely spell disaster for our Nation if we attempt in any way to follow such an example.

There are too many people in the District of Columbia at the present time drawing unemployment compensation without giving any thought to trying to earn a livelihood and this situation is not due to any shortage of available positions for there are ample jobs in the area for skilled, semiskilled and unskilled labor. To verify this, one need only to open any local newspaper to find pages of help wanted ads.

We are very obdurate in our belief that extending unemployment compensation from 26 to 39 weeks will only tend to prolong the present, so-called recession; for the recipients will have even less incentive to seek employment and become self supporting and the businesses carrying the burden of the expense will feel that the weight is too great.

Anticipating your support, I am
Sincerely yours,

O. C. NANCE, Jr., President.

Senator MORSE. We have received a letter under date of April 2, 1957, from the Department of Labor expressing its views on the Beall bill, S. 1214. The record should show that I am holding the record open for a report from the Department of Labor on S. 3493.

(The letters referred to follow :)

Hon. MATTHEW M. NEELY,

DEPARTMENT OF LABOR,
OFFICE OF THE SECRETARY,
Washington, April 2, 1957.

Chairman, Committee on the District of Columbia,

United States Senate, Washington, D. C.

DEAR SENATOR NEELY: I would like to express my views on S. 1214, a bill to amend the District of Columbia Unemployment Compensation Act, as amended. I strongly recommend enactment of this bill, which is designed to carry out the President's recommendation for improvement of the District of Columbia unemployment compensation law made in his budget message of this year. It is a part of the legislative program of the Department of Labor. Its purpose is to remedy certain defects in the 1954 amendments. Those amendments improved the law in some respects but also made it more difficult for some unemployed persons to receive benefits for the maximum period.

S. 1214 would (1) provide 26 weeks of benefits for all persons who qualify and who remain unemployed that long; (2) establish a uniform 6-week period during which benefits will be postponed upon disqualification; (3) eliminate the existing provision for reduction of total benefits in the event of disqualification; and, (4) tighten wage qualification requirements to ensure that claimants are genuinely attached to the labor market.

The District law now provides, in effect, that an eligible claimant is entitled to receive benefits for 26 weeks or an amount equal to one-third of his base period earnings, whichever is the lesser. The one-third provision can work a hardship upon those District workers whose annual earnings are at a low level, particularly during periods of unfavorable economic conditions. Thus, if a claimant has received in benefits an amount equal to one-third of his earnings of the past year at any time short of 26 weeks, he will get no further benefits that year no matter how long his unemployment continues. The bill's elimination of this one-third provision will assure that all qualified claimants will receive benefits for 26 weeks if they remain unemployed that long.

Present disqualification provisions are excessively stringent for inclusion in a sound unemployment insurance program. An individual who voluntarily quits work, is discharged by reason of misconduct, or refuses to accept suitable work, may be disqualified for a period of not less than 4 nor more than 9 weeks, depending upon the discretion of the administrative official handling the claim. I believe that a disqualification should run only for that period during which unemployment can be said to be attributed to his disqualifying act. Studies have shown that in a normal labor market a person actively looking for work will find employment within 6 weeks. Therefore, unemployment continuing for more than 6 weeks cannot fairly be said to have any relation to any previous acts of the worker. S. 1214 would provide a uniform 6-week disqualification period.

The present law in effect imposes a second penalty based on the same act which postpones qualification for benefits. This is in the form of a reduction in total benefits payable in any one year equal to the number of weeks of disqualification multiplied by the weekly benefit amount. I believe that this second penalty is inequitable and that the 6-week disqualification period discussed above is all that is necessary to discourage those who might otherwise be tempted to take advantage of the unemployment insurance system.

The present act provides a table of earnings requirements for each benefit level from $8 to $30 per week. The purpose of earnings requirements in an unemployment insurance law is to limit benefits to those persons genuinely attached to the labor force. This purpose is defeated by provisions of the present act which permit someone who has worked hardly more than 3 months in a year to qualify for the maximum amount of benefits on the basis of that work. S. 1214 will permit a worker who does not meet the earnings requirement applicable to him to qualify only if he can meet the earnings requirement of 1 of the next 2 lower benefit levels in the table. Otherwise, he will not be entitled to benefits. Thus, people who are not genuinely attached to the labor force will be eliminated from the benefit system. This is especially desirable when the duration of benefits is being increased, as this bill proposes to do.

The Bureau of the Budget advises that it has no objection to the submission of this report and that enactment of this bill would be in accord with the program of the President.

Sincerely yours,

JAMES T. O'CONNELL, Acting Secretary of Labor.

MAY 15, 1957.

Hon. JAMES T. O'CONNELL,

Acting Secretary of Labor,

United States Department of Labor,

Washington, D. C.

DEAR MR. O'CONNELL: Senator Neely has asked me to acknowledge and thank you for your letter of April 2, 1957, pertaining to S. 1214, to amend the District of Columbia Unemployment Compensation Act, as amended.

Please be assured we appreciate having your views on this important measure. Sincerely yours,

Hon. WAYNE MORSE,

LEO A. CASEY, Clerk.

UNITED STATES DEPARTMENT OF LABOR,
OFFICE OF THE SECRETARY,
Washington, May 6, 1958.

Committee on the District of Columbia,

United States Senate, Washington, D. C.

DEAR SENATOR MORSE: This is in further response to your request for our comments on S. 3493, a bill to amend the District of Columbia Unemployment Compensation Act of 1935, as amended.

The bill would amend the District law to provide a maximum weekly benefit amount based on the average of weekly earnings, a uniform duration of 39 weeks of such benefits to all eligible claimants, and flat disqualification periods of 6 weeks for quits, discharges, and refusals of suitable work.

When the President signed the 1954 amendments which improved the District of Columbia Unemployment Compensation Act in some respects, he pointed out that the act still had defects and that the process of improvement must be continued. For the past several years his economic reports have recommended improvement of this law.

S. 1214 presently before the committee embodies the administration's recommendations for improving the duration and disqualification provisions of the present law. It would provide for a uniform 26 weeks duration of benefits for all eligible claimants. It would also establish a flat disqualification period of 6 weeks, without further penalties, with respect to claimants who are discharged for misconduct, who quit or who fail to apply for or accept suitable work.

The District law presently limits total payments to one-third of the baseperiod wages, which yields benefits for less than 26 weeks in a year for nearly half of the insured and eligible claimants. We believe that this limitation should be removed and that a uniform duration of 26 weeks should be assured to all eligible claimants who are unemployed that long. A uniform duration of 26 weeks is based on experience and its adoption would substantially improve the District law.

S. 3493 and S. 1214 would amend the District law to provide a fixed 6-week period of postponement of benefits upon disqualification and remove the double penalty of reduction of benefit rights now attached to such disqualifications. We believe that any disqualification should merely postpone the payment of benefits for the period that the worker's unemployment can be said to be due to his voluntary act. The present law could operate so as also to deny him benefits at some future time when he becomes unemployed even though the unemployment is involuntary.

S. 1214 also contains a provision which we believe would assure that only those claimants who are regularly attached to the covered labor force would be entitled to benefits. Under the present law, claimants who do not meet the total earnings requirement established for a particular weekly benefit may qualify for any lower weekly benefits to which their total earnings apply. S. 1214 would permit a claimant who cannot meet the total earnings requirement for a particular benefit level to qualify for benefits only if he can meet the requirements for either of the next two lower benefit amounts. This provision, in our opinion, would maintain the principle that in order to qualify for benefits, a claimant's base period earnings must equal approximately 12 times his high-quarter earnings. At the same time, it would provide a degree of flexibility to accommodate claimants whose base-period earnings are almost sufficient to meet this standard. The adoption of this change in the qualifying requirement is advisable if duration is to be extended for a uniform period to all claimants.

Finally, we believe that the maximum weekly benefit amount provided under the District law should be brought up to date with existing wage levels. In fiscal 1957, the present $30 maximum was less than two-fifths the average weekly wage in private employment. It is estimated that the $40 maximum as provided by S. 3647, also before the committee, would provide 58 percent of the covered workers with benefits of at least one-half their gross earnings.

We favor enactment at this time of S. 1214 and of the provision in S. 3647 which would raise the maximum weekly benefit amount under the District law. The Bureau of the Budget advises that there is no objection to the submission of this report.

Sincerely yours,

Hon. WAYNE MORSE,

JAMES P. MITCHELL,
Secretary of Labor.

UNITED STATES DEPARTMENT OF LABOR,

OFFICE OF THE SECRETARY,
Washington, May 7, 1958.

Committee on the District of Columbia,

United States Senate, Washington, D. C.

DEAR SENATOR MORSE: This is in response to the oral request of May 5, 1958, by a member of your staff for our comments on S. 2419, a bill to amend the District of Columbia Unemployment Compensation Act, and for other purposes.

The bill would provide technical amendments to the act with respect to coverage, the effect of bankruptcy, and other proceedings on certain payments, and assessment of penalties for late contributions. It would also amend the act's provisions relating to repayment of benefits received subsequent to commission of fraud.

This Department is in general accord with the provisions of S. 2419, but we recommend certain amendments to the bill. Our detailed comments are set forth in the enclosure of this letter.

The Bureau of the Budget advises that it has no objection to the submission of this report.

Sincerely yours,

JAMES P. MITCHELL, Secretary of Labor.

DEPARTMENT OF LABOR COMMENTS ON S. 2419

1. The amendment of section 1 (b) (5) (F) of the District of Columbia Unemployment Compensation Act, as proposed in this bill, would broaden the scope of the provision which now excludes from coverage of the District law service performed for "a Senator, Representative, Delegate, or Resident Commissioner, insofar as such service directly assists him in carrying out his legislative duties." As we understand the amendment, it is designed to assure exclusion from coverage, retroactive to January 1, 1936, of certain services which were considered by the employing units affected as excluded employment but which it is now believed might not be actually excluded by the current provisions of section 1 (b) (5) (F).

Although we generally do not favor the narrowing of coverage under any State law, we do not oppose the proposed change inasmuch as (1) it would apparently exclude from coverage an insignificant amount of services, (2) it appears consistent with prior intent of Congress as evidenced by enactment of the current provisions of section 1 (b) (5) (F), and (3) it would affect individuals whose need for unemployment insurance protection the Congress is presumably best qualified to determine.

2. The proposed amendment of section 4 (b) of the District law would apparently resolve the present controversy between the District of Columbia Unemployment Compensation Board and the referee in bankruptcy whether contributions on wages the payment of which is delayed by bankruptcy proceedings are to be paid at the rate effective in the year in which they are actually paid by the referee or at the rate effective during the year in which the employer is adjudged bankrupt.

Since this change would facilitate the collection of contributions in such cases, this change would represent an improvement.

It is not clear whether this change would have any effect on benefit rights of workers involved. If it means that such wages would become available for benefit purposes as of the date they would be deemed constructively paid, the amendment would have additional merit since it would expedite the computation and payment of benefits based on such wages.

3. We have no objection to the proposed amendment of section 4 (c) (1) of the District law which would permit the suspension of interest charges on due but unpaid contributions during periods in which the payment of such contributions cannot be made because of a court order in bankruptcy, receivership, or probate proceedings.

4. The proposed change in section 4 (c) (2) of the District law would postpone by 15 days the effective date of current provisions requiring assessment of penalties for late payment of contributions. Since this grace period apparently would not unduly delay the payment of contributions, and would eliminate some the agency's current administrative work in connection with the waiving of such penalties, this Department favors this change. However, the proposed language of this section should be revised to make clear to which calendar quarter the contribution and wage reports, which must be filed on or before the specified date, relate. We recommend that the language preceding the comma in line 18, on page 2 of the bill, be revised to read as follows:

"If contribution or wage reports are not filed on or before the fifteenth day of the second month following the close of the calendar quarter to which they relate or if contributions relating to such quarter are not paid on or before such day, ***"

5. The proposed amendment of section 4 (d) would change the order of priority for the claims of the District for contribution indebtedness of an employer when his business is dissolved or his assets are distributed. Under the present law, claims for contributions under the District Unemployment Compensation Act can be paid out of the assets only after the payment of United States and District taxes and wages (not exceeding $600 with respect to any individual). The proposed order of priority would be: (1) Wages (not exceeding $600 with respect to any individual), (2) United States taxes and claims for contributions under the District law, and (3) District taxes. Inasmuch as we have no information on the nature of the problem which it was designed to remedy, we have no comments on this amendment.

6. The proposed changes in section 19 (e) would result in the following changes in the current provisions authorizing administrative disqualifications for fraud: (a) The current maximum disqualification period would be shortened. If amended as proposed, section 19 (e) would presumably preclude a disqualifica

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