Dr. KRUGER. Thank you very much.

Mr. FULTON. The committee stands adjourned until 10 a.m., Monday, when we will resume, hearing the same subject.

(Whereupon, at 11 a.m., the committee adjourned, to reconvene at 10 a.m., Monday, October 6, 1969.)

AMENDMENTS TO FEDERAL UNEMPLOYMENT

COMPENSATION LAWS

MONDAY, OCTOBER 6, 1969

HOUSE OF REPRESENTATIVES,
COMMITTEE ON WAYS AND MEANS,

Washington, D.C.

The committee met at 10 a.m., pursuant to notice, in the committee room, Longworth House Office Building, Hon. Wilbur D. Mills (the chairman) presiding.

The CHAIRMAN. The committee will please be in order.

Our first witnesses this morning represent the Interstate Conference of Employment Security Agencies.

Will you please come forward?

Mr. Vavoulis, are you to make the statement.

Mr. VAVOULIS, Yes.

The CHAIRMAN. If you will present yourself to the committee by giving us your name, address and capacity in which you appear and, also, identify the others at the witness table with you, we will be glad to recognize you, sir.

STATEMENT OF GEORGE J. VAVOULIS, PRESIDENT, INTERSTATE CONFERENCE OF EMPLOYMENT SECURITY AGENCIES (COMMISSIONER, MINNESOTA DEPARTMENT OF EMPLOYMENT SECURITY); ACCOMPANIED BY CURTIS HARDING, ADMINISTRATOR, UTAH DEPARTMENT OF EMPLOYMENT SECURITY; HENRY ROTHELL, ASSISTANT ADMINISTRATOR, TEXAS EMPLOYMENT COMMISSION; BEN ADAMS, COMMISSIONER, DEPARTMENT OF EMPLOYMENT SECURITY, STATE OF NEW HAMPSHIRE; DICK COFFMAN, ADMINISTRATOR, TEXAS EMPLOYMENT COMMISSION; HENRY KENDALL, CHAIRMAN, EMPLOYMENT SECURITY COMMISSION, STATE OF NORTH CAROLINA; DILL HEARTWELL, COMMISSIONER, VIRGINIA EMPLOYMENT COMMISSION; LAWRENCE A. BURLEY, ADMINISTRATOR, UNEMPLOYMENT DIVISION, STATE OF WISCONSIN

Mr. VAVOULIS. Mr. Chairman, and members of the committee, my name is George J. Vavoulis. I am commissioner of the Minnesota Department of Employment Security, and president of the Interstate Conference of Employment Security Agencies. In this latter capacity, I am here today. I would like to repeat that I am here as president of the Interstate Conference of Employment Security Agencies.

Accompanying me today are Mr. Curtis Harding, administrator of the Utah Department of Employment Security, and a former past president of ICESA; and Mr. Henry Rothell, a director of unemployment insurance, Texas Employment Commission. Mr. Rothell is also chairman of the conference legislative committee. These gentlemen have considerable knowledge in the field of unemployment insurance and also have in the past worked very closely with your committee. They will assist me in answering any questions the committee may have.

The CHAIRMAN. Thank you. You are recognized, sir.

Mr. VAVOULIS. Thank you.

Mr. HARDING. Mr. Chairman, in addition we have with us this morning Mr. Ben Adams from New Hampshire, Mr. Dick Coffman from Texas. Henry Kendall from North Carolina, and Bill Heartwell from Virginia, and Lawrence Burley from Wisconsin.

The CHAIRMAN. We are glad to have all of you gentlemen with us. You may proceed.

Mr. VAVOULIS. Fine.

The Interstate Conference of Employment Security Agencies is an organization of the chief administrative officials of the State employment security agencies in the 50 States, the District of Columbia, Puerto Rico, and the Virgin Islands. These agencies are responsible for the unemployment compensation as well as employment service programs in their respective States.

The conference recognizes the need for improvement of the Federal legislation pertaining to unemployment insurance and offers its continuing services to the committee.

Following the introduction of H.R. 12625 the conference legislative committee met and carefully analyzed its provisions and made such analysis available to each State agency. Also during the past few weeks, regional meetings have been held wherein every State was given an opportunity to receive from officials of the Manpower Administration a full explanation of H.R. 12625 and its provisions.

On October 2, 1969, following our 33d annual meeting, 48 jurisdictions remained and prepared the attached recommendations, with respect to the legislation. You will note that these recommendations cover the following items: (1) Coverage, (2) provisions required to be included in State laws, (3) judicial review, (4) research and training, (5) Federal-State extended unemployment compensation, (6) financing provisions, and (7) other provisions.

All other provisions of H.R. 12625 were considered to be noncontroversial.

I call to the committee's attention that the vast majority of those present at our October 2 meeting strongly urge an improvement to the Federal unemployment insurance law even though many States through legislative action have adopted many of the provisions under discussion.

This concludes my statement, and we have prepared in the attachment the action of the conference on the seven issues that I have raised. The CHAIRMAN. I think it would be helpful to the committee if you would go through this attachment with us, rather than have us question you about it.

Mr. VAVOULIS. All right.

(1) Coverage under Federal Unemployment Tax Act.

A. In lieu of the proposed coverage of employers with a "quarterly payroll of $300 or more" to be affected by section 101, the conference recommends that section 3306(a) of the Internal Revenue Code be amended to extend the coverage of the tax to any employer who had one or more workers in each of 20 weeks or who paid gross wages of $1,500 or more to employees in any calendar quarter in the taxable

Mr. BYRNES. Mr. Chairman, I wonder if they can give us the underlying rationale of the recommendations that are made, we need not necessarily go into all of the details, but an outline of what the problem is, would help.

For instance, in the area of coverage, what is the rationale for favoring 20 weeks with a gross wage of $1,500, rather than the administration's recommendation of $300 in a quarter?

The CHAIRMAN. I think we will make more time if we take these up individually and discuss them individually rather than let you go through the entire paper and come back to them. I think Mr. Byrnes' point is well taken.

I had the same question in mind concerning the amendment to the definition of employer. Why do you prefer this proposal to the proposal in the bill?

Mr. VAVOULIS. Mr. Chairman, I will ask Mr. Rothell to speak to that question.

The CHAIRMAN. All right.

Mr. ROTHELL. My name is Henry Rothell.

In discussing this particular part of the bill, we were concerned that the $300 figure set out in the administration proposal would bring in a very large number of extremely temporary types of employees and extremely short seasonal work. We had numbers of examples that concerned us considerably. Many of the carnivals who operate only for one evening have a number of workers. We have roadside fruit establishments in our State and a number of other States who operate for very short periods of time. We felt that the $300 figure bringing in every employer that paid wages of $300 in a quarter would bring in far too many extremely casual types of employment rather than a regular type of employment.

We also felt that the $1,500 would cover any and all of these businesses, construction subcontractors primarily, who operate less than 20 weeks, and we felt like we needed a dollar figure to bring in these larger employers that operate 10 to 12 to 14 weeks, not 20 weeks, so the one or more for 20 weeks would cover the regular employer who had one employee.