Bills Attempt to Address UC Service Problems

One of the biggest challenges faced by the Labor and Industry Committee over the past 12 months is the performance of the Labor and Industry Department, particularly the claims processing system.

After the department furloughed 100 claims processors and investigators a year ago, complaints began pouring in about extreme difficulty in filing claims and endless waits on hold with the service centers.

That was followed by release of a letter from the federal Department of Labor to state labor officials describing extensive problems within the department, failure to meet deadlines and questions about claims regarding its budget.

The bottom line is that losing a job is one of the most difficult and a emotional times in a worker’s life, and compounding that with difficulty in obtaining well-earned unemployment benefits is unacceptable.

Two bills are making their way through the legislature intended to address the problems with the claims system.  Each shows promise, but each has potential downside.

Senate Bill 928 was unanimously voted out of the Labor and Industry Committee recently, with two amendments I offered to make sure the provisions of the bill are intended to create a better system, and not to pave the way for more staff cuts in the Department of Labor.

House Bill 26 was also voted out of the House Labor and Industry Committee.  Both bills await a floor vote.

The amended versions of S.B. 928 and H.B. 26 have several differences.  Both provide additional funding for the administration of Unemployment Compensation for the next four years, beginning in 2013, by directing a portion of employee UC tax contributions into a Service and Infrastructure Improvement Fund. 

Potential Privatization

H.B. 26 would prohibit the use of funds deposited into the Service and Infrastructure Fund to contract out unemployment services to third parties.  S.B. 928, similarly, would accomplish this same objective; however, S.B. 928, does so by prohibiting the use of moneys from the Service and Infrastructure Fund for any purpose that would violate the merit staffing requirement of section 303(a)(1) of the Social Security Act (49 Stat. 620, 42 U.S.C. Sect. 503(a)(1)).

H.B. 26 and S.B. 928 would provide for 5 percent of employee unemployment contributions on wages paid from January 1, 2013 through September 30, 2017 to be deposited into the Reemployment Fund to the extent the contributions are paid on or before December 31, 2017. 

Service and Infrastructure Fund Deposits

H.B. 26 allows more money to be placed into the Service and Infrastructure Fund in 2015 and 2016 than does S.B. 928.  Under H.B. 26, an amount not to exceed $190 million in state and federal funds is to be deposited into the Service and Infrastructure Fund in years 2015 and 2016, allowing for this amount to be adjusted according to the Consumer Price Index from May 2013 through January of the calendar year.  Conversely, S.B. 928 provides for an amount not to exceed $20 million to be deposited in 2015 and an amount not to exceed $10 million in 2016.

H.B. 26:
$40 million cap in 2013
$30 million cap in 2014
$190 million cap in 2015
$190 million cap in 2016

S.B. 928:
$40 million cap in 2013
$30 million cap in 2014
$20 million cap in 2015
$10 million cap in 2016

Use of Funds

H.B. 26 specifies the moneys deposited into the Service and Infrastructure Fund are to be for staffing purposes, while S.B. 928 does not stipulate this purpose for the funds.  Both bills provide for the funds to be used to improve the quality, efficiency and timeliness of services provided by the service center systems, including claim filing, claim administration and adjudication services, as well as for expenditures for information management technology, communications technology and other infrastructure components the secretary determines will provide improvements to the unemployment system. 

My intent is to ensure that this $100 million dollars does not act as a band-aid during these difficult times but ensures the Department is adequately staffed to process and service claimants. 

Reporting this legislation from committee has been a challenge for me, and neither bill adequately addresses concerns for the long-term efficiency of the claims process, especially in light of the unknown effect of federal budget sequestration.

 I feel strongly that the responsibility for adequate staffing should lie with the Department and the Administration and this should be done through the budget process.

We need to fix this situation expeditiously and hopefully this legislation will do so until a more appropriate fix in the budget can be made.

Labor Series Heads to Allentown

My series of forums on the annniversary of the Fair Labor Standards Act and the next 75 years for the American worker continues this week in Allentown.

The forum will be held at IBEW Local 375, 1201 W. Liberty Street at 1 p.m.. All are invited to attend.