Unemployment Insurance Task Force issues report

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The Municipal Unemployment Insurance Task Force, created nine months ago in response to allegations of abuse of unemployment benefits by public employees, released its findings on Nov. 15.

The report addresses a number of issues initially raised in a letter sent to the governor on Feb. 27 by Lynnfield Town Administrator William Gustus – and cosigned by 23 additional municipal officials – as well as subsequent letters sent by local officials.

In his letter, Gustus cited a number of examples of exploitation of loopholes, such as a retired Lynnfield police officer who collected unemployment benefits while also collecting a $36,000 pension and up to $25,000 in police details.

The task force made three legislative recommendations:

• Reduce unemployment insurance benefits by an amount equal to 65 percent of a retiree’s weekly pension payment. The report states that this proposal recognizes that employees have contributed substantially to their own pensions and provides a safety net for employees with smaller pensions while creating a reasonable offset.

• Extend the “reasonable assurance” exception to employees who provide services “to or on behalf of an educational institution,” such as bus drivers and crossing guards, but are not paid directly by the school department, meaning they would not be able to collect when school is not in session. The task force recommends including substitute teachers in this group as well.

• Prohibit unemployment insurance for election workers making less than $1,000 per year.

The task force acknowledged that legislative recommendations were complicated by federal and pension laws.

The nine-member task force met five times to review issues presented by municipalities, data and materials provided by the Department of Unemployment Assistance, and input from municipalities and the MMA. According to the report, the task force focused on issues “that had widespread applicability among municipalities and were frequently raised as challenges that affected the largest number of cities and towns.”

The issues involve retired employees, public safety employees who reach the statutory maximum retirement age, on-call employees, part-time employees, and a variety of school employees.

The report suggests new Department of Unemployment Assistance systems and regulations as well as best practices for communities.

The report recommends that the Department of Unemployment Assistance clarify rules for seasonable employees, issue guidance for on-call employees, and develop tools for school districts to better manage “reasonable assurance” over the summer break.

Suggested municipal best practices include ensuring that municipal officials respond in a timely fashion to Department of Unemployment Assistance requests for information, and that they report any fraud, re-employment, and other factors that affect employee eligibility for benefits.

Communities that use a third party administrator are encouraged to create a system to ensure accountably and the necessary oversight.

The task force, chaired by Labor and Workforce Development Secretary Joanne Goldstein, included two municipal management representatives (Salem Mayor Kim Driscoll and Newton Mayor Setti Warren), two labor representatives, two legislators, a retired judge, and Massachusetts Taxpayers Foundation President Michael Widmer.

“We are pleased that the Municipal Unemployment Insurance Task Force … was able to address the issues raised by municipalities regarding their unemployment insurance costs and concerns about the system,” Goldstein said. “The Task Force has proposed legislative, policy and process changes, which together will help lower unemployment insurance costs for municipalities.”

She said the Patrick-Murray administration “looks forward to continued collaboration and partnership” between the Department of Unemployment Assistance and municipalities to better manage and reduce unemployment insurance costs.

Secretary Goldstein and her staff have spoken to a number of municipal groups since the Task Force began its work. She will be a panelist at a workshop during the MMA’s Annual Meeting on Jan. 25.

Download the full task force report (4.7M PDF)

Written by MMA Legislative Analyst Katie S. McCue