Who is a member?
Our members are the local governments of Massachusetts and their elected and appointed leadership.
Dear Representative,
On behalf of the cities and towns of the Commonwealth, the Massachusetts Municipal Association wishes to offer strong support for the municipal unemployment insurance provisions contained in H. 3983, An Act Relative to Workforce Reform. These reforms are a high priority for municipal officials, and we respectfully ask for your approval. We would like to express our appreciation to Speaker Robert DeLeo and his leadership team, House Ways and Means Chairman Brian Dempsey and the members of the committee, and Public Service Chairman Aaron Michlewitz and the members of the committee for advancing these key municipal unemployment reform proposals to ensure fairness in the system and to protect local taxpayers.
There are four key issues relative to municipal unemployment insurance contained in this bill:
First, the legislation addresses the issue of a retiree collecting both unemployment benefits and a defined pension from the same public or private employer. Under current retirement laws, there is a 960-hour limit on the hours worked after retiring and then returning to work for the same employer. The problem is that after the 960-hour employment cap is reached, technically the retiree can file an unemployment claim, even though the law is clear and working more hours is not allowed. The result of this loophole is that taxpayers then must pay unemployment benefits to an individual who is also receiving a retirement pension, and is not even eligible to be paid to work additional hours beyond the cap. Section 56 of H. 3983 contains the language that would correct this major flaw in the system by reducing unemployment benefits received by individuals who are also receiving a defined benefit pension from their post-retirement employer by an amount equal to 65 percent of their weekly pension. A retiree’s access to unemployment insurance would not be prohibited under this change (due to technical issues with state and federal law a prohibition is not allowed, which is what created this loophole in the first place), yet this language addresses the issue effectively because the net cost to taxpayers and employers would be significantly reduced. In most cases, this change would eliminate the financial incentive to apply for these windfall UI benefits.
Second, H. 3983 would prohibit election-day workers earning less than $1,000 in a calendar year from collecting unemployment benefits from the city or town. This change may only impact a small number of people, but it is critical to upholding fairness and equity in the unemployment insurance system, as intermittent work on election days should not be categorized as employment that then triggers a further burden on taxpayers to pay unemployment benefits.
Third, in those instances where unemployment insurance benefits have been wrongfully issued, this legislation includes a provision that would allow for the collection of the amounts due via federal tax refund payments through the Treasury Offset Program. Currently, the Department of Unemployment Assistance can only collect these repayments through state tax refunds.
Finally, the provision that corrects perhaps the most costly loophole for taxpayers and employers is Section 54 of H. 3983, dealing with school-based employees. This provision would correct a flaw that currently allows certain school-based employees – those who are paid by the municipality and not the school department – to collect unemployment benefits during school vacations and the summer break. The problem now is that bus drivers, crossing guards and others who are funded by the municipal budget can technically collect unemployment benefits when school is not in session, even though there is absolutely no expectation of work during those weeks. This flaw in the law would be corrected by clarifying that school-based employees who are not paid directly by the school department would be ineligible to collect unemployment benefits during vacations and the summer, by including them in “reasonable assurance” exceptions applied to all other school-based employees. In other words, these school employees could not collect unemployment benefits if they have a reasonable assurance of returning to their jobs after the school vacation or summer break.
In the strongest terms, we respectfully ask you to reject Amendment #87, filed by Representatives Brady and Nyman. This amendment would strike the important reform in Section 54 and replace the section with a task force to study the impacts of not paying benefits to individuals described in the section. In other words, Amendment #87 would strip the important reform detailed in the previous paragraph, and allow many school bus drivers, crossing guards and other part-time employees to collect unemployment when school is NOT in session, even though there is no work to be done during that time, and there never has been an expectation of employment during those weeks. Without this reform, municipally funded crossing guards and bus drivers could be paid unemployment benefits when school is closed, while their counterparts funded in school budgets in other communities play by the rules and remain ineligible for windfall unemployment benefits.
In 2012, in response to concerns about the municipal unemployment insurance system, Governor Patrick convened the Municipal Unemployment Insurance Task Force. The group was chaired by former Labor and Workforce Development Secretary Joanne Goldstein and included members representing both management and labor. The task force put considerable time and effort into meeting, fact finding, and ultimately submitting their report, and concluded that extending reasonable assurance to employees who work on behalf of the schools but are paid through the municipal budget is a critical reform in controlling the payment of unjustified unemployment insurance claims. It is redundant and unnecessary to create an additional task force, and we respectfully ask you to reject this amendment.
Again, we urge you to support the municipal unemployment insurance reform provisions in H. 3983 and to reject Amendment #87. The MMA was very pleased with the work of the Municipal Unemployment Insurance Task Force and we urge the adoption of the reforms contained in this legislation. If you have any questions, please do not hesitate to have your office contact me or MMA Legislative Analyst Katie McCue at (617) 426-7272 at any time.
Thank you very much.
Sincerely,
Geoffrey C. Beckwith
Executive Director, MMA