The Honorable Aaron M. Michlewitz, House Chair
The Honorable William N. Brownsberger, Senate Chair
Joint Committee on Public Service
State House, Boston
 
Dear Representative Michlewitz, Senator Brownsberger and Members of the Committee:
 
On behalf of the cities and towns of the Commonwealth, the Massachusetts Municipal Association strongly supports H. 42, legislation filed by the Governor relative to municipal unemployment insurance. This is a high-priority reform measure, and we respectfully ask that the bill receive swift approval from your Committee and the full Legislature.
 
In early 2012, in response to concerns about the municipal unemployment insurance system, Governor Patrick convened a Municipal Unemployment Insurance Task Force, a nine-member group chaired by Labor and Workforce Development Secretary Joanne Goldstein. On November 15, 2012, the Task Force released a series of comprehensive recommendations to address major problems in the system, and Governor Patrick filed legislation based on those recommendations on January 9 of this year. The legislation would institute four important changes to strengthen the credibility of the unemployment insurance system.
 
First, the legislation addresses the issue of a retiree collecting both unemployment benefits and a defined benefit pension from the same public or private employer. A concrete example of this at the local level is the case of a police officer who retires and then subsequently works police details for the community. Under the 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 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 is that taxpayers then must pay unemployment benefits to an individual who is also receiving a retirement pension, and who is not eligible to be paid to work additional hours beyond the cap. H. 42 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, but the net cost to taxpayers and businesses would be significantly reduced. This provision is crucial to protecting the integrity of the pension system while still allowing an employee to collect unemployment insurance benefits when warranted.
 
Second, this legislation would also correct a flaw that currently allows certain school-based employees – those who are paid by the municipality directly and not by 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 the “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 vacation or summer.
 
Third, H. 42 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 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.
 
Finally, in those instances where unemployment insurance benefits have been wrongfully issued, this legislation 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.
 
Again, we respectfully ask you to support H. 42, and take all steps necessary to enact the measure as soon as possible. The MMA was very pleased that the Patrick Administration included strong local government representation on the Municipal Unemployment Insurance Task Force, and we applaud the recommendations included in H. 42. If you have any questions or would like additional information, please to 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

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