Bill would close unemployment benefits loophole

The governor on March 7 filed legislation that would prohibit public employees from collecting unemployment benefits after reaching state-set limits on post-retirement earnings.

Under state law, public employees who are collecting a pension may return to work for a public employer, but they may work no more than 960 hours in a calendar year and cannot earn more than the difference between the current salary of the position they retired from and the value of their pension.

The governor’s bill addresses a loophole brought to light by a Feb. 27 letter from Lynnfield Town Administrator William Gustus citing inappropriate uses of unemployment insurance benefits in the public sector.

The bill is now before the Public Service Committee, which is expected to broaden the legislation to address additional categories of abuse. The committee has scheduled a hearing on the bill on April 19.

The impetus for Gustus’s letter was a retired Lynnfield police officer who was collecting unemployment benefits in addition to his pension after he had reached his 960-hour limit working details. (On reaching the limit, he claimed that his employment was terminated through no fault of his own.)

Gustus said he discussed the issue with two dozen other municipal managers before writing his letter to the governor, which shared examples such as teachers collecting unemployment benefits over the summer, school bus drivers collecting on holidays and non-school days, and on-call firefighters receiving unemployment insurance benefits from the town when they are laid off from their private-sector jobs.

“The frustration of local finance officials regarding all of this is real, and we respectfully request your assistance in addressing these concerns,” Gustus wrote.

Days after receiving the letter, Labor and Workforce Development Secretary Joanne Goldstein followed up with a letter to municipal officials urging them to inform her of examples of abuses in the unemployment insurance system.

“My office is committed to addressing these issues,” she wrote. “The Patrick-Murray Administration shares your concern when claimants improperly receive [unemployment] benefits and recognizes the burden this places on municipalities and taxpayers.”

By mid-March, Goldstein’s office reported that it had received more than 200 examples from 60-plus communities.

The MMA has asked communities to forward a copy of any letters sent to Goldstein (by faxing to (617) 695-1314 or emailing to mdevine@mma.org).