STATEMENT OF J. ELDRED HILL, COMMISSIONER, VIRGINIA EMPLOYMENT COMMISSION, THE STATE OF VIRGINIA, AND PRESIDENT, THE INTERSTATE CONFERENCE OF EMPLOYMENT SECURITY AGENCIES

Mr. HILL. Thank you, Mr. Chairman.

Before introducing the panel, I would like to say on behalf of the Interstate Conference of Employment Security Agencies, I express our gratitude to this committee for the interest you have consistently displayed in considering the viewpoint of the State administrators. You have refused to allow the interest of the States in the FederalState system to be ignored or stifled. When we appeared before you last August the State administrators had had a very brief time indeed to study and reflect upon the changes that were being urged upon you by our Federal partner.

But you have given us the time and we are here today to discuss with your our recommendations.

These recommendations are a product of work done first by a special committee of 10 State administrators, and then by action of the entire conference during 2 days of final deliberations and debate. All but four States were represented at the national meeting in January when these recommendations were finally completed. In each instance you will note that a majority of the States have concurred in the recommendations that are to be made, and on most issues you will notice that the majority was overwhelming.

Our recommendations in most instances involve specific provisions in H.R. 8282. We favor some of those provisions and we oppose others, and in some instance we submit to you alternative proposals. We also recommend some areas for improvement of the unemployment insurance program on which H.R. 8282 is silent.

Now, I might take a moment to explain to you the method that we hope you will follow in this presentation. We want to preserve your time and yet be as thorough as possible. With me today are eight State administrators. Their combined experience in the employment security program represents nearly a century and a half of experience and service. Each of these administrators has been asked to present to you a brief statement with respect to certain of our recommendations.

Specific items have been assigned to each of them, and they are prepared to discuss the reasoning that supported our position, and the recommendation that we will make to you.

Before you is a list of the State administrators and the particular items in the report which each of them will discuss. Mr. Chairman, if I might, I will introduce the first gentleman, Mr. Robert J. Brown, of Minnesota, who is the commissioner of the Minnesota Employment Security Agency. Mr. Brown will discuss our recommendations Nos. 1, 5, and 6. If you prefer, I will introduce all of the gentlemen first.

The CHAIRMAN. I would think it would be better if you introduced them as they testify, Mr. Hill.

I want to assure you that we deeply appreciate you and your colleagues being with us this morning. I am sure that your testimony

will be most interesting and most helpful to the committee. I want you to take such time as is needed to fully discuss each recommendation that you desire to discuss. Your time is precious, I know, but we can be here today and tomorrow if necessary in order to hear all that you gentlemen care to say and to hear the responses to our questions that you would want to give.

We are glad to have you, Mr. Brown, and you are recognized.

STATEMENT OF ROBERT J. BROWN, COMMISSIONER, MINNESOTA DEPARTMENT OF EMPLOYMENT SECURITY

Mr. BROWN. Mr. Chairman and members of the committee, I appreciate the opportunity to represent the Interstate Conference and discuss its recommendations with regard to coverage, interstate claims, and maritime employers.

I wish to make it clear at the outset that the following remarks are intended to describe the Conference's position rather than my own personal recommendations.

The recommendations I made to the committee on August 18, 1965, remain my position with regard to several sections of H.R. 8282. RECOMMENDATIONS OF INTERSTATE CONFERENCE OF EMPLOYMENT SECURITY AGENCIES AS TO UNEMPLOYMENT INSURANCE LEGISLATION

1. COVERAGE UNDER THE FEDERAL UNEMPLOYMENT TAX ACT

(a) (1) H.R. 8282-One or more at any time.

(2) Conference recommendation-gross wages of $300 or more paid to employees in any calendar quarter in the taxable year.

The Conference strongly favors the extension of coverage to smaller firms, thereby providing protection against wage loss through involuntary unemployment to those members of the labor force now arbitrarily excluded.

The administrators felt, however, that the "one or more at any time" provision of H.R. 8282 is too broad in that it would cover persons that are not regularly employers, but who only on rare occasions hire casual labor. The Conference recommends the "$300 for quarter" provision for two reasons:

First, this would insure coverage of employers who regularly have employment.

Second, we prefer the quarterly work-and-wage test over an annual formula to permit the States to determine liability currently for all employers who, during any quarter, meet the prescribed test.

Vote of State administrators on above recommendation

(b) Nonprofit organizations. The Conference recommends that individuals employed by certain nonprofit organizations also be afforded

the protection against wage loss now given to other persons in the labor force with the exclusions as provided in section 203.

Persons who would be covered under this provision perform services identical to those performed for other employers. We concur with the provision of section 203 authorizing any State either to accept reimbursement for benefits or to collect contributions from such normally tax exempt nonprofit organizations. We also recommend, for the same reasons, that the Federal unemployment tax be waived as to such organizations.

Vote of State administrators on above recommendation

(c) Coverage extended to certain workers not now employees under the common law master-servant test.

The Conference recommends the adoption of this provision, section 204 of H.R. 8282. Types of persons covered would be those employed as agent or commission drivers distributing meat, vegetables, beverages other than milk, and laundry or drycleaning services, traveling or city salesmen working full time soliciting orders, on behalf of a principal, from wholesalers, retailers, hotels, restaurants, and others, for merchandise for resale or supplies for use in business operations.

When employed full time for a principal, such individual is performing services in furtherance of such principal's business and is certainly entitled to protection, should he become separated from the principal and his source of income thereby removed from him.

Vote of State administrators on above recommendation

(d) Coverage of certain agricultural workers.

The Conference recommends that individuals performing services in processing agricultural products, and other activities essentially industrial in nature should be covered, as provided in the first few lines of section 205, including those engaged in off-the-farm activities, such as raising or harvesting mushrooms, hatching poultry, irrigation work for profit, and handling, planting, drying, packing, processing, freezing, grading, storing, or delivering to storage or market agricultural products, if done for someone other than the farm operator who produced more than half the product so handled, processed, or delivered.

Such services, essentially industrial in nature, should not be excluded and the workers denied the protection afforded by unemployment insurance when involuntarily unemployed.

(e) The recommendation of the Conference was against coverage of general farm workers.

The Conference does not recommend against eventual coverage of such workers. However, it recognizes the many problems involved and recommends at this time that such problems be the subject of study by a Special Advisory Commission, as proposed by section 301 of H.R. 8282, and by the Secretary of Labor and by the State employment agencies.

The Conference recommends such studies and subsequent report be the basis for future action.

The Conference recommends adoption of the closing paragraph of section 211 of H.R. 8282, with minor changes, amending section 3304 (a) of the Internal Revenue Code by adding thereto the following (amended) language (now numbered (11)):

"Compensation shall not be denied or reduced in such State to an otherwise eligible individual solely because he files a claim in another State or because he resides in another State at the time he files a claim for unemployment compensation."

However, the Conference suggests that the following further language be added to the foregoing, in order to permit the States to apply regular provisions of their various laws relating to availability for work, active search for work and other regular eligibility provisions: "provided that nothing herein shall be construed as limiting the right of any State to deny compensation to a claimant based on criteria relating to his availability for work or his removal to a labor market area where there is little or no opportunity for employment, or other criteria which do not have as their basis for denial filing a claim in another State or residing in another State at the time of such filing." Vote of State administrators on above recommendations

6. MARITIME EMPLOYERS

The Conference recommends the inclusion in Federal law of a provision concerning maritime employers such as that set forth in section 206 of H.R. 8282, but with an amendment that any denial of tax credit would apply to a taxable year after 1967 instead of 1966.

Vote of State administrators on above recommendation

The CHAIRMAN. Thank you very much, Mr. Brown.

Mr. HILL. The recommendations Nos. 2 and 9 of the Conference report will be presented by Mr. Curtis P. Harding, administrator of the Utah Employment Security Agency.

The CHAIRMAN. We are glad to have you with us and you are recognized.

STATEMENT OF CURTIS P. HARDING, ADMINISTRATOR, UTAH DEPARTMENT OF EMPLOYMENT SECURITYY

Mr. HARDING. Thank you very much, Mr. Chairman and gentleFirst with reference to recommendation No. 2, Extended Benefits During Periods of Higher Unemployment.

men.

The Interstate Conference of Employment Security Agencies recommends that unemployment insurance benefit payments be made available to workers for a longer period of time when employment opportunities are at a minimum. The Conference also recognizes that there is wide variance in the incidence of unemployment, State by State. Usually periods of high unemployment are termed recessions. Thus the proposal we have made is known as a program to provide extended unemployment insurance payments during recession periods. But recession is herein defined to mean, on a State-by-State basis, a period of time wherein the number of unemployed individuals is 120 percent greater than the average experience of this State in the 2 preceding years.

It will be noted that the State recession trigger point is recommended to be 120 percent rather than 115 percent as is contained in H.R. 7476.

I have had distributed a bar chart which illustrates the operation of this higher trigger in comparison to the old one, which updates the information through 1965 and which corrects a couple of errors contained in the earlier release of last year.

(The chart referred to appears opposite this page.)