Evening star., 1935-12-04
DC. Job Insurance.
PLAN STILL HAzY|
Employers Show Concern
as Date of Taxation
Draws Near.

With effective date Of the taxation
provisions Of the District unemploy-
ment compensation act less than four
weeks distant, local employers are be-
coming increasingly concerned as to
what sort Of records, reports End ac-
counting methods must be provided to
meet requirements of the law.
Thus far, the local administrative
board. authorized to prescribe all
regulations which may be necessary
to carry out the provisions of this
act" has not yet done so.
BY terms of the District law, every
employer Of one or more persons, with
a few specific exemptions, becomes
subject on January to per cent
tax on his total pay roll. Levied on
monthly basis, the tax must be paid
by the fifteenth day of the following
month, thus making the first payment
due on February Is, 1896. Proceeds
are to be placed in single District
pooled fund from which all benefit
payments eventually will be paid.
Tax Jumps to Per Cent.
In 1887 this pay roll tax jumps to .
per cent and in 1888 it goes to per
cent, this rate to stand indefinitely.
No contribution is required from en-
ployes, on the theory that any taxation
eventually will be passed on to the
consumer. AS an inducement to
maintaining employment stability, the
law provides for reduction of the rate
to 11a per cent or increase to per
cent after 1941, depending upon rec
ord Of employe turnover.
Faced with the necessity Of begin
ming this tax collecting early next year,
the local board drew up tents tive regu-
lations for operation of the law nearly
two months ago. Early in November
hearings were held and the questions
and objections of some Of those at
tending have resulted in new proposals.
Final regulations. however. have not
been drawn.
Included in the first plan Of the
District board was the suggestion that
a card-index record of every employe
in the so-called eligible occupations
be kept. Such a procedure, it was
admitted, would necessitate extensive
bookkeeping by large business con-
Germs, thus requiring additional cier-
ical personnel. AS an alternative, it
has since been suggested that all
employees be registered on January ]
and then be divided into two cate
gories-permanent and temporary.
Returns Plan Studied.
For the permanent list no individ-
ual monthly return would be required,
all such employees being covered in
a blanket report. A return would be
made on each temporary employe
and a separation" report would be
submitted for any employe leaving
the permanent listing.
This plan, and two proposals for
amending the law itself. have received
considerable attention from the local
board and z. Barrett Prettyman, cor
poration counsel. who Is working with
the board.
First of the amendment proposals
Is that q fiat rate Of Dement'S be estao-
lished instead Of using the comphcat-
ed formula now provided. The present
regulation requires detailed informa-
ton on wages earned. length Of EN-
ployment and similar data. the benefit
then to be 40 per cent Of average
weekly wage, plus allowance for de-
pendent spouse and children.
Individual Reserve Proposed.
- kA lar ornandr1Ar1t
proposals Is that the individual plant
reserve system, instead Of pooled fund
system, be adopted for the District.
The former system, contained In the
Wisconsin and Utah laws, allows
company to contribute to a trust fund
for its own employees and limit contri-
buttons after 1t reaches certain
steady level. In such system con-
Germ with stable employment record
Is not forced to continue tax contribu-
tions to bear the unemployment bur-
den caused by another concern with
rapid personnel turnover
In addition to the problems involved
in the almost immediate application
Of the local unemployment compen-
sation law, employers also are await
ing instructions on the Federal phases
of the unemployment compensation
program and on the taxes to be levied
for the old-age insurance program.
In the former case, q Federal re-
turn for the year 1896 must be made
during the first quarter of 1887. The
rate Of the Federal tax comedies with
that of the District levy. with 90 per
cent of payments on the latter being
credited to that due on the former.
Regulations for handling Of this tax
are being prepared by the Income
Tax Division of the Bureau Of Inter-
nal Revenue, the levy applying only to
employers of eight or more persons.
Old-Age Levy Begins in 1887.
The old-age insurance taxes begin
on January 1, 1897, rate Of per cent
to be imposed on individual income
up to $4,000 yearly and in like
amount on the pay roll of the en-
ployer. In this case, the employer is
to be responsible for both his own and
his employees payments, deducting the
latter from salaries. This rate rises
gradually until both employers and
employees are paying 3 per cent each
by 1s49.
For this system, q personnel record
of every employed person must be
kept but further details on such rec
ord requirements and methods Of pay
ing the taxes have not yet been de-
termined. The Miscellaneous Tax Di-
vision Of the Bureau Of Internal Rev.
enue is working on this provision at
present.