Evening star., 1935-09-14
BY JOHN C. HENRY.

CuIy WOyIuW.J
BY JOHN C. HENRY.
Accepting the written opinion of
the Presidents Committee on Eco
nomic Security that unemployment
compensation is a front line of de-
fense" against economic insecurity and
unhappiness, Congress followed the
committees recommendation in in
cluding in the social security act pro-
vision for Federal-State cooperative
unemployment compensation system.
The outline of the plan is set forth
in Title III of the act with the tax
ing provisions being in Title TX.
Anxious to encourage the States
to enact and administer their own
systems, the Federal law is designed
to offer inducements toward this end
and to create a competitive condition
which would not be unfair to those
States that do take such steps.
To begin with, the Federal law offers
to assume the administrative costs of
the State systems and authorizes
yearly appropriation Of $4e, 900 900 to
then provides that State unemploy-
ment compensation laws must be en-
acted and submitted to the Social
Security Board for approval, at the
same time establishing certain mini
mum requirements for such approval.
State Qualifications.
Among these qualifications which
a State system must have in order
to receive the Federal administrative
grant and to receive the tax credit
provided in Title TX are the following:
Proper administration.
Payment of compensation solely
through public employment offices or
other approved agencies.
No compensation to be payable until
at least two years after contributions
begin.
State unemployment fund to be de-
posted with the unemployment trust
fund Of the United States Treasury.
Money withdrawn to be used solely
for payment of compensation, ex-
elusive Of administrative expense.
Compensation not to be denied any
eligible individual for refusal to ac-
cept work If ID the position vacant
Is due directly to strike, lockout or
labor dispute; CD the wages, hours,
or conditions of work are substan-
tally less favorable to the individual
than those prevailing in the locality,
or go If the individual would be
required to join a company union
or to resign from or refrain from
joining a bona fide labor organiza-
tion.
United States Taxation on Employers.
The Federal taxation necessary to
carry out the Federal part of this
program is to be levied on employers
only, with those engaging fewer than
eight employees not being subject to
the tax. In addition, the following
lines of employment are exempt:
Agriculture, service on vessel, domes-
tic service in private home, service
In employ of member Of family, public
and employment by non !
profit religious or charitable institu- |
tion. Employment must be within 20
weeks Of single year.
The rate for this Federal taxation |
is set at per cent of total wages |
in 1886, per cent in 1887 and 3
per cent from 1888 on. Against this
Federal levy employers are to be al
lowed a credit up to 80 per cent for
any contribution or tax paid to an
State unemployment COM
pensation system. After 1887 addi-
tional credit Is also allowable to
any employer who, because of IA
yorable employment experience or
adequate reserves, is permitted by |
the State law to reduce his payments.
With the universal taxation es-
tablished as a means Of equalizing
competitive conditions so that States
with their own systems will not be
placing their employers at a disad- |
vantage as compared with those of |
g. neighboring State, and with ad- |
ministrative aid offered, it is the |
expectation of Federal officials that |
the States will fall into line with |
speed. Otherwise, it is
pointed out, the employers will be
paying the tax to the Federal Gov
ernment, but vii, be receiving no
credit for the purpose Of taking care
Of their own unemployed.
Seven States Have Laws.
At the present time eight States !
and the District of Columbia have
compensation laws,
most Of them enacted within the past |
year or so. Although some minor alter
ations may be necessary, all of these are
to qualify without difficulty
for approval of the Social Security i
Board. These States are Alabama, Cali
fornia, Massachusetts,, New Hamp-
shire, New York, Utah, Washington
and Wisconsin. In addition Nor"h
recently passed an enabling
act by which the Governor and coun-
ell are given power to designate a
commission to administer system
of unemployment compensation in
to the pattern set forth
IN the national act.
Some of the major provisions Of
these State acts follow:
California-Affects employers of
four or more @rkers; taxes both |