The Sauk Centre herald. (Sauk Centre, Stearns County, Minn.) 1886-current, 1937-02-11
Industrial Comm. Head
Answers IS Questions
Only Employers Required To Pay
Tax, Frank t. Starkey
Emphasizes

The purpose and operation of
Minnesota's new unemployment
compensation law were explained
today in a statement released by
Frank T. Starkey, chairman of the
state Industrial Commission, under
whirh department the law is being
administered.
Pointing out that the new law is
a part of the states participation
in the national social security pro
gram, Mr.. Starkey cited the Is most
Tecurrent questions asked in con-
nection with the law, and gave his
answers.
The questions and answers are:
Cd When did Minnesota adopt
it's law?
Answer: The law was adopted at
a special session of the state leg
islature in December, 1886, and ap-
proved by the federal Social Secur-
ity Board on December %.
ca What is the purpose of the
law?
Answer: The law provides for the
compulsory setting aside of unem-
ployment reserves to be used for
the benefit of persons unemploy-
ed" This is to be accomplished by
taxing employers on the totals of
their payrolls, thereby establishing
a fund out of which workers will
receive benefits during periods of
unemployment.
ray Who v,ouc fho fav9
Answer: The employer pays the
entire tax, employees not being re-
quired to pay anything. Contribu-
tons by employees are made only
under the old-age annuity, or PEN
sion program, a strictly federal
function. This calls for payments
into a common fund by both en-
ployer and employee, to provide
pensions for workers, on the basis
of their earnings, upon retirement
at age IS.
az What is the rate of the tax
under Minnesota's unemployment
compensation law?
Answer: The tax for the year of
1896 is nine-tenths of one per cent
of the total pay roll for the year
for all employers who had eight or
more employees. In addition, the
federal Unemployment compensa-
ton law imposes a one per cent
tax on employers in this same clas-
sification. However, the federal
government provides that employ
ers who are subject to the Minneso-
ia law may take credit for ninety
per cent of the federal tax in their
federal returns. That means that
the 1886 rate for Minnesota employ
ers under both laws will be only a
total of one per cent on their pay
rolls, nine tenths of the total going
to the state and one-tenh to the
Federal government.
90 How are the payments to be
made?
Answer: Originally, the tax to
both the state and federal govern
ment was payable by January 81,
1887. However, both the state and
government granted extensions,
the state until February 26, 1887,
and the federal government to
March 81, 1887. Payment of the
state tax must be made before ere
dit may be claimed in the federal
remittance.
(6) Must an employer have had
eight or more full-time employees at
all times during 1886 to be subject
to the tax?
Answer: For instance, groc-
er may employ five full time clerks,
but hires three extra helpers every
Saturday. This would subject him
to the tax, and payment would have
to be made on the entire annual
pay roll, that Of the full-time work.
ers as we'll as that of the extra help.
Furthermore, the extra help which
would bring this employers en-
ployee total to eight or more does
not have to be on a year-round bas-
is. If his pay roll included eight or
more persons only on occasional
days and those days occurred dur
ing at least 20 different weeks in
the year he would be subject to the
tax.
CD Will an employer receive a
reduction in his tax rate If he
keeps his employees steadily en-
ployed?
Answer: This cannot be definite
ly answered at this time. The law
provides that the Industrial Com
mission cannot grant any reduction
under the laws so-called merit-rat-
ing clause until benefits have been
paid for a three-year period, which
means that no reductions can be
granted until 1941.
(8) When will benefits be paid to
unemployed persons?
Answer The law provides that no
payments can be made until after
contributions have been paid in for
two years, or after January 1,
1888.
(9) Does that mean that anybody
who becomes unemployed this year
will not receive anything?
Answer Yes. The reason for this
Is that the fund must become sol
vent before any payments are made
from II.
(10) viii workers, beginning in
1888, receive benefits at all times
that they are unemployed?
Answer No. In all cases a two
weeks waiting period (for which
no benefits will be paid) must pass
before benefits can be granted. Fur
thermore. no person can receive