Henderson daily dispatch. (Henderson, N.C.) 1914-1995, 1937-09-08
STATE EMPLOYERS
STUDY PAYROLL TAX
"Pooled Fund" Plan Holds
Much of Interest In Max
ing Settlement

Raleigh, Sept. S-Employers of
North Carolina, operating under the
pooled fund" plan established by the
North Carolina Unemployment Com
pensation Act. are interested natural
" in the two other plans and COM
binations of plans Sbeing employed in
other states, the "merit rating" sys-
tenn and the reserve account" sys-
tenn, or combinations of these two
systems, or combinations of them with
the States pooled fund" plan.
The pooled fund" plan is in opera
ton in most of the states, but as is
the case with North Carolina, many of
them have provisions for studies OF
the other plans and the combinations
of plans, with view of determining
which system or combination will suit
better. The experience of time, at
least until the next session of the
General Assembly, and possibly Ion
ger. will be valuable in helping to
arrive at 4 proper decision. Repc~ g
on findings are to be made to the
Governor, for transmission to the
General Assembly, which body may
consider changes, and possibly post
DOn0 dCC1OH lOL dllOCI1O1 u" - JOe~A 30
North Cardinals pooled fund
plan provides for payment of fixed
percentage of the payrolls of all COW
cred employers into general fund,
from which all benefits are to be paid.
All employers pay at the same rate
and the fund is used for paying all
EMPLOYEES on a fixed basis. The act
nrovides that payments be credited to
the employees on a basis of their earn
il.gs. and that a record be kept OF the
payments of each employer separate
ly. but for bookkeeping and statistical
purposes only. This record will be
valuable in considering possible chan
ges in the act.
The "merit rating system PROVIDES
for q different scale of payments by
employers and gives the advantage OF
a lower rate to the employer whose
firm is on an even, level basis IN en-
ployment, while penalizing the en-
blower whose operations are spotted.
The employer who has little LABOR
turnover would thus be required 10
paw smaller contribution, because OF
the small amount required for MS en-
nloyees for unemployment oeneIlts.
A higher rate would be required CT
the employer with unstable employ
ment. whose employees are on ana OH
the payroll since in such instances
more money is required to pay unem-
ployment compensation.
The preserve account system pro
vides for separate accounts for eacA
employer, in which payments by IN
employer are credited to his account,
meaning that each employer has his
separate account. His employees,
when they become unemployed, are
paid from his own reserve account.
and if that account should become ex-
hausted before the employee gets
what is due him and for the period
he is supposed to draw compensation
payments stop. :.
The "pooled fund" plan, now IN
most general operation, treats all en-
blowers alike, the good, bad or IN
different. They all pay the same rate
whether they have regular and stable
employment, or much layoff. This
would seem to penalize the steady en-
ployer for the benefit of the less re-
g1llar employer. Moreover, all en-
plovees, those employed by all classes
of EMPLOYERS, are paid from this gen
eral fund. The suggestion of unfair
ness to employers under this plan is
answered by the statement that I'M
employment is a social problem, re-
Elected in all activities in a COM
and that employment often
is the result of conditions over which |
the individual employer has no con- |
troll and could not prevent.
The "merit rating system would
distinguish between the regular and
the irregular employer. The formers
rate would be reduced to a specified /
minimum while the latter's would be
increased to a specified maximum.
The steady employer would be re-
warded by having to pay less on his |
employees, and the unsteady employer
by having to pay more OF |
his employees The response again. il
that the steady employer has type of