Evening star., 1940-03-05
Group Is Named
On Job Tax
Merit Plan
Compensation Board
Agrees on Several
Changes in Law

~ .SV
Agreeing on several details of pro-
posed amendments to the District
Unemployment Compensation In
surance Act, the Unemployment
Compensation Board today appoint
ed special committee to meet next
Friday to work out recommends
ton on proposals for a merit sys-
tenn Of taxing employers.
The board by this act did not as
sure the adoption Of any merit sys-
tenn but left in the hands Of its
committee the authority to study
and bring back a recommendation
to the entire board.
The committee consists of Col.
David McCoach, jr, District Com
missioner; Daniel j. Callahan and
John A. Locher. 1t will meet Fri
day at IL am. to confer with FL
wood Seal, corporation counsel, and
John Marshall. director of the
board, on the problem. Two differ
ent plans for merit system were
under consideration at some length
this morning. One was submitted
by the Board of Trade and the other
is a system now in use in the State
of Connecticut.
Merit Plan Is Problem.
One OF the problems to be faced
by local officials is how to work out
a merit rating plan for taxing en-
ployers which will prevent taxes
for this purpose from growing into
a surplus beyond the needs of the
unemployed. The general idea of
the merit rating plan is to permit
employers with a low turnover of
personnel to pay lower tax than
those with a higher turnover.
The board made a few specific
decisions which are to be submitted
later to the Bureau of the Budget
as recommendation for amendment
OF the act. These, however, will not
go forward until a decision has
been reached on the merit plan.
The board decided that the mini
mum qualification for an unem-
ployed worker to receive compen-
sation would be that he should have
earned $50 within a year. This is
the same provision as that included
in the pending McGehee bill for
amendment of the act. 1t COM
pares with the provision in the
present law that a worker must
have been employed 13 weeks in a
year. The Board of Trade in its
proposed amendments had first rec
commended minimum of $3.50
earned in a year, but had cut that
recently to 5000.
Benefit Payments Approved.
The board approved as provisions
for actual benefit payments the
same as those carried in the Nc
Gehee bill-$5 a week minimum and
$40 a week maximum up to a max
imum of 20 weeks. The present law
has a maximum of SIS a week for a
total of Is weeks.
Regarding benefits paid to a
worker who has been able to get
part-tlme work, the board decided
that 1t would recommend allowing
him to earn by part-time work up
to 40 per cent of the benefits re-
ceived. If he earned more than that
his benefit would be cut proportion
ally.
This plan would permit worker
to obtain thorough a combination of
his part-time work and his unem-
ployment benefit total of about 70
per cent of the wage he was earning
before he became unemployed. This
is a liberalization of the present
law, which provides that the worker
can In no case receive more than 65
per cent of his average weekly wage
or SIS, whichever is lower.
The board decided to recommend
blanketing in the civil service all
employees of the local compensation
board and to provide for audit OF
tax collections under the act by the
District of Columbia auditors.
Recommends Separate Bill.
To take care of the large number
OF individual cases and discrepancies
which now are part of the McGehee
bill, the board recommended that all
this section be taken out of the bill
and incorporated in separate bill
This new measure would list each
item of overpayment or fraud or
any other discrepancy.
1t would set forth each claim in
detail. Overpayments are estimated
at about $4,000. About half of
these are estimated to have been
paid out in fraud cases which al
ready have been presented to the
district attorney for possible prose-
cution. The other half are listed
as errors.
Proponents of the merit rating
system are endeavoring not only to
prevent surplus piling up such as
the surplus now estimated at
$16.O00,000 in the fund, but also to
reduce the present tax rate which
is 3 per cent on pay rolls. Under
the proposal of the Board Of Trade
the tax rate would be on a sliding
scale from u of l per cent up to 81
per cent.
All decisions by the five-man
board today were said to have been
unanimous.
Al VAfslls "A