Evening star., 1940-03-08
Seal Drafting
D.C.J Job Tax
Merit Bill
Special Committee
Recommends Plan
To Commissioners

Amendment of the Districts un-
employment compensation law to
provide q new employer experience
rating system as means of encour-
aging stable employment is recon-
mended in bill being prepared by
Corporation Counsel Elwood H. Seal
today; for submission to the Com
missioners.
The new merit rating plan, which
would grant lowering of the pay
roll tax rate for the individual en-
ployer accordingly as he maintains
stability OF employment for his
workers, yesterday received unani-
nous approval of a special COM
mittee appointed last Tuesday to
make STUDY of two suggested sys-
TENS of merit rating.
Col. David McCoach, jr., a men,
ber Of the special committee, an
nounced the experience rating pro-
posal would be submitted to the
other Commissioners early next
week, along with a series of other
proposed amendments already ap-
proved by the Unemployment Com
pensation Board.
He said the Commissioners prob
ably would act at their board meet
dng next Tuesday on the commit
tees recommendation for adoption
OF the experience rating plan. A
bill embodying all of the proposed
amendments then will be submitted
to the Budget Bureau and later to
Congress, Col. McCoach said.
Trade Boards Plan.
The employer experience rating
system indorsed was the one rec
) commended by the Board of Trade
and is based on plans embodied in
the laws OF Texas, Delaware, Illinois
and Massachusetts,. 1t provides that
the pay roll tax could be reduced
as low as one-haf of l per cent for
the employer having the most stable
pay roll. The proposed maximam
rate chargeable to employers under
the plan would be 81 per cent.
The theory of the merit rating
system is to permit employers with
q low turnover of personnel to nay
lower tax than those with a
higher turnover-in others words
provide an incentive to employers
to maintain steady pay rolls. Com
plex formulae are provided in the
proposed plan for calculating how
much the employers would pay un-
der the sliding scale tax
Under the plan, the local fund
FOR payment of unemployment bene-
fits would be maintained at $lO,-
600 900 to $12,000,000 The D. U. C.
Board would be directed to make
parallel increases in the nat pay
roll tax rate if the reserve fund
falls below $10000,000 and to de-
crease the tax should the fund 20
above $12,000,O00.
The present act calls for an ex-
perience rating plan to 60 into effect
next January, but this plan would
permit adjustment of the tax be-
tween ~ per cent to 4 per cent.
The pending McGehee bill to
amend the jobless insurance act
merely calls for further study of
the rating plan, and spokesmen for
Washington business have been urg-
Ing that the plan be given definite
early trial in the District.
Two General Merit Factors.
Under the experience rating pro-
cedure, each employers contribution
rate would be determined by two
factors: The employers benefit wage
ratio and the Districts overall ex-
perience. The employers benefit
wage would be the total of the wages
he had paid to workers who subse-
quently lost their jobs and became
eligible for benefit payments.
The District experience factor
would be determined by dividing the
total amount of benefits paid to all
unemployed workers by the total
benefit wages" of all employers for
the same period. Then the pay roll
tax for each individual employer
would be determined by multiplying
the ratios found in the two factors.
The amendments approved by
d. u. 9. Board last Tuesday include
one providing that the minimum
qualification for an unemployed
worker to receive compensation
would be that he should have earned
$50 within a year The board also
approved as provisions for actual
benefit payments the same as those
provided in the McGehee bill-$5 a
week minimum and $40 a week max
tmum up to 20 weeks.
Under other proposed amend
ments approved by the board, all
employees of the board would be
blanketed in the civil service and
provisions would be made for audit
Of tax collections under the act by
the District auditor.
In addition to Col McCoach. the
other members of the special COM
mittee which studied the merit plan
were Daniel j. Callahan and John
A. Locher, citizen members of the
D. U. G.. Board. John A. Marshall,
the boards director, and Corpora
tion Counsel Seal also attended yes
terday's conference.