Evening star., 1943-06-06
Job|ess Pay System
Faces Revision Here
To Meet New Law
Employers to Contribute
Less Although Roosevelt
Regrets Cut in Toxes

WI NA SNSJ
The unemployment compensation
system in the District will be re-
vamped. reducing the rate of con-
tribution for most employers. as the
result of legislation signed yesterday
by President Roosevelt.
In signing the local bill, however,
the President said that as matter
of national policy contributions to
the Social Security system should be
increased, as a means of combating
imitation.
The new local law, an amend
ment to the District Unemployment
Compensation Act, contains de
sirable improvements" in that it
shortens the waiting period and in
creaseS the benefits for the unem-
ployed and extends the coverage, the
President said. He expressed re
greet however. that the measure will
provide for an ''untimely reduction
in the rate of contribution for the
great majority of employers in the
District.
DeplOres Reduction.
This period of inf1ationary pres
sure is not time to reduce taxes"
his statement said. This is a time
to reduce expenditures, pay off debts
and build up reserves.
Il have repeatedly called attention
OF the Congress and country to the
deslrablllty OF increasing contribu-
t1onS in all branches of the social
security system as a means of alb
Sorblng excess purchasing power
now and providing a fund from
which payments can be made in
case OF need at later time
The existing per cent levy for
social security will rise automat-
lcally to 7 per cent January l under
the Social Security Act unless Con-
gress lntervenes. An increase was
scheduled for the current year. but
congressional group put through
legislation freezing contributions at
their previous level.
Changes Proposed.
Pending IN Congress is a bill for
broad, postwar security program.
This legislation would set up a ma
tlonal insurance system containing
numerous variations from the era
die to the grave program incor-
porated in the British Beveridge
plan. and would call for 6 per cent
contributions from both employer
and employe on all wages up to
$4,000 a year.
The new local law sets up here the
so-called experience rating system,
already in effect in 81 States. Under
it. that statutory tax through which
employers finance the jobless bene-
fit fund may be reduced from 81
per cent of their payroll to one
tenth OF l per cent. if their record
of stabilized employment is suffi-
cient.
Raises Benefit Payments.
Other features of the new amend
ment are that it raises benefit pay
ments from Sl8 for 18 weeks to $40
for 20 weeks, and preserves the
benefit rights Of persons in the
armed forces.
An exemption is provided for real
estate salesman and agents, if they
are paid solely on a commission
basis. Insurance agents previously
have been exempted.
+ Although the employer contribu-
ton rate normally would be COM
puted as of June 30, the computation
date for the balance of this calendar
year will be the last day of the third
calendar quarter Immediately pre-
ceding the effective date of the act
Reserve Fund Grows.
The reduction in employer con-
tributions was inspired by the fact
that the fiat tax rate in the old law
has built up the reserve fund to a
May Is balance of s36 100000. This
reserve has grown steadily and is
believed large enough to stand any
threatened depletion. Even in 1941,
when benefit payments reached a
peak of $2,l28 329, the fund accumu-
lated additional reserves of more
than twice that amount.
AS protection against depletion of
the fund, the new law provides that
whenever the balance falls to less
than 5 per cent of the total taxable
payrolls for all employers in the
District, the contribution for each
employer is to be increased by the
percentage differential between 5
per cent of the payrolls and the
percentage then in the fund.