Evening star., 1943-06-09
BY CLARENCE ARATA,

Utb oPPCuf tOFtoff OW.
BY CLARENCE ARATA.
Executive Secretary, Washington Board
OF Trade.
Passage of the McGehee amend
ment to the District Unemployment
Compensation Act is the elimination
Of almost four years of effort to
obtain for the District an unemploy-
ment compensat ton law which would
pe on a comparable basis to those
Of most States.
The McGehee amendment makes
three important changes in. the
existing law. These are: n ~
Expands the benefit provisions Of
the law to an extent that from an
overall standpoint this is the most
liberal law in the country.
Freezes the benefit rights of those
who enter the armed services. pre-
serving such rights until six months
beyond the time hostilities have
ceased.
Establishes in the District an ex-
perience rating system Of 1evying
employer contribution rates.
$50 for 20 Weeks
The liberalization of employees
benefit rights is indicative of a trend
throughout the country. though, as
stated above, other Jurisdictions
have not yet attained the liberality
contained in this bill. Prior to the
adoption of this amendment, the
maximum benefits payable in the
District we've $18 for .l9 weeks. Un-
der the neW provisions the maximum
is increased to $40 for 20 weeks. 1t
is the op1y law in the country which
provides for dependents allowances
and the waiting period of one week
is equivalent to the shortest waiting
period applied in any law.
The second change, that of pre-
serving the benefit rights to- those
who are in the armed services, is
obviously one of recent origin. Most
States are providing or have pro-
vided similar amendments.
New Rates Begin July !.
BY adopting the experiences rat
ing formula of levying employer tax
rates the District is now on basis
similar to that existing in 42 other
jurisdictions under the Federal
Social Security Act.
Employers will be eligible for re-
duced rates beginning July l, 1943.
Rates will vary, depending on the
individual employers employment
record, from a maximum of 81 per
cent. the present standard rate,
down to one-tenth of per cent.
Thus, for example, an employer with
a taxable payroll of 100000, who
formerly paid s2.7O0 tax, would be
liable for only Sl00 if he qualified
for the lowest rate.
Tax rate reductionst are possible
in the District for two basic reasons.
First, employment in Washington is
relatively stable and has been so
for at least the last five years. This
fact is directly related to the second,
which is the size of the District S
reserve fund, at present in excess of
s36, 600. 900. The Districts fund is
recognized by experts to be one of
the most stable in the country and
most able to withstand the impact
of a serious spell of unemployment.
Adequate Fund Guaranteed.
One of the features of the new
law Is that the adequacy of the re-
serve fund IS guaranteed There are
sections in the law which provide
that If the reserve fund goes to a
point below per cent of the preced-
ing years total payroll for the Dis
trict. then each employers rate will
be adjusted upward accordingly in
an amount sufficient to bring the
fund back up to the per cent level
For example. should the fund be re-
duced to a point which is AZ per
cent of the preceding years pay
roll, then each employers contribu-
ton. rate would be increased three
tenths of l per cent. In no event
however, will any rate be increased
above 2.7 per cent.
The size of the reserve fund at
this time and the evidence that II
is able to withstand postwar un-
employment should be comforting
to local employers for in some States
which do not enjoy a reserve fund
that is considered adequate 1t has
been found necessary to impose ad-
ditional taxes on those employers
whose employment has increased