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76TH CONGRESS

3d Session

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SENATE

REPORT No. 1752

AMENDING THE RAILROAD UNEMPLOYMENT INSUR

ANCE ACT, APPROVED JUNE 25, 1938, AS AMENDED JUNE 20, 1939

JUNE 3 (legislative day, May 28), 1940.--Ordered to be printed

Mr. WAGNER, from the Committee on Interstate Commerce, submitted

the following

REPORT

[To accompany S. 3920)

The Committee on Interstate Commerce, to whom was referred the bill (S. 3920) to amend the Railroad Unemployment Insurance Act, approved June 25, 1938, as amended June 20, 1939, and for other purposes, having considered the same, report favorably thereon with amendments and recommend that the bill as amended do pass.

The committee amendments are as follows:
Page 2, line 9, insert "after June 30, 1940” after "employment”.

Page 2, line 11, insert “or as an employee representative” after "employer".

Page 2, lines 14 through 21, change the definition of “registration period” to read as follows:

The term "registration period” means, with respect to any employee, the period which begins with the first day for which such employee registers at an employment office in accordance with such regulations as the Board may prescribe, and ends with whichever is the earlier of (i) the thirteenth day thereafter, or (ii) the day immediately preceding the day for which he next registers at a different employment office; and thereafter each period which begins with the first day for which he next registers at an employment office after the end of his last preceding registration period and ends with whichever is the earlier of (i) the thirteenth day thereafter, or (ii) the day immediately preceding the day for which he next registers at a different employment office.

Page 5, table following line 13, insert“.99" after the second amount in each line of column I.

Page 8, line 5, change the semicolon after the word "unemployment” to a comma.

Page 10, line 6, delete the hyphen from “unemploymentcompensation".

Page 10, line 15, change “Provided” to “And provided further”. Page 11, line 3, delete the comma after "parlor-car service”. Page 15, line 24, change "a" to "or”.

Page 16, line 13, insert a comma after "from"; change "changes" to “charges”.

Page 16, line 14, insert a comma after "upon". Page 19, line 25, strike out "and". Page 22, line 9, strike out "or" after "enacted,". Page 23, line 1, change "Provided” to "And provided”. Page 23, line 2, insert after “That”, the following: for the purpose of registering unemployed employees who reside in areas in which no employer facilities are located, or in which no employer will make facilities available for the registration of such employees,

Page 23, line 4, insert", in such areas," after "accept" and "such" after “of.

Page 23, line 13, change": And provided further" to "; Provided”. Page 25, line 9, change "subsection" to "section".

Page 25, line 20, insert after"amount of”, the following:"annuities, pensions, or deaths".

Page 27, line 6, change the semicolon after“1940” to a comma.

COMMITTEE AMENDMENTS

The committee amendment to section 2 of the original bill makes the exclusion, for some purposes, of certain railway-labor-organization service apply only to that performed after June 30, 1940. It also places service as an employee representative within the exclusion, which is discussed hereafter in the explanation of the bill.

Another committee amendment substitutes for the 14-consecutiveday registration period provided for in section 3 of the original bill a registration period which will normally consist of 14 consecutive days but which may consist of fewer than that number if the claimant transfers his registration from one employment office to another within 14 days of the beginning of the registration period. This change will tend to reduce the number of transfers, which in many cases are made by persons who are merely traveling and not really looking for work.

The only other committee amendment which effects a change of substance is that to section 26 of the original bill, which relates to the authority of the Board to appoint persons, without regard to civil-service laws and the Classification Act of 1923, for the purpose of taking registrations of unemployed employees and performing services incidental thereto. The committee amendment limits such authority to the appointment of persons for areas in which no employer facilities are available, or in which no employer will make facilities available, for the registration of employees.

The remaining committee amendments are merely corrections of typographical errors or of minor departures from uniformity in style.

GENERAL STATEMENT

Experience during the first 10 months of operations under the present Railroad Unemployment Insurance Act indicates the need of changes to provide for more nearly adequate benefits, to simplify the administration of certain provisions, and to make others more readily understandable. The bill is intended to effect such changes. In addition to minor clarifying amendments, necessary changes in cross references, and other formal amendments, it deals with the following matters:

1. Benefit year and base year.
2. Benefit formula and rates.
3. Maximum benefits.
4. Remuneration and day of unemployment.
5. Disqualifying conditions.
6. Exclusion of local lodge and employee-representative service.
7. Reporting provisions.
8. Miscellaneous.

EXPLANATION OF THE BILL

1. Benefit year and base year.-In place of the individual benefit year extending for 12 months from the beginning of the claimant's first compensable half month, section 7 of the bill substitutes a benefit year, uniform for all claimants, from July 1 through June 30 of the following year. A registration period beginning in June and ending in July is to be treated as if entirely within the benefit year ending in such month of June.

In addition to being more understandable and less likely to cause difficulties in administration, the uniform benefit year will shorten the average interval between the exhaustion of benefit rights and the resumption of them in a succeeding benefit year. At present, the benefits of a person experiencing a prolonged spell of unemployment are often interrupted at a time when he is in greatest need of benefits; the amendment will greatly reduce the number of such cases.

The base year is redefined by section 8 of the bill as the calendar year immediately preceding the beginning of the benefit year.

2. Benefit formula and rates.-In place of the present formula, under which benefits are paid for each day of unemployment in excess of 7 in a half month, section 9 of the bill provides that during the first registration period, in a benefit year, in which a claimant has 7 or more days of unemployment, benefits shall be payable for days of unemployment in excess of 7; in subsequent registration periods in the same benefit year, for days of unemployment in excess of 4.

The provision that benefits shall not be payable in any benefit year until there has been a registration period containing 7 or more days of unemployment, and, then, in such period, only for days of unemployment in excess of 7, serves substantially the same purpose as the present waiting-period requirement but avoids certain inequities which the latter has occasioned among claimants with various patterns of employment. It also avoids difficulties which have been experienced because of the fact that the present waiting-period requirement may be fulfilled at any time within 6 months before the beginning of a benefit year; claimants who have exhausted their benefit rights have, therefore, been registering, at considerable inconvenience and expense to themselves and the Board, in order to secure waiting-period credit for use if they should be unemployed after the end of the current benefit year. Many such persons do not, of course, begin benefit years within 6 months of the beginning of the periods for which they have so registered, and such registrations, which have usually involved inconvenience and expense to the claimant and the Board, are, therefore, fruitless. Claimants will also receive their first benefit checks sooner under the new provision than under present requirements, it being estimated that the number of days intervening between the first registration and the receipt of the first check will be cut from about 38 to approximately 22.

The change in the formula relative to registration periods subsequent to the first registration period of a benefit year will also effect a reduction in the number of registration periods which are begun but never result in the payment of benefits, and thus will remove another source of considerable inconvenience to claimants and to the Board

The present benefit rates, though weighted in favor of the lowerpaid employees, have not, in conjunction with the present benefit formula, provided for the average employee benefits equal to those under most State unemployment-compensation laws. Even with the proposed benefit formula, the present rates would not provide adequate benefits. Accordingly, section 9 of the bill provides benefit rates which, under the proposed benefit formula, will produce minimum benefits of $17.50, and maximum benefits of $40 for 14 days of unemployment in a registration period, instead of a present minimum of $12.25 and maximum of $21 for the same number of days of unemployment. The following comparison of benefits for 14 days of unemployment in a registration period shows the effect of this change:

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3. Maximum benefits.- To retain approximately the present maximum duration of benefits, which, for claimants who are continuously unemployed, is about 21 weeks, section 10 of the bill establishes 100 as the basic maximum number of days in a benefit year for which benefits may be paid. To provide a longer possible duration for those employees who were qualified for benefits in the preceding benefit year but to whom benefits were payable for fewer than 100 days in such year, section 10 also provides that such employees may carry over into the current benefit year a number of days, not in excess of 50, equal to the difference between 100 and the number of days of unemployment in the preceding benefit year for which benefits were payable to them. The number of days of unemployment thus carried over is, of course, an addition to the basic maxima of such employees,

The proposed changes in the benefit formula, the benefit rates, and the maximum benefit provision will, it is believed, produce reasonably adequate amounts of benefits for employees covered by the railroad unemployment insurance system, and it is believed that they are in accordance with sound principles of unemployment insurance.

The average annual benefit cost under the proposed amendments is estimated at between $50,000,000 and $53,000,000, or approximately double the present cost. In spite of this increase in cost, however, it is estimated that a modest but entirely adequate reserve will be

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