Workforce Services Committee/Labor Renig On Benefit Enhancement Agreement

September 17, 2009

Members of the Legislature’s Workforce Services Interim Committee, chaired by Representative Steve Mascaro, (R) West Jordan, heard testimony Wednesday by Utah’s labor unions, low income advocates and AARP requesting them to remove a sunset date on a statute that reduces the Social Security Offset against unemployment insurance benefits in Utah.

In 2003, UMA and other employer representatives on the Utah Unemployment Insurance Advisory Council struck a deal with employee representatives (union officials) to share an appropriation of some $61 million of federal money set aside to support state UI trust funds. The deal attempted to limit unemployment payments to unemployed workers who are receiving Social Security benefits to the federal funds. The Feds disallowed that approach, so the statute was amended to provide the benefits with a sunset date (time certain) when it was expected that the approximately $30 would have been expended in benefits to senior unemployed Utahns. The balance of the federal money was deposited in the trust fund to shore it up against future draws.

Now that the employee portion of the funds has been expended, employer representatives, including UMA, asked the legislative committee to allow the statute to sunset at the end of June 2010 as originally agreed. Representative Mascaro, supported by the unions, AARP and others argued that a recent Utah Supreme Court case addressing social security offsets against workers compensation benefits applies to Unemployment benefits too.

Clouded by the legal arguments, those representing employees who were party to the agreement took the position that the agreement was no long supportable and should be vacated. UMA testified that the late Senator Ed Mayne, who helped craft the agreement, would have been here to reiterate what UMA was supporting, that “a deal is a deal”. Additionally, we argued this is certainly not the time to add more pressure in a declining trust fund because of historically high unemployment. Ultimately, the committee was stampeded by its chairman into supporting a motion that would remove the sunset date of the temporary benefit enhancement thus making it permanent. That move would forever become an additional burden on employers in Utah, now that the federal funds have been depleted.

This is not the end of this story. UMA will work with other business and employer interests to rectify this inequity. We are sorely disappointed that the employee side of the advisory council has chosen not to honor an agreement made in good faith. It makes one a bit skeptical about entering into agreements in the future.