Our purpose was to use these cases to illustrate the abuses possible by individuals under the existing law and to support our recommended disqualification provisions, which would have the effect of eliminating most or all of these abuses.

Senator MORSE. I am very glad to have you make the supplemental statement, Mr. Long. But it may be pleasing to you to know that I did not make any interpretation that you were criticizing the Board. I thought you were criticizing the provisions of the law, and sought to have the provisions of the law changed.

It gives me an opportunity to say what I intended to say anyway, that I think the personnel of our Board, administering our unemployment insurance law, are doing a remarkably fine job. They have always demonstrated a desire to hear of any complaint that might be involved in connection with any cases, find out what merits, if any, there may be in any of the complaints, and bring about whatever corrections are necessary in our own administrative processes to prevent any abuse from developing. They have a rather complex and difficult law to administer. It is one of these laws in which there has to be a considerable amount of exercise of administrative discretion. It is one of these laws that takes them right into the realm of human frailties.

As I have studied this matter of unemployment insurance, I do not know how you can use the English language in those precise ways to guarantee that those who want to adopt various types of subterfuges and who resort to different forms of intellectual dishonesty can always b detected immediately.

But I do think that the administrators of our Board are entitled to this expression of confidence, which I now make for the record. I reiterate that I did not think for a moment when you were testifying this morning that you meant to criticize the administration of the Board, but rather that you sought to criticize the present law while suggesting improvements which you think would make it a better law. Thank you very much, Mr. Long.

Mr. LONG. Thank you, sir.

Senator MORSE. Do I understand, Mr. Lee, that Mr. Hartnett, vice president and chairman of the Employment Committee, Washington Restaurant Association, cannot be here this afternoon? I am sure he appreciates the fact that we have devoted our full morning to the other witnesses, and that we could not call on him this morning. He has asked permission to file a statement. I am pleased to grant the permission.

The statement will be filed at this point. He also has with his statement an appendix material which will also be made part of the record.

(The material referred to follows:)

STATEMENT SUBMITTED BY JOHN D. HARTNETT, WASHINGTON RESTAURANT ASSOCIATION BEFORE THE SENATE DISTRICT COMMITTEE ON UNEMPLOYMENT COMPENSATION BILL S. 1074

My name is John D. Hartnett. I am the chairman of the Employment Committee of the Washington Restaurant Association and I speak for the association in this capacity.

The Washington Restaurant Association has more than 300 members operating over 600 establishments within the District of Columbia. These establishments give gainful employment to over 10,000 persons in the District of Columbia, or approximately 70 percent of the restaurant employees in the District.

Our association has been disturbed for some time by the paradox of a shortage in restaurant help and a growth in the number of persons who have qualified for benefits through work in restaurants, drawing unemployment compensation at the expense of our members rather than returning to this work.

When recently notified that you planned hearings today, we began some rush work on some of the many angles of our study. We have not had time to doublecheck our conclusions. However, we have great confidence in the accuracy of the overall picture herewith presented.

According to our survey, we conclude that under S. 1074 our employees, when they have no dependents, typically, would receive one twenty-third of their high quarter base period earnings or some 67 percent of their take-home pay in unemployment benefits.

We know in our industry that the incentive to work instead of to draw benefits must be strengthened. We feel that your committee will thoroughly explore the ratio of full-time weekly earnings to unemployment benefits. We urgently recommend that the maximum weekly benefits should not exceed $36.

At this point we would like to take up the highly important matter of disqualifications. We understand that the purpose of the so-called disqualifications is to insure that the system will be limited to paying benefits to persons that the system was designed to help; that is, people who are involuntarily unemployed through no fault of their own and who are actively seeking work.

The principal disqualifications are what are generally known as voluntary quits, discharge for cause, and refusal of suitable work when offered. In a great many of the States there are very substantial penalties, because experience has shown that such penalties are necessary to keep the system within its purpose and to see that unemployment compensation moneys are used for involuntarily unemployed people and not for persons whose idleness is their own fault.

EXHIBIT A

JOHN J. GIANCOLI,
Washington, D.C.

JUNE 17, 1959.

DEAR MR. GIANCOLI: We have a job for you. We believe you are qualified for this job. It is very similar to your job at Avignone Freres.

If you will come to our office and bring this letter with you, we shall discuss this job opportunity with you. We would like to send you on this job.

Very truly yours,

E. B. HAYDEN, Personnel Director.

JUNE 21, 1959.

WASHINGTON RESTAURANT ASSOCIATION,
Washington, D.C.

(Attention: E. B. Hayden, Personnel Director).

DEAR SIRS: I sincerely appreciate the time and effort that you of the Washington Restaurant Association have put forth in my behalf in locating a job suitable to my particular talents.

I wish to take this opportunity to inform you that for the remainder of the summer I do not intend to become employed. If your offer still stands later in the year I might take the matter into serious consideration. Please notify me at that time if you are still interested in me.

I thank you.

Sincerely,

I certify this to be a true copy.

JOHN GIANCOLI, Chef.

JOHN S. Cobrell.

We have a great many situations of voluntary quits. It is quite often the case that employees with designs on unemployment benefits never report for work when expected. There are also other cases in which they deliberately create a situation making it necessary to fire them. In fact, recently one of my employees literally dared me to fire him so he could draw unemployment benefits.

The restaurants have been and still are in desperate need of employees in every category. Yet in the first 6 months of 1959, 1,097 former restaurant employees

were drawing benefits. I have in my hand actual cases which show how the law is abused through no fault of the administration. These people can only enforce the law. So we must give them a law they can enforce so that the legitimate claimant only will benefit. To think of the enactment of legislation which would put all these claimants on the "uniform principle" of payment for 39 weeks makes the businessman shudder. We vigorously oppose such legislation.

Here are specific examples of several restaurants picked at random which point up the dilemma we are in:

Case "A"

EXHIBIT B

HARTNETT HALL, 1426 21ST STREET NW., WASHINGTON, D.C.

UNEMPLOYMENT COMPENSATION

Number of years general handyman. Went on vacation April 1959, failing to return to work. Subsequently received notice from Cleveland, Ohio, he filed claim for umemployment benefits. This man is a qualified paperhanger, painting, carpentering, and plumbing, and has regularly made a considerable amount of money outside his regular job by working for individual homeowners. This man could in our present economy easily find job first day. Presently drawing $25 per week. Undoubtedly earning considerable additional sums in private employment. He informed Unemployment Compensation Board quit work because unable to live on his salary of $175 month plus three meals a day. Disqualified 7 weeks benefits March 29 to May 16, 1959, even though paid for employment through April 16, 1959. Reason given by the District Unemployment Compensation Board for payment of benefits at this time is that the first week for which benefits become payable is the calendar week beginning with the first Sunday immediately following claim date. Disqualification begins week in which separation occurs. Even through man worked through Saturday a complete week and was paid an additional 2 weeks vacation pay, these 3 weeks were considered as part of the disqualified time, therefore, actual disqualification was only 4 weeks. Case "B"

Employed 1956 to October 2, 1958, as a baker. Good industrious worker, operated rooming house on side and was in habit of holding at least one job outside regular job. At time of leaving informed us that she was tired of working and was going to take a long vacation. Was repeatedly offered jobs through the auspices of Restaurant Association, but continued to draw unemployment benefits of $26 per week through April of 1959. During this period operated a rooming house, sold clothing door to door and sold candy door to door. Was first disqualified from benefit for a period of 5 weeks but took a job for 2 days which made her eligible for immediate benefits.

Case "C"

On

Employed as paperhanger at $14 per day from September 1957 to March 1958. During the last month of employment his production dropped to almost zero. We thought at first due to his health; forced to discharge him. However, rumor came to us that he was doing private contract work. Called his home asked if able to do work. Wife replied he was employed for next 2 weeks on private job; could talk to him that evening. Called again in evening, he said would be glad to do job but unable to do so for 2 weeks because of current contract job. basis of information, we requested the District Unemployment Compensation Board to disqualify him from further benefits. At hearing he denied the phone calls and denied the outside employment, he was warned by the examiner that if he was to draw benefits and have employment at the same time he would be subject to a jail sentence. He continued to draw benefits through October 1958. Brought out at the hearing, he was very alert to the loopholes of the law and he had previously been on the unemployment roll several times.

NOTE. Observation of this employer that the considerable publicity given to the freedom of benefits during the year 1958 caused a large number of very employable former employees to take advantage of the law and draw benefits over an extended period of time.

EXHIBIT C

HARTNETT HALL, 1426 21ST STREET NW., WASHINGTON, D.C.

This is

The following is a compilation of unemployment compensation benefits charged against Hartnett Hall during the period July 1, 1957 to June 30, 1958. the latest period for which figures have been issued by DUCB.

Blue Bell Waffle Shops unemployment benefit charges Jan. 1 to Dec. 31, 1958

One thing which distinguishes restaurant help from employees in general is that they receive additional compensation above cash wages. This is because meals are furnished them. They do not consider this pay, but the unemployment compensation and Federal tax people do. I mention this fact because of its importance in comparison with the take-home pay they receive when working and the benefits which they themselves compare with take-home pay-when they are not working. They measure cash benefits against cash pay when considering a threequarter of a year vacation at better than half pay at the expense of employer's compensation funds.

There is another important fact which is frequently lost sight of. An individual can come within the classification of "unemployed" and still earn a considerable amount. Take, for example, an individual with a weekly benefit of $20. As I understand it, he can earn at part-time work 40 percent of this $20, or $8, and still draw his full benefit. This would make nearly $29 for the week. Of course, we all know they don't report all the money they make.

We further recommend strengthening the definition of “suitable work." In the absence of an effective definition of the term, the disqualification for refusing suitable work is quite likely to be interpreted out of all effectiveness. In existing law, it is provided that "in determining whether or not work is suitable within the meaning of this section, the Board shall consider (1) the physical fitness and prior training and experience of the individual, (2) the distance of the place of work from the individual's place of residence, and (3) the risk involved as to health, safety, or morals." We recommend that additional provisions be added to the above.

In the first place, we recommend that it be specifically provided that in any event, when applying for unemployment compensation, an individual shall list all of the types of work he has done within the last 3 or 4 years; and second, that no work falling within the purview of this recent wage history would be deemed unsuitable for the individual concerned, providing only, of course, that his health had not so deteriorated that he was no longer able to be so employed. The second addition should be a restriction on the discretion as to the distance of the place of work from the individual's place of residence as affecting its suitability. We recommend a specific provision that where the individual and the place of work are both in the Washington metropolitan area, that distance alone shall not be used as a criterion.

We realize that our city and our Nation are at the moment in the midst of a rapidly changing economy, which reflects changing moods of its people and

were drawing benefits. I have in my hand actual cases which show how the law is abused through no fault of the administration. These people can only enforce the law. So we must give them a law they can enforce so that the legitimate claimant only will benefit. To think of the enactment of legislation which would put all these claimants on the "uniform principle" of payment for 39 weeks makes the businessman shudder. We vigorously oppose such legislation.

Here are specific examples of several restaurants picked at random which point up the dilemma we are in:

Case "A"

EXHIBIT B

HARTNETT HALL, 1426 21ST STREET NW., WASHINGTON, D.C.

UNEMPLOYMENT COMPENSATION

Number of years general handyman. Went on vacation April 1959, failing to return to work. Subsequently received notice from Cleveland, Ohio, he filed claim for umemployment benefits. This man is a qualified paperhanger, painting, carpentering, and plumbing, and has regularly made a considerable amount of money outside his regular job by working for individual homeowners. This man could in our present economy easily find job first day. Presently drawing $25 per week. Undoubtedly earning considerable additional sums in private employment. He informed Unemployment Compensation Board quit work because unable to live on his salary of $175 month plus three meals a day. Disqualified 7 weeks benefits March 29 to May 16, 1959, even though paid for employment through April 16, 1959. Reason given by the District Unemployment Compensation Board for payment of benefits at this time is that the first week for which benefits become payable is the calendar week beginning with the first Sunday immediately following claim date. Disqualification begins week in which separation occurs. Even through man worked through Saturday a complete week and was paid an additional 2 weeks vacation pay, these 3 weeks were considered as part of the disqualified time, therefore, actual disqualification was only 4 weeks. Case "B"

Employed 1956 to October 2, 1958, as a baker. Good industrious worker, operated rooming house on side and was in habit of holding at least one job outside regular job. At time of leaving informed us that she was tired of working and was going to take a long vacation. Was repeatedly offered jobs through the auspices of Restaurant Association, but continued to draw unemployment benefits of $26 per week through April of 1959. During this period operated a rooming house, sold clothing door to door and sold candy door to door. Was first disqualified from benefit for a period of 5 weeks but took a job for 2 days which made her eligible for immediate benefits.

Case "C""

On

Employed as paperhanger at $14 per day from September 1957 to March 1958. During the last month of employment his production dropped to almost zero. We thought at first due to his health; forced to discharge him. However, rumor came to us that he was doing private contract work. Called his home asked if able to do work. Wife replied he was employed for next 2 weeks on private job; could talk to him that evening. Called again in evening, he said would be glad to do job but unable to do so for 2 weeks because of current contract job. basis of information, we requested the District Unemployment Compensation Board to disqualify him from further benefits. At hearing he denied the phone calls and denied the outside employment, he was warned by the examiner that if he was to draw benefits and have employment at the same time he would be subject to a jail sentence. He continued to draw benefits through October 1958. Brought out at the hearing, he was very alert to the loopholes of the law and he had previously been on the unemployment roll several times.

NOTE. Observation of this employer that the considerable publicity given to the freedom of benefits during the year 1958 caused a large number of very employable former employees to take advantage of the law and draw benefits over an extended period of time.