HOUSE BILL REPORT

SSB 6294

As Amended by the House

BYSenate Committee on Economic Development & Labor (originally sponsored by Senators Newhouse, Vognild, Lee, Smitherman, Benitz, Saling, Deccio and Warnke;by request of Employment Security Department)

Providing funding for special employer services provided by the employment security department.

House Committe on Commerce & Labor

Majority Report:  Do pass with amendments.  (9)

      Signed by Representatives Wang, Chair; Cole, Vice Chair; Fisher, Jones, R. King, O'Brien, Patrick, C. Smith and Walker.

Minority Report:  Do not pass.  (1)

      Signed by Representative Sanders.

House Staff:Chris Cordes (786-7117)

Rereferred House Committee on Ways & Means/Appropriations

Majority Report:  Do pass with amendments by Committee on Commerce & Labor. (18)

      Signed by Representatives Locke, Chair; Belcher, Braddock, Brekke, Brough, Butterfield, Ebersole, Grant, Grimm, Hine, McLean, Peery, Sayan, H. Sommers, Spanel, Sprenkle, Wang and B. Williams.

Minority Report:  Do not pass.  (3)

      Signed by Representatives Fuhrman, Holland and Nealey.

House Staff:      Sandi Gray (786-7136)

AS PASSED HOUSE MARCH 5, 1988

BACKGROUND:

In 1986, Congress enacted the federal Immigration Reform and Control Act (IRCA).  Under IRCA, employers are responsible for ascertaining that all persons hired are legally entitled to work in the United States.  State employment agencies are authorized to offer certification services to employers to satisfy the employers' verification obligations under IRCA. However, Congress did not provide federal funding for the administrative costs.

IRCA has also increased the demand for services to the agricultural industry to assist employers and employees in complying with the act's provisions and to ensure an adequate supply of labor for growers and appropriate employment services for agricultural workers.  Funding for labor market information for the agricultural industry is not available to must this demand.

Some statistical information for labor market purposes is not available to the Employment Security Department because the U.S. Bureau of Labor Statistics has found that Washington's confidentiality law is not adequate to ensure confidentiality of detailed survey data.

Workers in agricultural employment are covered for unemployment compensation benefits only if the employer (1) has paid twenty thousand dollars or more in wages for agricultural labor during any quarter in the current or preceding calendar year, or (2)  has employed ten or more agricultural workers for some part of a day in each of twenty different calendar weeks in the current of preceding calendar year.

SUMMARY:

A special employer services account is established in the Employment Security Department's administrative contingency fund.  Money in the special employer services account may be expended, after appropriation, only to provide certification services to employers under the federal Immigration Reform and Control Act, to increase employment services to the agricultural industry and to fund increased collection and analysis of agricultural labor market information.

To fund the special employer services account, the unemployment insurance contribution rate for employers in 19 of the 20 experience rating classes is reduced by 0.02 percent. A 0.02 percent surtax, to be deposited in the special employer services account, is established. The new contribution and surtax rates are in effect beginning January 1, 1988, and terminating December 31, 1988.

Information obtained by the Employment Security Department from other governmental agencies or from other persons for statistical purposes will be held confidential if the information is held confidential by law or agreement or if it was obtained upon condition that it be held confidential.

Unemployment compensation coverage is extended to all agricultural employees, except for employees under the age of 18 working for agricultural employers who have not paid $20,000 or more in wages for agricultural labor during any quarter in the current or preceding calendar year or who have not employed 10 or more agricultural workers in each of 20 different calendar weeks in that year.  Employers newly covered by the act for unemployment insurance will pay contributions at the rate of 1 percent until the employer is qualified for experience rating. An appropriation of $3,500,000 is made from the special employer services account for the 1988-89 biennium.  However, if federal funding for special employer services is provided, or if state funding is included in the 1988 omnibus appropriations act, the appropriation will be reduced by the amount of federal or state funding and the savings will be deposited in the unemployment compensation fund.

The department must report on the special employer services program and alternative funding mechanisms by December 1, 1988.

Any part of the act found to be in conflict with federal law is declared inoperative.  If any provision of the act is held invalid, the remainder of the act is not affected.

Appropriation:    $3,500,000 to the Employment Security Department from the special employer services account.

Fiscal Note:      Requested February 12, 1988.

Effective Date:The bill contains an emergency clause and takes effect immediately, except that the new tax schedule applies to the rate year beginning January 1, 1988.

House Committee ‑ Testified For:    (Commerce & Labor)  Graeme Sackrison and Israel Mendoza, Employment Security Department; Becky Smith, Evergreen Legal Services (with concerns);  and Frank DeLong, Washington State Apple Advertising Commission and Washington State Horticultural Association.

(Ways & Means/Appropriations)  Graeme Sackrison and Tom Copeland, Employment Security Dept.

House Committee - Testified Against:      (Commerce & Labor)  Cliff Finch, Association of Washington Business; and Gary Smith, Independent Business Association.

(Ways & Means/Appropriations)  None Presented.

House Committee - Testimony For:    (Commerce & Labor)  The Immigration Reform and Control Act significantly affects both employers and employees.  The Employment Security Department will be unable to provide the extra services that will be needed by employers and employees because of IRCA unless funding is obtained.

(Ways & Means/Appropriations)  Same as Committee on Commerce & Labor.

House Committee - Testimony Against:      (Commerce & Labor)  Money should not be diverted from the unemployment trust fund to other department programs unless all employers and workers will benefit.  Programs for specific industry groups or employers should be funded by a user fee.

(Ways & Means/Appropriations)  None Presented.