Massachusetts Division of Unemployment Assistance

The Massachusetts Division of Unemployment Assistance wishes to support the US Department of Labor proposal to amend its regulation governing combined- wage claims (CWC) and most importantly, to amend the definition of ?paying state? filed under the Federal-State UC program. Our comments are as follows: Massachusetts agrees that current technology and advocacy of certain employee organizations, employers and coworkers have directed claimants to selected States resulting in unintended consequences of ?forum shopping?. This provides more benefits to certain higher wage claimants who have never worked in, and are not seeking work in, the State where they file their UI claim. In addition to providing an advantage to certain claimants, these claims also impact the State?s trust funds, resulting in loss of federal interest and the possibility of triggering extended benefits programs due to a higher volume of claims. Massachusetts provides regular unemployment insurance benefits that are: o more generous than other states with a primary base period that is closer to the current separation from work; o longer potential claims duration of up to thirty weeks; o a high maximum weekly benefit amount, currently $600; o and dependency allowances of $25.00 per child. In addition, the Massachusetts unemployment insurance statute provides for in person initial claims filing. This allows many individuals with strong attachments to work in the state they reside to fly, drive, train, van or bus to Massachusetts to file new intrastate combined wage claims. The claims are seasonal with the majority filed in May, June and July, reflecting the nature of the construction trades and other specialized work with nuclear and electrical plants. During the month of June 2007, Massachusetts took 1,009 new intrastate initial claims from individuals with no Massachusetts wages or wages from commuter States. These claims represent 5% of all new intrastate claims reported on the ETA 5159 report for June 2007 and are more than double the 503 claims taken and reported in June 2004. On an annual basis, these claims were 2.8% of all new intrastate claims in calendar year 2006, up from 1.4% in 2004 and 3.1% of all new intrastate claims from January 2007 through the end of September 2007. Massachusetts combined wage payments to these workers, with no employment in Massachusetts, represents 55% to 60% of all interstate billings to other States. During the twelve months ending June 2006 these benefits were $41 million with payments to 6,450 individuals. Many of these claimants are at the maximum weekly benefit amount and receive double the amount of unemployment they would receive in the State they worked the majority of the time. Other unintended consequences impact the unemployment insurance program o by overstating intrastate claims and the insured unemployment rate as not all claimants immediately change to the interstate program as instructed; o difficultly in obtaining wages from some States impacting on timely and accurate payments and recovery of fraudulent overpayments; o impacting cash flow of the trust fund which could trigger a tax hike for Massachusetts employers, impacting higher additional solvency charges, impacting extended benefits program triggers, employer surcharges and/or Federal interest penalties. Massachusetts again wishes to enthusiastically support the US Department of Labor proposal to amend its regulation governing combined-wage claims (CWC) and the definition of ?paying state? filed under the Federal-State UC program.