Employers are paying for undeserved unemployment benefits

Guest Editorial

By Jim Kistler

President

Associated Industries of Missouri

Jefferson City

While the rest of the world labors through an economic downturn, the Missouri Department of Labor sees no end to funding for unemployment benefits. One Labor Department official resisted suggestions for fiscal responsibility and said employers were going to pay -- one way or another.

Department of Labor officials acknowledge the unemployment trust fund is going broke, the only real question is when? At the very latest, the fund will be insolvent in 2003. Within five years, Department of Labor officials project the fund could be nearly half a billion dollars in debt.

The problem according to the Department of Labor is that employers are not contributing enough money to pay unemployment benefits. Associated Industries believes a lack of accountability within the Department of Labor is a contributing factor.

For several years, concerns have been voiced regarding the administration of the unemployment compensation program. Unemployment benefits are intended as a safety net for employees who are separated from their employment "through no fault of their own." State laws recognize an employer's right to discharge an employee for misconduct and disqualifies such an employee from receiving unemployment benefits. State law was modified in 1997 to include "a pattern of absenteeism" in the definition of misconduct.

The law seems to strike a pretty reasonable balance between the state's obligation to protect innocent citizens and an employer's right to terminate errant employees. However, the program can be broken down into two distinct parts, the system and the system operator. While minor modifications might be made to enhance the system's ability to respond to economic changes, the administration of the system is another story.

Program administrators are unabashedly pro-employee. Recently we have seen the program award unemployment benefits to employees fired for use of illegal drugs, job abandonment, alcohol use, harassment and criminal acts. The number and frequency of these types of awards are steadily increasing. I believe the lack of checks and balances in the system has allowed the Department of Labor to turn unemployment compensation into an entitlement program, completely corrupting the original intent of the law.

The Department of Labor rejects any notion that giving unemployment compensation money to employees fired for misconduct has contributed to the system's insolvency. The department acknowledges giving money to employees fired for drug use, harassment, excessive absenteeism and criminal acts. However the department believes these cases do not amount to enough money to seriously impact the operation of the system.

The Department of Labor acknowledged awarding employees fired for drug use with more than $1 million. I suspect the total for drug using employees is more in the $3-5 million range annually. It seems the department has so much money that a few million dollars wasted here and there is no big thing. Missouri employers have loudly voiced their disagreement with that particular line of thinking.

Finally, on Oct. 30, the Southern District Court of Appeals in Missouri rendered an opinion interjecting a large degree of common sense. The court opined that an employee fired for testing positive for illegal drugs, in violation of the employers established policy, "is misconduct."

This opinion is sure to be greeted with great skepticism in the Department of Labor, since they have repeatedly ruled that use of illegal drugs does not constitute misconduct. The department rulings have discounted scientific drug testing as "not credible" and have faulted employers for not asking the employee if he/she is using illegal drugs. Now there is a credible way to get to the bottom of things. Just ask that criminal if he or she is guilty!

What amazes me most is the Department of Labor's stubborn resistance to common sense applications of the employment security law. I believe most Missourians would consider ethnic harassment, chronic absenteeism and criminal activity to be sufficient misconduct to deny the individual tax dollars. Why do we want to give them tax money for their next drug buy or to support other antisocial behavior?

It is difficult to know which part of "misconduct" the Department of Labor doesn't understand. They have refused repeated requests to meet with business leaders on the subject. It seems that if the Department of Labor doesn't have the permission of union leaders, the department won't agree to discuss the issue.

Since when did the labor unions begin controlling the state unemployment system? Department officials publicly accuse Associated Industries of using propaganda to incite employers. In reality, the unjustified awards of tax money to drug users, criminals and other miscreants is enough to incite employers without the help of Associated Industries. We are just carrying the message of Missouri's employers to their elected leaders.

One thing is clear. The Department of Labor finds it difficult to defend their actions in these cases, and program administrators do not like being on the hot seat. Missouri needs leaders in the state Department of Labor who will manage the taxpayers money efficiently and direct state resources to citizens who are truly deserving.

Unemployment compensation is an employer-provided benefit for employees separated from work through no fault of their own -- not an absolute entitlement to support the illegal habits of drug users and other miscreants.