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longer useful if it is received some length of time after a worker's layoff is just not right. The assistance is still very much needed. Moreover, the 1974 Act already allows late payment of benefits in some cases; an individual worker has up to two years to apply for benefits after his group's petition has been approved, which means that hypothetically he could receive benefits more than three years after being laid off. It seems to me to be hypocritical to argue that workers excluded by the one-year limit should not receive benefits because the assistance will arrive too late, when we are already allowing other workersto receive late payments.
NEED FOR PROMPT PASSAGE The requirement that eligible workers apply for benefits within two years of certification creates some urgency for prompt action on H.R. 4460. If the bill is not enacted well before October of this year, some workers who are now excluded by the one-year limit in Section 223 will be excluded by the two-year deadline for individual applications in Section 231 (1) (B). Although no such exclusions will occur before October, 1977, I stress the need for enactment as far in advance as possible because of the time required to inform newly eligible workers that they must apply.
There is a less technical and more important reason for urgency in acting who was despondent about his unemployment and who was concerned that this legislation would be put aside in the press of other business. I would like to quote from his letter:
“You see if this amendment stays buried, so does the hopes and dreams of my fellow employees. We were not hoping for a gift, we just hoped Congress would help us get what was actually ours ***
I have worked at Warner Gear going on 9 years, but I have been laid off over half of this. Right now my unemployment is out! I can't find a job and right now the situation looks hopeless. The only hope I had was
of getting the T.R.A. to live on and pay my bills until I could find work.
"One of my good friends (name deleted) took his own life last week because he was despondent over being laid off and having no income. I remember him telling me we would never see that T.R.A., but I told him we would get it because it was rightfully ours.
"So I hope Gentlemen you can understand why I get this sickening feeling * * *. For who is to say there won't be more of my fellow employees take the same course of action that (name deleted) took, and that list might just include me.
"I am not trying to threaten anyone, I am just trying to impose on you the importance of this bill. I don't feel sorry for myself, whatever my fate may be, but I feel sorry for all the Congresspersons who set up there in their own little world afraid to step outside it."
"I realize this letter probably won't be read by Congress or maybe no one else, and it probably won't have any impact on the T.R.A. amendment, but it might help me just by getting it off my chest ***."
Mr. Chairman, I have told this man about today's hearing, and I have assured him that this subcommittee is concerned about the problem he and others face. It is important that we consider the amendment carefully, but let us not lose sight of the needs of the people the adjustment assistance program was designed to help. INTER-OFFICE COMMUNICATION
February 18, 1977. To: Helen Kramer From: Leonard Page Subject : Amendment of One Year Limit Under Trade Act.
The Department of Labor has opposed extending the one year time limit between loss of employment and filing for TRA benefits on the grounds that employers may not keep the proper records longer than a year. (1) Employer records are used to determine whether there have been a significant loss of employment, and (2) a drop in production or sales related to a product squeezed
119 U.S.C. $ 2273(b)(1).
by imports. However, employers should already be maintaining both employment and production/sales records adequate for TRA purposes longer than a year.
The Department of Labor's Own Wage and Hour Division require that employers keep for two years: "all basic time and earning cards or sheets of the employer on which are entered the daily starting and stopping time of individual employees, or of separate work forces, or the individual employee's amounts of work accomplished *** when those amounts determine *** earnings or wages" ? and "all schedules or tables of the employer which establish the hours and days of employment of individual employees or of separate workforces." 3 That division also requires that they keep payroll records three years. The records kept for two years (and probably those for three) are undeniably adequate purposes of the TRA Employment Standard.
In addition, the IRS requires that employers keep for four years (after the applicable due date of the tax return) records for each employee of: "the total amount and date of each payment of remuneration *** and the period of services covered by such payment." & The determinations of group certification and probably individual eligibility can accurately be made from these records. Any lingering doubt about individual eligibility can accurately be resolved at hearings by the delegated state agency, which must be done already.
If individual time cards and schedules are considered crucial, amendment of the Trade Act could still extend the time limit beyond two years merely by imposing the requisite record retention as part of the amendment.
Finally, businesses are retaining the requisite production/sales records well beyond a year. They are required to “keep such permanent books or records, including inventories, as are sufficient to establish the amount gross income" "so long as the contents thereof may become material in the administration of any internal revenue law." ? Prosecution for fraud may begin up to six years after a return has been filed. Thus, firms should keep the records of the sales/production of individual products underlying the bottom line of their returns at least six years.
Mr. GIBBONS. Thank you, Mr. Sharp.
As I recall in your bill last year, you had an exact date of certification that, when a significant number of workers in a firm were laid off, it sort of triggered the running of the time for application. Your new bill, as I understand it, has a 2-year cutoff date instead.
Mr. STEIGER. No, 1 year.
Mr. SHARP. As a result of testimony by the Department of Labor that they felt that open-endedness might drag this out too long, we acknowledged that perhaps some kind of limit, even though it would still be arbitrary, would be of value. We felt that 18 months to 2 years was necessary.
It is very clear that some organizations simply cannot put together the data in order to prove that it was import problems that actually caused the layoff of these individuals.
Of course, really what we are correcting with this 2-year retroactivity provision is a situation which developed because of the newness of the program.
Mr. GIBBONS. Did any of the workers in your area qualify?
Mr. SHARP. Yes, they did. As you can imagine, that has heightened the problem. To give you an example, at the Warner Gear
2 29 CFR $ 516.6(a)(1). 3 29 CFR § 516.6(a) (3).
29 CFR 8 516.5 (a). 5 26 CFR $ 31.6001-1(e) (2). 6 26 CFR $ 31.6001-5(a) (2). 7 26 CFR § 1.6001-1(a) and (e). 8 26 U.S.C. $ 6531.
plant certain of the individuals went to the unemployment office and asked about the program early on. They were told that no such program existed or there was no awareness of it at the local government office. - a - - This added to the delay in making any kind of petition for eligibility. Finally, once the local workers, learned elsewhere that they might be eligible, they filed their petition. It was certified that this was a proper petition, that these people had been laid off because of imports, and that they would be eligible. Unfortunately, a whole series of employees, because of the failure to file immediately, simply are not eligible, while others in that plant are and have received benefits under the act. Mr. GIBBoss. Did any of these workers who received adjustment assistance there get any meaningful training for other employment? Are you aware of that? Mr. SHARP. I am sorry I am not aware of it. My general impression is that no effort was made in the area of training, that they did receive the additional compensation, but that it was pretty much up to them to seek other employment or wait until at least some of the employees were able to be hired back at the Warner Gear plant, itself. Mr. GIBBoNs. You testified last year, I think you will recall I said I was going to check on what they were doing in my own area about adjustment assistance. I did check that same day. I could not find any evidence that anybody knew very much about adjustment assistance. I checked just as recently as yesterday, and I find the same situation. I am really disturbed that apparently very little is being done about it. Maybe my area is unique. I have 10, 12 percent unemployment in my area. Maybe it is not caused by this particular problem, but, even if it were, I don't know how anybody would ever find out about it. Mr. STEIGER. Do we import any oranges? Mr. Gibbons. We import a lot of other things through our ports down there. Mr. SHARP. As you recall, Mr. Chairman, from the hearing last fall, the Labor Department produced a pamphlet that now is available where you can find it. I understand that it may be found now in Muncie, Ind., in the unemployment office. For a long time, it was not there, and the local employees of the office were unaware of the rules of the program. Some of them apparently were not even aware of the existence of the program. As a result, you can understand that a man or woman on the line at the factory simply did not get the word in time and are perhaps doubly bitter over the fact that some of their fellow workers managed to receive eligibility because of some arbitrary time limit, and they could not. Very frankly, a lot of these people had become very skeptical about our trade policy prior to this, and the failure of the Federal Government to respond to their individual needs has only heightened their opposition to the Government policy.
Mr. GIBBoNs. I want to thank you for personally bringing this matter to our attention and for what you have done, not only for your constituents, but really to help make what can be a workable program a little more workable. It is going to take a lot more work on all of our parts I am afraid though, before we can move some of the people off dead center on this. Mr. Pike, do you have any questions? Mr. PIKE. No questions, Mr. Chairman. Mr. GIBBONs. Mr. Jones? Mr. Joxes. I have no questions. Mr. GIBBoNs. Mr. Jenkins. Mr. JENKINs. I have no questions. Mr. GIBBoNs. Mr. Steiger had to go to the phone. I was going to enlighten him on the orange industry. I was going to tell him, yes, thank God, a lot of oranges are imported into Florida. We do not import them as oranges. We import them as orange concentrate, and we use that to blend with other Florida fruit juice, Mr. Steiger, so that when the Florida crop is too sweet, we can get some sour juice from other countries to keep the concentrate all at a level. We get it from Brazil and places like that. We do import other things, and we do import oranges. Mr. STEIGER. I appreciate the jazzy clarification of that. First of all, I want to thank Phil Sharp not only for his statement but for giving us this imported key chain that the UAW was passing out. It is the first gift I have ever gotten from CAP. Ordinarily, they give it to my opponent, not to me. I am ever so grateful for that. Mr. SHARP. I appreciate your gratitude, but I am not responsible for that. Mr. STEIGER. I assumed you had brought gifts as well in an effort to entice us into supporting this bill. How did we get to this cost of $40 to $53 million? Mr. SHARP. The Department of Labor has made that estimate. Frankly, their estimate last fall in their testimony was 70 million. We challenged them at that point on where they came up with that figure, and what they have done, as I understand it, is to take what has been the average experience under the program. They know how many individuals were excluded because of the 1-year eligibility. That, frankly, comes out to something like 11,000 workers. That would be substantially less than the $43 million. As I understand it, they estimate or guess that there well may be others who did not file petitions on time and who could become eligible if they learn about the change in the 1-year eligibility or even aware that they are eligible at all. They say this could be an additional 15,000 workers. Certainly less than half of that $40 to $53 million is certain to be a cost under the program. The other half is much less definite. They now estimate an average of 30 to 40 weeks of drawing payment even though technically an individual may be eligible for 52. That has not been the experience of the program.
Mr. GIBEoNs. Mr. Sharp, we are going to use you for Mr. Steiger and myself to carry on a dialog here. Or maybe it won't involve you. Please bear with us. Have you—in looking at that branch of the State employmen service that services your area—I know when I used to be on the Education and Labor Committee, Mr. Steiger, we looked at those things. We found those employees had the best of all worlds. If a State officer walked in and said, “What are you doing and how are you carrying out your job?”, they always could say, “Oh, well, we are paid by the Federal Government. We are under Federal regu. lation. We would like to do that for you, sir, but we cannot do that.” When somebody from the Federal Government walked in, the said, “Oh, we are State employees. We have our State laws an the regulations of our industrial commission,” or whoever it is that handles it. So they sort of proceed along using their own best judgment as to how things ought to be done. Sometimes it is pretty good. Sometimes it is not so good. I wondered whether or not this program is suffering from the fact that it has to be administered through that kind of agency. Did you run into any of that in your investigation? o Mr. SHARP. Well, certainly that was the initial response that we heard from our workers, that a lot of the problem lay at the local unemployment office which, as you know, administers several complicated kinds of programs. I can somewhat sympathize with the need of those employees to understand the complex rules of everything they must administer, and many of these individual applications came at a time when the work had been heightened at the unemployment office, anyway by the recession. While I have some sympathy for those workers, I think we need to work harder to simplify rules and regulations on their behalf, I also suspect there is not as much discipline in those organizations of the Government as there ought to be to carry this specific program out. Mr. Chairman, if I might go back one more time to the cost of the program, the maximum estimate I believe is $53 million. Most of this would be a one-time cost, we believe, to correct past inequities. It is possible there would be a slight increase in the cost of the program over the next few years as a result of this amendment. Because we assume that information about the program is now becoming much more available, there would be fewer people, fewer organizations, and fewer individuals missing the 1-year deadline. So making it 2 years instead of 1 year therefore, will not add substantially to the cost. Really what we are talking about is the true cost of the program, not an additional cost, even though, of course, it is in additional dollars to the budget, because everybody agrees these workers should have been eligible under the program as originally written, but the 1-year deadline has been a problem. Mr. STEIGER. If the chairman will yield, I have a meeting this afternoon—this noon actually—with the Interstate Conference on