State Labor Commissioner Mark Butler today acknowledged receiving notification from the United States Department of Labor (USDOL) that Georgia could be out of conformity with federal law for not paying unemployment benefits to certain educational workers during regularly scheduled holiday breaks.
In November 2011, Commissioner Butler took steps to bring employees of private companies that provide services to Georgia school systems under the same rules under which public school system teachers and employees must abide. "The process took several months," said Butler. "There were notices put in the newspaper, public hearings, and a rule filing with the Georgia's Secretary of State office. We wanted to be sure that all educational workers were being treated equally and encourage these private companies to treat their employees fairly, too."
Currently, public school employees and teachers cannot collect unemployment benefits during regularly scheduled breaks, per federal law. Many school systems have outsourced some services to private companies with promises of savings. Much of the savings are from the private companies not paying their employees during regularly scheduled breaks; such as spring holidays, Christmas break, and summer vacation.
In many cases, these companies instruct their employees to apply for unemployment benefits during these breaks. This practice has cost the state's unemployment trust fund more than $50 million over the past five years.
In late summer of 2012, the USDOL expressed concern that the State of Georgia was interpreting its own state law incorrectly on the issue of educational workers. "Many discussions occurred between our office and USDOL and an agreement was reached that if we revised some language in our Georgia statue, then USDOL would seemingly be content," Butler said.
In an official letter dated April 2, 2013, the USDOL wrote to Commissioner Butler that a hearing may be called that ultimately could threaten federal funding of Georgia Unemployment Insurance programs, unless the GDOL makes retroactive unemployment payments totaling over $8 million to certain educational worker-employees of private companies.
The official letter came only three days after the Georgia General Assembly failed to enact statute revisions supported by Commissioner Butler, the Georgia Association of Manufacturers, the National Federation of Independent Business (NFIB), the Georgia Child Care Association and others. State Sen. Fran Millar (R-Dunwoody) and others sponsored the legislation, which unanimously passed the Senate Industry and Labor Committee twice and passed 36-16 in the full Senate as part of House Bill 361. The legislation was never considered by the State House of Representatives. "The federal government was sitting on ready to issue this notice that will cost Georgia's businesses about $8 million per year," said Butler.
"If this bill had passed, our businesses and public school teachers would have been protected and this would not be happening." This legislation would have made clear a distinction that some believe
allows educational workers to be treated differently depending on whether they are employed directly by a school system or by a company contracted to perform services in educational institutions. A March 1, 2013, order by Superior Court Judge Stephen G. Scarlett, Sr. of the Brunswick Judicial Circuit found that there is "no distinction between private employers and public employers" for educational workers.
However, the USDOL disagreed and instructed Georgia that, absent a change in the Georgia law to clarify the matter, these employees shall receive retroactive payment of benefits. "These businesses are knowingly gaming the system and ripping off the rest of Georgia's employers to pay for their employees' vacation time," said Butler. "These workers deserve to be paid year-round just like their publicly-employed counterparts. Instead, their employers underpay them and their 'labor union' tells them to be happy with an unemployment check instead of a paycheck during these breaks. "We will begin making retroactive payments to these company's employees, because I will protect unemployment insurance and workforce programs for Georgians who deserve them," Butler continued. "But, we will continue to work with the USDOL and the Georgia General Assembly to assure equal treatment for all educational workers."
Unemployment insurance grants that could be affected by USDOL actions include those assisting Veterans, federal employees, Georgians whose jobs were shipped abroad, disaster assistance, and others.