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Bill Aims to End Jobless Benefits for Privately Contracted School Workers

January 21st, 2014

The Georgia House is once again considering a bill that would bar privately contracted school workers from collecting unemployment benefits over the summer.

Some Georgia school districts, to save money, contract out bus driving and other services. Over the years, it’s become common practice for these private contractors to pay their workers for nine months, then tell them to file for unemployment during the summer, even when they expect the workers to return the following school year.

At a House Industry and Labor subcommittee meeting Tuesday, Georgia Labor Commissioner Mark Butler testified in support of House Bill 714 and said contractors are abusing the state unemployment system.

“They can go in and tell a school system we can save you 20 percent and yea they can save them money because now they don’t have to pay them as much…they can turn around and let the unemployment system pick it up,” said Butler. “These employers are wrong. I don’t think its ethical and I don’t think it’s right.”

He says it’s costing Georgia businesses who pay into the unemployment trust fund $8-10 million per year.

Butler has been trying to stop the practice since 2011, when the labor department adopted new rules to halt the pay-outs. Federal officials intervened and said Butler was breaking state law. In response, Butler last year pushed legislation aimed at changing state law, but it failed on the last day of session, and the state was subsequently forced to pay $8 million to more than 4,000 seasonal workers who were denied benefits.

At the subcommittee meeting, Democrats, labor groups, and a few bus drivers like Jimmy McMillon protested the bill. McMillon testified that it punishes employees, not the contracting companies.

“It’s not our fault that the companies come here with this type of employment. We have to work somewhere. We don’t want to be out on the street,” said McMillon.

But the bill’s sponsor, State Rep. Mark Hamilton, R-Cumming, stressed the target of the legislation is solely the contracting companies. Beyond that, he hopes it spurs school districts to take a fresh look at whether contracting out certain services is the right move for their communities.

“This may drive home that some of those school districts say you know what – the people that bring your kids to school every day, this is impacting them. Maybe we need to look at this contract and find out if it’s the best solution for our community,” said Hamilton.

The subcommittee approved the bill by a 6-5 vote. It now moves to the full Industry and Labor committee.