Legality Of Arizona Unemployment Law Questioned 4 Days Before It Goes Into Effect

By Claire Caulfield
Howard Fischer, Capitol Media Services
Published: Monday, July 30, 2018 - 10:43am

Federal labor officials are raising legal questions about a new Arizona law designed to force people, who are collecting unemployment insurance, back to work.

In letters obtained by Capitol Media Services, Gay Gilbert, administrator of the Department of Labor's Office of Unemployment Insurance, said a provision requiring people to accept any job or lose their benefits appears to run afoul of federal law.

And she wants answers — especially with the law set to take effect this coming Friday.

Tasya Peterson, spokeswoman for the state Department of Economic Security, which administers unemployment benefits in Arizona, said her agency has been "in communication'' with federal officials, though it has not yet submitted a formal response to Gilbert's inquiries.

But Peterson said her agency understands the issue and does not believe there is a conflict with federal law. In fact, she said, Arizona has a statute that mirrors the federal law Gilbert is citing.

Senator Steve Smith, R-Maricopa, who crafted the law, however, suggested there is a possible conflict.

But Smith, now running for Congress, said that, despite the verbiage in the new law, it was not his intent to force people to take jobs where the wages being offered are far out of line with what other jobs are paying in the area — and he's convinced that won't be the result.

The language of the statute, however, does not spell that out.

Arizona has always required people receiving benefits to seek and accept "suitable employment.'' There are various factors to determine what is "suitable,'' ranging from fitness for the work, experience, prior earnings and how long the person has been unemployed.

Under the new law, however, all that goes out the window once someone has been collecting benefits for four weeks. At that point a person would have to take a job — any job — where the employer is offering to pay someone at least 20 percent more than they are collecting in benefits.

On paper, individuals who are laid off or fired through no fault of their own are entitled to collect up to one-half of what they were earning, for up to 26 weeks. The money comes out of a special fund financed by premiums paid by employers.

But Arizona limits benefits to $240 a week, no matter how much the person was earning. Only Mississippi has a lower cap.

That means someone would have to take any work that pays at least $288 a week — about $15,000 a year — no matter how much she or he was earning before.

Refuse the job? Under the law, the benefits go away.

During legislative debate earlier this year, Smith was unsympathetic to the possibility that someone who has been collecting benefits for at least four weeks could be forced to take a job that, until now, DES has considered unsuitable.

"You're supposed to go out and look for a job,'' he said, with the benefits in place to provide a financial bridge while doing that.

"We shouldn't say, 'Pretty please, here's a job, would you please take it?'' Smith continued. "If you're offered a job that pays you more than your benefit, you should take it.''

Gilbert, however, said it's not as simple as that, pointing out that federal law says people can't be denied benefits for refusing to take certain jobs.

For example, someone can't be made to replace a striker. Nor can they be required to accept work if it requires they join or refuse to join a union.

And benefits can't be cut off "if the wages, hours, or other conditions of the work offered are substantially less favorable to the individual than those prevailing for similar work in the locality.''

Gilbert wrote, "This requirement applies regardless of whether the work offered pays more than 120 percent of the individual's weekly benefit.''

Smith, after being given copies of the letters by Capitol Media Services, said it was never his intent to force people to accept just any job, or businesses take advantage of people who are afraid of losing benefits.

"That doesn't give businesses the green light to employ cheap labor,'' he said.

Consider, he said, someone looking to hire a receptionist in a community where the normal wage would be about $38,000 a year.

"But I'm going to offer him $20,000 because I think I can squeeze him,'' Smith said. "Well, you can't do that. We certainly don't condone that, and the federal law's not going to allow that to happen.''

But Smith said he stands behind the basic premise behind the bill.

"We're going to make sure that people are actually out there who need a job are going to try to get one,'' he said.

The measure does require DES to set up a return-to-work program where those collecting unemployment insurance could become an apprentice or intern at certain companies for up to six weeks, all while continuing to collect their weekly checks.