Legislators give initial nod to overhaul of troubled South Carolina employment agency

Overhaul of SC jobless benefits agency gets OK

COLUMBIA, S.C. — A House panel voted Wednesday to overhaul the state’s troubled Employment Security Commission after the agency’s boss told them the department hasn’t implemented any promised changes — a revelation that surprised some lawmakers.

“Quite frankly, I’m shocked and floored,” House Minority Leader Kenny Bingham said after the committee unanimously approved an overhaul.

The House panel called on interim director Sam Foster to explain what changes the agency has made to save money and limit the need to borrow federal funds to keep paying benefits. The commission had proposed several changes last month to get a head start on changes the Legislature wants.

“We have been discussing it, but we have not implemented any of them at the present time,” Foster said.

The push for the agency overhaul comes after a series of flaps: The jobless benefits trust fund went broke, the state is now relying on federal loans to cover checks and auditors said the commission didn’t do enough to head off the problems and lacked necessary accounting skills.

The Employment Security Commission offered its recommendations last month and the House backed them in a resolution that passed with a 112-1 vote on Jan. 14. Bingham noted none of the proposals, including barring benefits for people who are fired for good cause, required changes in the law.

“Those are recommendations they gave us. We asked them what can be done to shore up the fund,” Bingham said.

Foster told the committee that some of the changes weren’t so easy to make. For instance, the agency is deciding how to implement rules regarding how many weeks of benefits someone loses if they’ve been insubordinate or are drunk on the job. “There are degrees that are to be considered. How do we determine degrees of insubordination? … We have been concerned about the degree aspect of it.”

And Foster said it’s unclear how to handle blood-alcohol content test. “There’s a question of who’s responsible for doing that and how it is to be done,” including whether the employer has to conduct the test, he said.

Such changes could reduce benefit payouts. Meanwhile, the agency has not stopped a practice that allows a mass unemployment filing for workers when they have temporary plant shutdowns, a practice legislators say leads to employers gaming the system. Their laid-off workers aren’t required to seek jobs.

The bill heading to the House floor would fire the commission’s three members in January and put the agency’s operations under control of the governor as a Cabinet agency. It also would require administrative law judges to handle appeals, instead of the commissioners who now handle them. It sets up a review committee, with six legislators and three appointees of the governor, to review agency operations and screen a director. The governor would be able to fire that director at will, Bingham said.

The House panel’s action came as the Senate began debate on its own version of the legislation. Republican Sen. David Thomas of Fountain Inn wanted to attach an amendment that would require random drug testing for people getting unemployment checks.

Under his proposal, a random sample of 500 beneficiaries would be tested at first. If the test shows more than 10 percent on drugs, that would trigger a statewide test on 3 percent of jobless benefits recipients.

Unemployment recipients who test positive would have 30 days to go through a state drug treatment program and have a clear drug test in order to continue getting benefits.

Democrat Sen. John Matthews of Bowman said that amounts to a penalty that could be extended to state retirees.

“It’s not a penalty, it’s setting standards,” Thomas said.

The Senate adjourned for the day without taking action on Thomas’ amendment.

Meanwhile, Republican Sen. Jake Knotts of West Columbia, argued that the commissioners should keep their jobs in any overhaul of the agency. He said they had warned senators as early as 2004 that the unemployment trust fund was going broke and legislators didn’t take action.

“Do we need to throw the baby out with the bath water? No, we don’t,” Knotts said.

The Senate planned to continue the debate Thursday.