Denying Unemployment to Seasonal Workers at Jersey Shore

Tara Nurin | May 17, 2012 | More Issues
They flip the fries and run the Tilt-a-Whirl, but a new bill argues they don't qualify for unemployment

Some of the lifeguards, bartenders, and boardwalk barkers who cater to the Shore’s summer visitors could face a long, cold winter if Trenton acts on legislation to eliminate unemployment benefits for seasonal employees.

Assemblywoman Amy Handlin (R-Belford) and Assemblymen Sean Kean (R-Wall Twp.) and Anthony Bucco (R-Randolph) have introduced a bill that would require the Commissioner of Labor and Workforce Development to identify specific seasonal jobs, define their length to any period less than 36 weeks, and deny workers who fill those jobs the opportunity to collect unemployment in the off-season.

Specifically, the bill targets workers who received reasonable assurance that they would be rehired the following season and were, in fact, rehired.

The legislation excludes construction workers and sets up separate parameters for agricultural workers.

It offers no such exceptions for the 40,000 to 50,000 seasonal employees who typically sign on to work from May to September. This disparate group includes cooks, waiters/waitresses, lifeguards, hotel/motel workers, and employees in the gaming and amusement sectors at the Jersey Shore, according to Kerri H. Gatling, Public Information Officer at the New Jersey Department of Labor & Workforce Development.

Though there’s been no related bill introduced in the Senate and no action on the Assembly bill in the Labor Committee, the legislation is just one of several recent public actions designed to curtail unemployment wages paid to seasonal employees.

“I view it as a matter of fairness to the people of New Jersey who’ve genuinely fallen on hard times and need support from our dwindling pool of unemployment funds that have been taken away by people who’ve found various ways to game the system,” said Handlin.

Meanwhile, legends persist about career lifeguards who spend winters surfing in Hawaii or elderly beach taggers luxuriously snowbirding in their Florida vacation homes – all on the taxpayer’s dime.

“That’s not happening here, I can tell you that,” said North Wildwood Mayor Bill Henfey, who’s vocal about his opposition to the curtailment of seasonal unemployment insurance.

His sentiment is echoed by North Wildwood Chief of Beach Patrol Tony Cavalier, whose lifeguarding roster has included four or five of the same unemployment collectors for almost two decades.

“I don’t know how they could survive,” he said when considering life for these full-time residents after passage of such a law. “They get $300 week from October to May. There are really no jobs here in the winter.”

The issue of cutting seasonal eligibility first arose in 2009, when the New Jersey Unemployment Insurance Fund became insolvent. To refill the coffers, the state borrowed $1.6 billion from the Federal Unemployment Account.

To keep taxpayers and employers from shouldering an average wage tax increase of up to $400 per worker to repay the debt and restore the fund, Gov. Chris Christie twice restricted the allowable increase and cut benefits to workers who’d been fired for gross misconduct. He also appointed a 12-member New Jersey Unemployment Insurance Task Force to study the ways unemployment could be reconfigured to save the state money.

Though the federal loan is expected to be paid back in the summer of 2013, the task force recommended a change in seasonal worker eligibility in a report released this past January. In it, the members noted that at least 12 other states restrict unemployment for seasonal workers and that most of these states define a season as 26 weeks or less. The report also acknowledged an inability to approximate the amount New Jersey spends on unemployment for its out-of-work seasonals.

While the task force was at work, the mayors of Cape May and Cape May Point — both in Cape May County — approached the New Jersey State League of Municipalities with a request to draft a resolution in support of just such a cutback.

Cape May Point Mayor Carl Schupp says he thinks it “just isn’t proper” to spend taxpayer money to sustain a municipal worker for six months outside of the three he works.

“Why should he receive unemployment? If he wants to work longer he should look for a year-round job,” he said.

Though Schupp learned that New Jersey typically requires official policies to apply to both the public and private sectors, he initially intended for his recommendation to include just public employees. It’s an issue that became personal to Schupp, who thinks the 2010 Census overestimated his winter population at 193, when he says he spent between $12,000-14,000 of his $1.6 million annual operating budget on unemployment for a few seasonal workers.

Mike Cerra, senior legislative analyst for the League of Municipalities, doesn’t believe this is a small-town versus large-town issue. But he does acknowledge the burden can affect smaller towns like Cape May Point more heavily.

“I think this bill has an impact on anyone with a seasonal workforce . . . and when you’re talking about public entities it’s reinforced even more. In particular, when these small shore towns get hit with a bill,” Cerra said.

After hearing no opposition from any of its members, large or small, the league adopted a resolution in November 2011 to request a legislative definition for seasonal employment as it relates to period of employment. Though it’s not working with lawmakers to craft policy, it did revise its resolution this spring to formally support the Handlin bill. Meanwhile, 22 municipalities have passed their own resolutions of support, including Monmouth County’s Sea Bright, whose population is less than 2,000.

“It was the sentiment of Council that most individuals know they’re fully seasonal,” said Borough Administrator Richard Kachmar. “[Paying them unemployment] imposes an unfair tax on the rest of the municipality when the season ends.”

Kachmar says the passage of a unemployment reform law would do little to affect the citizens of Sea Bright, since almost all of its seasonal workers are full-time students or retirees on fixed incomes who’re already ineligible for unemployment.

But in North Wildwood, whose year-round population of 5,000 grows tenfold during the season, Mayor Henfey says the elimination of unemployment benefits could be cataclysmic. To provide safety and services to all those visitors, he hires 165 part-time employees to supplement his full-time staff of 100. The size of the police department doubles and seasonal hires swell the ranks of fire fighters, public works employees, tourism officials who post themselves on the boardwalk, and lifeguards, who multiply from one in the off-season to more than 60 in season.

Perhaps surprisingly, North Wildwood spent just $12,000 on unemployment insurance for seasonal workers last year because only 28 percent of those workers collected. Henfey considers this nothing more than the cost of doing business.

“If we couldn’t get these people to help we wouldn’t be able to give the quality of life services we give,” he said. “They might not be able to take a seasonal job at $10 per hour. This economy forced a lot of people to retire before they wanted to. This is helping them survive. Are you going to force them into food stamps in the wintertime? Take away their dignity?”

Despite his concern, no formal opposition has thus far mobilized against the League of Municipalities’ resolution, the task force recommendations or the Assembly bill. And at the national fall conference of the United States Lifesaving Association, a nonprofit, professional association that represents the class of seasonal workers most mentioned in media coverage, the issue wasn’t even raised.

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