Big Dippers: Three Scoops Into State Coffers for Re-hired State Workers on Unemployment

By Melissa Daniels | PA Independent

HARRISBURG — Lawmakers are one step closer to barring state employees from collecting multiple state checks after they retire.

The House of Representatives unanimously passed a bill to ban “triple-dipping,” or the practice of state retirees who come back to work temporarily and then receive unemployment benefits.

Lawmakers passed a similar bill last session, but language conflicted with federal law and kept it from getting to the governor’s desk. So this session, Rep. Adam Harris, R-Juniata, sponsored House Bill 421 correcting that language, and the idea is once again teed up for debate.

Sen. Patricia Vance, R-Cumberland, introduced a similar measure in the Senate, calling “triple-dipping” an obvious waste.

“Really, they’re getting too much and the taxpayers are the ones who have to pay for it,” she said.

State law says retirees who come back to work cannot hold the position for more than 95 days or they lose their pension checks and health benefits.

But since the term of employment is predetermined, the state’s unemployment system considers the leave involuntary. That’s when the employee becomes eligible for unemployment compensation, on top of their pension benefits and temporary salary.

It’s a legal loophole that hundreds of people have jumped through. In 2010 and 2011, more than 450 state retirees received a combined $2.1 million in unemployment compensation, according to House calculations.

“Ethically they shouldn’t have been doing it, but we’re going to have to pass a law that says you can’t do it,” Vance said. “Taxpayers are the ones who bear the brunt.”

Harris’ House proposal would prohibit unemployment eligibility for public- and private sector employees who leave a job to protect their pension benefits. Vance’s Senate Bill 297 specifically applies to state workers.

The state expects to save about $1 million from the general fund under HB 421. Additional savings could turn up in the state’s Unemployment Compensation Trust Fund if private-sector workers are included.

In an era where pension costs are crowding out other expenditures in the state budget, closing the triple-dipping loophole won’t solve any unfunded liability crises. Vance acknowledged that compared to the state’s pension problems, it is minor.

“But I think it’s important,” she said. “My dad used to say, ‘Small leaks sink large ships.’ This is a leak that’s been dripping for quite awhile.”

Vance’s bill is headed to the Senate Labor and Industry Committee. Without much opposition anticipated, a version of the legislation could be on the governor’s desk as early as May.

Pennsylvania isn’t the only state considering post-retirement restrictions on state employees. A pending Louisiana bill would prohibit benefits for retirees who return to work, and a bill in the New York State Assembly would restrict retirees from coming back for two years.

But Pennsylvania’s situation is a bit unique because there is no clear law keeping someone from collecting unemployment benefits if they quit a job to preserve their pension.

Harris said unemployment compensation isn’t meant to fund someone who has left a job, but to assist those who are looking for work and don’t have any other income.

“The Legislature has made great strides to reform our unemployment compensation laws, and this is a commonsense improvement,” Harris said in a statement. “Each time we chip away at fraud, waste, abuse and misuse, it adds up in the taxpayers’ favor.”

Contact Melissa Daniels at melissa@paindependent.com