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Minutes for SB38 - Committee on Commerce
Short Title
Unemployment benefits for privately contracted school bus drivers.
Minutes Content for Fri, Mar 15, 2019
Chairperson Lynn opened the hearing on SB 38 and requested Revisor Charles Reimer to provide an overview of the bill.
Chairperson Lynn recognized Senator Oletha Faust-Goudeau who provided testimony in support of the bill. SB 38 would allow school bus drivers to collect unemployment during the summer months when schools are out of session. School bus drivers are of all ages, and for many, the school bus driving position has become their main source of income. Some of the drivers that find other employment during the summer months do not return and the school districts have to go through the expense of hiring other drivers with less experience. School bus drivers go through intense training, have to do safety inspections, and are in charge of our most precious cargo, our children.
The cost of training one bus driver is around $2,500. It would be less expensive to allow the bus drivers to draw unemployment over the summer months than to re-hire and re-train bus drivers. This year in the Wichita area, there were 700 positions for bus drivers and a shortage of 80 drivers. New drivers were hired from out of state and expenses were incurred for hotel rooms, food, and paying the drivers $20 to $30 per hour. Drawing unemployment for three months would be far less expensive than having to hire out of state bus drivers, and there is the benefit of retaining well-trained school bus drivers for the safety of our children. (Attachment 1)
Chairperson Lynn recognized Brett Flachsbarth, Kansas Department of Labor, who provided testimony in support of the bill. Nearly 50 years ago, Congress passed legislation that potentially denies unemployment compensation to individuals working in three categories of employment related to education: employees of an educational institution; employees of an educational service agency; and, if the state law provides, employees who provide services to or on behalf of an educational institution. Under federal law, any employee in one of these categories may not be paid unemployment compensation between academic terms if that employee has "reasonable assurance" of performing service in the following term.
The denial related to employees who provide services to or on behalf of an educational institution, such as private contractor school bus drivers, is optional under federal law. Kansas invoked this option when K.S.A. 44-706(p) was added to Kansas law in 1987, denying private contractor school bus drivers who were off work between academic terms. The law has not changed in the last 32 years. Kansas is in the small minority of states within the region who deny private contractor school bus drivers.
Other private industry employees who provide service to educational institutions are not subject to between academic term unemployment compensation denials like bus drivers. This includes private contractor food service workers and custodial staff. Even private contractor bus monitors who work for the same employer, and ride on the exact same buses being driven by the workers at issue, are not subject to the same denial of benefits. Employees of private industries, such as construction or manufacturing, who have periods of layoff or lack of work are qualified for unemployment benefits, even if the period of non-work is multiple weeks or regular in nature.
The public policy behind the employment security law is to help prevent economic insecurity for individuals who find themselves without a job through no fault of their own. SB 38 does nothing more than give the Kansans who are employed as private contractor school bus drivers the same equal treatment under the employment security law as other private sector employees. (Attachment 2)
Chairperson Lynn recognized Ray Alvarez, bus driver, First Student, Inc., who provided testimony in support of the bill. His testimony included information concerning the costs involved with training school bus drivers. In addition to the expenses involved with staff turnover, turnover affects the children in similar ways as substitute teachers. He requested school bus drivers be treated as skilled professionals and be eligible to apply for and receive unemployment insurance like other professions and trades. (Attachment 3)
Chairperson Lynn recognized John Billigmeier, First Student, Inc., who provided testimony in support of the bill. Retaining experienced bus drivers is among First Student's highest priorities and this legislation is vital to ensure the company can continue to employ professional and high quality bus drivers in Kansas. As familiar, trusted faces in the community, school bus drivers understand their important role to positively impact each student's day.
The demand for commercial drivers is severe throughout the country, and Kansas locations are no exception. Most states allow school bus drivers the opportunity to draw unemployment benefits during the summer months, providing income security between school years. Absent this income, many school bus drivers are forced to seek alternative employment over the summer months, and in many instances, do not return to First Student for the following school year.
Recruiting and developing professionally-trained school bus drivers does not happen without a significant investment by First Student. As an employer, First Student is required to pay into the Kansas unemployment insurance fund while their employees are prohibited from receiving benefits. This is unfair and inequitable and puts the company at a disadvantage to other employers recruiting skilled employees in demand.
For the above reasons, and to promote safe, professional school transportation in Kansas, Mr. Billigmeier requested the Committee's support of SB 38. (Attachment 4)
Chairperson Lynn recognized Matt Hall, Teamsters Local 696, who provided testimony in support of the bill. The Teamsters represent about 1,500 school bus drivers. The bill is a matter of equity, safety and retention.
In Kansas, people who work for private employers are able to draw unemployment when they are laid off. Private sector custodians, food service workers and monitors on school buses, can all draw unemployment while privately contracted school bus drivers cannot. Every surrounding state allows privately contracted school bus drivers to draw unemployment when they meet the requirements, while Kansas does not. This is creating an inequitable situation with this industry.
This inequitable situation leads to a retention issue for the industry. When drivers do not have economic security in the summer months, they are either forced to go without or are forced into other jobs, many times not to return. When a company loses an experienced driver because they cannot afford to work at this job anymore, the company, the student, the children and the community lose all that knowledge and experience. With $800 million in the unemployment fund, it is well past time to allow the fair and equitable treatment of this industry to prevail. (Attachment 5)
Written only testimony in support of the bill was provided by:
- Terry Forsyth, Director of Political Advocacy, Kansas National Education Association (Attachment 6)
Senator Suellenberth asked Mr. Flachsbarth for more specific details on what the unemployment costs would be should the bill pass. Mr. Flachsbarth replied he would research the question and provide additional information to the Committee.
Senator Sykes noted the importance of training for the school bus drivers and being familiar with their route.
Senator Holland asked Mr. Flachsbarth why Kansas had elected to exclude the privately contracted school bus drivers from being eligible for unemployment. He responded he had not been able to determine the reason for this exclusion.
Senator Holland asked Mr. Billigmeier about the costs which would be saved by First Student if this bill were to be approved. Mr. Billigmeier responded the costs have been estimated to be cost neutral over a five year period. While there would be a reduction in training and recruitment costs, there would be an increase in expenses related to the payment of unemployment benefits.
Senator Givens asked Mr. Billigmeier if First Student had compared the retention rate in Kansas to the retention rate in other states. Mr. Billigmeier responded the retention rate in Missouri was much better than the rate in Kansas.
Senator Givens asked Mr. Flachsbarth to review for the Committee how unemployment rates are determined for employers and the process that occurs when an employee applies for unemployment insurance.
Senator Alley asked Mr. Flachsbarth to review the unemployment benefit option available for privately contracted school bus drivers, public school bus drivers and private school bus drivers.
Senator Rucker asked Mr. Billigmeier whether First Student had completed a cost analysis for the option of paying the bus drivers on a year-round basis versus incurring the costs associated with retention and training of bus drivers with the current system. Mr. Billigmeier responded he did not have the data with him but the company had determined the passage of the bill would be cost neutral.
Chairperson Lynn recognized Kristi Brown, Kansas Chamber of Commerce (Chamber), who provided testimony in opposition to the bill. Ms. Brown began by expressing the Chamber's concern and appreciation for what the bus drivers do to take care of Kansas children. This testimony is not about the Chamber taking a position against a certain group. This testimony is about this Committee and the Legislature working very hard over the last several years to ensure the integrity of the unemployment insurance fund.
The unemployment insurance fund has become stable in the state. Adding a group that would be drawing benefits on a cyclical basis, and for reasons not originally intended, could open the door for other groups to draw from the fund and cause destabilization in the future. (Attachment 7)
Senator Holland asked Ms. Brown for an analysis from the Chamber as to what the financial exposure would be to the state's unemployment insurance fund should the bill be passed.
No written only testimony was submitted in opposition to the bill. There was no testimony neutral to the bill.
Chairperson Lynn closed the hearing on SB 38.
The meeting adjourned at 9:47 a.m. The next meeting is scheduled for March 18, 2019.
