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Pennsylvania Labor Law Attorney Irwin Aronson Discusses Changes in the PA State Unemployment Benefits

October 13, 2013

Summer Worker Left Out In the Cold (

By David Falchek

A road construction worker, Nick Spencer earns most of his salary and makes most of his annual purchases in the summer, buying Christmas presents, wood pellets and household necessities he and his family will need when he is not working in the winter.

The Tunkhannock man needs that stockpile now more than ever as he finds himself shut out of the unemployment compensation he, his wife, and three children have relied upon through the winter months.

Changes approved by the state Legislature last year changed how eligibility for unemployment benefits is calculated for seasonal employees such as construction workers. Now, tens of thousands of those workers who qualified for unemployment in years past are facing the winter without that income.

Spencer, 35, works for Eastern Industries Inc. and stands on equipment in summer heat, feeding steaming 300-degree asphalt into the spreader. He drinks two gallons of water on a typical workday, which can be 12 to 14 hours in the summer months, the ideal time for road-building.

The long hours and six-day workweeks are the problem. By earning more than 50.5 percent of his base annual income in a single quarter, he cannot collect unemployment under Act 60, which took effect Jan. 1. The law reduced the quarterly earnings threshold from 63 percent, a level high enough that it didn't seem to disqualify many.

Spencer works too hard to collect unemployment.

By changing the formula, Act 60 architects knew that approximately 49,000 employees would be ineligible. Irwin W. Aronson, a labor attorney practicing in Harrisburg, called the denial of unemployment compensation to workers who pay for it "mean-spirited and unreasonable."

"Not only are workers and their families going to have to the choose between medicine, milk and sugar and shoes, they have been disqualified for an insurance for which they pay premiums," he said.

State Labor Secretary Julia K. Hearthway, in a recent editorial board meeting with The Times-Tribune, said the regular, recurrent use of the unemployment compensation system violates the intent of the unemployment safety net. The alternative to Act 60 reforms, she said, would have been across-the-board cuts in benefits or increases in unemployment compensation premiums paid by employees and employers. The state is faced with a $4 billion debt to the federal government and possible insolvency of the unemployment fund due largely to the recession and federally mandated extension of benefits that drained the fund.

"The decision was between something that impacted a small percent of the state workforce or something that affected 100 percent," Hearthway said.

Reforms that hurt the few and left the many unaffected proved politically expedient, said state Rep. Marty Flynn, D-Scranton, who took office in January. He reviewed the path of Act 60 after union leaders complained to him about staunchly pro-labor representatives from the Philadelphia region supporting changes that would clearly harm those in the construction trades. Flynn called it a case of regional politics, noting that Philadelphia is warmer than the rest of the state with a longer construction season and fewer workers affected by the change. "The southeastern Pennsylvania reps, even the pro-labor ones, knew their workers wouldn't be hurt as badly by Act 60," Flynn said. "They were told if they didn't sign onto it, the administration would come after everybody."

While defenders characterize the changes as reigning in a misuse of the program, labor advocates say the formula crafted in the 1970s specifically accommodates construction workers.

"Unemployment compensation was designed to provide safety for those who fell in and out of employment, not by their own doing, but because of the seasonality of their work," said Jack Figured, field representative for Local 5 of the International Union of Bricklayers and Allied Craftworkers. "The seasonality is not the fault of the worker."

Some human resources departments may try to schedule workers in such as way to level out their earnings, but Figured said that could hurt workers, too.

Workers trying to stay below the new threshold will likely be earning less, Figured said, because they may not be able to take advantage of work when it becomes available. Even those with the best plan could find themselves sidelined by spring rains. For example, if a rainy second quarter pushes jobs into the third quarter, that could drive up the percentage of the earnings in that quarter and make workers ineligible.

"This creates a major hardship and looming uncertainty that affect the welfare of our workers," he said.

With so much uncertainty and pressure, some fear the building trades may not be able to attract quality candidates or would lose the skilled employees they have, something that Aronson said the original unemployment law took into a account.

"The state recognized it has a deep interest in ensuring that the people who build our hospitals, schools and roads keep body and soul together in the off-season," he said. "We don't want the people with the highest skills, training and experience to leave the state and leave us with second-rate, second-class buildings and infrastructure."

In the military, Spencer built roads with the Army Corps of Engineers and when he left army, he wanted to continue to build roads. While the work can be "miserable," he enjoys it and thinks he's good at it. But he fears the new unemployment compensation gap will scare good people away from the industry.

Elizabeth Stelle, policy analyst with the Commonwealth Foundation, a right-leaning think tank, said the provisions were essential to preserve the unemployment system for all. She said it encourages people to seek work, continue paying into the unemployment system rather than tapping it.

"Because of the recession, there remains a large number of temporary and part-time positions available," she said.

Spencer's household now faces difficult choices. Asking his wife to work would derail the family's priority of helping her complete the Luzerne County Community College nursing program. He has worked through winters in the past - as a carpenter's assistant, even at a car wash. But he's not sure who would give him a job for three months. It would be at the expense of time he banks to be with his children and support his wife in her studies.

"When I'm working sun-up to sundown in the summer, I look forward to that time with my kids. It's how we live in the business," Spencer said. "What kind of a real job could I get for three months?"

Work usually dries up around Thanksgiving. He had already resolved to call his mortgage company and request a hardship deferral on his mortgage, even though he's concerned about how it may affect his credit rating. He has been rehearsing what he will say.

"I'm going to tell them I will pay, that I have every intention of paying, as soon as I can. I just can't pay now," he said. "Once I make sure we can keep the house, I can figure out the rest of it."

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