Md. ferreting out jobless claims cheatsThe latest monthly...


February 05, 1993|By Kim Clark

Md. ferreting out jobless claims cheats

The latest monthly audit of the state's unemployment insurance fund turned up seven Marylanders who worked while collecting jobless benefits, Maryland's Department of Economic and Employment Development has reported.

The seven were convicted of fraud, given probation and ordered to return the money.

About 1 percent of jobless payouts are taken fraudulently, says Lee Fedner, investigations chief of the state's unemployment insurance system.

But Mr. Fedner concedes he usually catches only the most obvious and unlucky criminals -- those who are reported on, or who take a legitimate job while collecting.

It is very difficult to catch someone who collects unemployment while working "under the table," which is when an employer doesn't report the wages to the state, he said.

The state has caught some clever cheaters, though.

For example, a Pennsylvania man is charged with setting up a fictitious company and laying off fictitious employees.

The man collected about $50,000 by posing as the laid-off workers, Mr. Fedner said.

He was caught during a routine search for claimants who use unissued or canceled Social Security numbers.

One of the best feels a bit of the worse

Sometimes nice guys finish last.

Just as the latest edition of "The 100 Best Companies to Work for in America" was hitting the bookstores, Preston Corp., one of only two Maryland employers that made the book's list, was hitting the skids. (The other winner, McCormick & Co., is doing just fine, though.)

After several years of red ink, the Preston-based trucking outfit saved itself by arranging a takeover by Yellow Freight System of Delaware Inc. -- a Kansas-based company that didn't make the book.

John Clemens, president of the Teamsters local that represents about 300 Preston drivers, says workers are happy that, at least, their jobs have been saved for the time being, and there haven't been any changes in management style yet.

But the impending sale, expected to be completed next month, has many of Preston's 5,700 workers worried about the company's much-praised cooperative management style.

If it is any indication, the Yellow operation in Baltimore "is more strict, more by-the-guidelines" than Preston, Mr. Clemens said.

At Preston, managers have titles like "coordinator" and form worker committees to resolve safety and other problems.

"Yellow ought to take some lessons from Preston," he said. The cooperative system "is good for the company and the workers. )) Preston got 250 suggestions from workers last year to save money."

Mr. Clemens also said that Preston could take some lessons in profitability from Yellow, which made $27 million last year.

But he insisted Preston's losses weren't caused by worker-management relations.

Preston made some bad investment decisions, he said. "It only takes one mistake" to destroy a company in today's intense competition.

Yellow spokeswoman Linda George said her company is proud that Preston made the 1993 edition of the book.

Preston will be a separate subsidiary, and its management skills "will be significant components in the future financial security of the company," she said. She added that Yellow's "conservative" management tends to run its operations by the book, but said that's not necessarily bad.

Although Yellow managers haven't decided who will manage the subsidiary, the company "intends to run profitable companies," she said.

Rise in benefits costs outpacing wage gains

The U.S. Department of Labor's latest analysis of the cost of employing an American worker showed that the cost of benefits continues to rise faster than either wages and inflation.

Meanwhile, the department says, combined employment costs rose the equivalent of 3.6 percent for the fourth quarter of 1992.

But some industries are seeing employment costs rise much faster than others. The cost of employing health services workers has risen fastest in the last couple of years, up about 20 percent since June 1989. (See accompanying chart.)

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