Chap. 130.—An ACT to amend and re-enact Section 11 of Chapter One of the Acts
of the General Assembly of Virginia, extra session, 1936-1937, approved Decem-
ber 18, 1936, as amended, known and designated as the Virginia Unemployment
Compensation Act. [S B 43]

Approved March 5, 1940

1. Be it enacted by the General Assembly of Virginia, That
section eleven of chapter one of the Acts of the General Assembly of
Virginia, extra session, nineteen hundred and _ thirty-six-nineteen
hundred and thirty-seven, approved December eighteenth, nineteen
hundred and thirty-six, be amended and re-enacted so as to read as
follows:

Section 11. Administration—(a) Duties and Powers of Com-
mission.—It shall be the duty of the commission to administer this
act; and it shall have power and authority to adopt, amend, or rescind
such rules and regulations, to employ such persons, make such ex-
penditures, require such reports, make such investigations, and take
such other action as it deems necessary or suitable to that end. Such
rules and regulations shall be effective upon publication in the manner,
not inconsistent with the provisions of this act, which the commission
shall prescribe. The commission shall determine its own organization
and methods of procedure in accordance with the provisions of this
act, and shall have an official seal which shall be judicially noticed.
Not later than the first day of February of each year, the commission
shall submit to the Governor a report covering the administration and
operation of this act during the preceding calendar year and shall
make such recommendations for amendments to this act as the com-
mission deems proper. Such report shall include a balance sheet of
the moneys in the fund and in the Unemployment Trust Fund to
the credit of the State in which there shall be provided, if possible, a
reserve against the liability in future years to pay benefits in excess
of the then current contributions, which reserve shall be set up by
the commission in accordance with accepted actuarial principles on
the basis of statistics of employment, business activity, and other
relevant factors for the longest possible period. Whenever the com-
mission believes that a change in contribution or benefit rates will
become necessary to protect the solvency of the fund, it shall promptly
so inform the Governor and the General Assembly, and make recom-
mendations with respect thereto.

(b) Regulations and General and Special Rules.—General and
special rules may be adopted, amended, or rescinded by the commission
only after public hearing or opportunity to be heard thereon, of which
proper notice has been given. General rules shall become effective
ten days after filing with the Secretary of the Commonwealth and
publication in one or more newspapers of general circulation in this
State. Special rules shall become effective ten days after notification
to or mailing to the last known address of the individuals or concerns
affected thereby. Regulations may be adopted, amended, or re-
scinded by the commission and shall become effective in the manner
and at the time prescribed by the commission.

(c) Publication—The commission shall cause to be printed for
distribution to the public the text of this act, the commission’s regu-
lations and general rules, its annual reports to the Governor, and
any other material the commission deems relevant and suitable and
shall furnish the same to any person upon application therefor.

(d) Personnel.—Subject to other provisions of this act the com-
mission is authorized to appoint, fix the compensation, and prescribe
the duties and powers of such officers, accountants, experts, and
other persons as may be necessary in the performance of its duties.
For the administration of a merit system for the selection of per-
sonnel of the commission an impartial body, to be known as the
merit system council, consisting of three members, shall be appointed
by the commission. One of the members appointed by the commis-
sion shall be appointed for a term of two years, one member for a
term of four years and the other member for a term of six years;
subsequent appointments by the commission shall be for a term of
SIX years, except appointments to fill vacancies, which shall be for
the unexpired terms. No member of the merit system council shall
otherwise be employed as an official or employee of the commission.
The compensation of the members of such merit system council shall
be fixed by the commission. The merit system council shall provide
for the holding of examinations to determine the qualifications of
applicants for the positions so classified. Except for temporary ap-
pointment not to exceed six months in duration, the commission shall
appoint its personnel on the basis of efficiency and fitness as deter-
mined in such examinations, provided, however, that under any
merit system established by rules and regulations adopted by the
commission or by the merit system council under the authority of
the commission, the employees of the commission who were in the
employ of the commission on January first, nineteen hundred and
forty, and who are in the employ of the commission at the time of
said examination, shall be automatically admitted to an examination
covering the nature of the work being performed by such employee in
the position held by such employee at the time of such examination
and such employee shall be retained as an employee of the commis-
sion, provided such employee attains a passing grade in such exami-
nation, subject to rules and regulations for a merit system of personnel
administration adopted by the commission, or by the merit system
council under the authority of the commission; and, provided also,
that the commission may, in its discretion, require no such examina-
tion of one confidential secretary to each commissioner and to each
Assistant Attorney General appointed by the Attorney General as
counsel to the commission; and provided further, that no examination
may be required of any person appointed under section six-(d) of
this act. All other positions shall be filled by persons selected and
appointed on a non-partisan merit basis. All salaries or remunera-
tions in excess of one thousand dollars per annum shall first be ap-
proved by the Governor. The commission may delegate to any such
person so appointed such power and authority as it deems reasonable
and proper for the effective administration of this act, and may, in
its discretion, bond any person handling moneys or signing checks
hereunder. :

(e) Advisory Councils——The commission may appoint a State
advisory council and local advisory councils, composed in each case
of an equal number of employer representatives and employee repre-
sentatives who may fairly be regarded as representatives because of
their vocation, employment, or affiliations, and of such members
representing the general public as the commission may designate;
the members of such councils shall serve at the pleasure of the com-
mission. Such councils shall aid the commission in formulating
policies and discussing problems related to the administration of this
act and in assuring impartiality and freedom from political influence
in the solution of such problems. Such advisory councils shall serve
without compensation, but shall be reimbursed for any necessary
expenses.

(f) Employment Stabilization ——The commission, with the advice
and aid of such advisory councils as it may appoint, and through its
appropriate divisions, shall take all appropriate steps to reduce and
prevent unemployment; to encourage and assist in the adoption of
practical methods of vocational training, retraining and vocational
guidance; to investigate, recommend, advise, and assist in the es-
tablishment and operation, by municipalities, counties, school dis-
tricts, and the State, of reserves for public works to be used in times
of business depression and unemployment; to promote the re-employ-
ment of unemployed workers throughout the State in every other
way that may be feasible; and to these ends to carry on and publish
the results of investigations and research studies.

(g) Records and Reports.—Each employing unit shall keep true
and accurate work records, containing such information as the com-
mission may prescribe. Such records shall be open to inspection
and be subject to being copied by the commission or its authorized
representatives at any reasonable time and as often as may be neces-
sary. The commission may require from any employing unit any
sworn or unsworn reports, with respect to persons employed by it,
which the commission deems necessary for the effective administra-
tion of this act. Information thus obtained shall not be published or
be open to public inspection, other than to public employees in the
performance of their public duties, in any manner revealing the
employing unit’s identity, but any claimant at a hearing before an
appeal tribunal or the commission shall be supplied with information
from such records to the extent necessary for the proper presentation
of hisclaim. Any member or employee of the commission who violates
any provision of this section shall be fined not less than twenty dollars
nor more than two hundred dollars, or confined in jail for not longer
than ninety days, or both.

(h) Study.—The commission shall investigate and study the
operation of this act upon the basis of the actual contributions
and benefit experience hereunder with a view to classifying or grouping
employers, employments, occupations and industries with respect to
the frequency and severity of unemployment of each taking due
account of any relevant and measurable factors relating thereto for
the purpose of determining the practicability of establishing a rating
system which will most equitably operate to rate the unemployment
risk and fix the contribution to such fund of each employer, group of
employers, employment, occupation and industry, and to encourage
the stabilization of employment therein. The commission shall report
its findings and recommendations concerning this matter to the
Governor not later than December first, nineteen hundred and thirty-
nine, for transmission to the next succeeding session of the General
Assembly.

(i) Oaths and Witnesses.—In the discharge of the duties imposed
by this act, the chairman of an appeal tribunal and any duly au-
thorized representative or member of the commission shall have
power to administer oaths and affirmations, take depositions, certify
to official acts, and issue subpoenas to compel the attendance of
witnesses and the production of books, papers, correspondence,
memoranda, and other records deemed necessary as evidence in
connection with a disputed claim or the administration of this act.

(j) Subpoenas.—In case of contumacy by, or refusal to obey a
subpoena issued to any person, any court of this State within the
jurisdiction of which the inquiry is carried on or within the juris-
diction of which said person guilty of contumacy or refusal to obey
is found or resides or transacts business, upon application by the
commission or its duly authorized representative, shall have juris-
diction to issue to such person an order requiring such person to
appear before an appeal tribunal, a commissioner, the commission, or
its duly authorized representative, there to produce evidence if so
ordered or there to give testimony touching the matter under in-
vestigation or in question; and any failure to obey such order of the
court may be punished by said court as a contempt thereof. Any
person who shall, without just cause, fail or refuse to attend and
testify or to answer to any lawful inquiry or to produce books, papers,
correspondence, memoranda and other records, if in his power so
to do, in obedience to the subpoena of the commission, shall be guilty
of a misdemeanor, and upon conviction shall be subject to a fine of
not more than one thousand dollars or to imprisonment for a term
of not more than one year, or both; each day such violation continues
shall be deemed to be a separate offense.

(k) Protection Against Self-Incrimination——No person shall be
excused from attending and testifying or from producing books,
papers, correspondence, memoranda, and other records before the
commission or in obedience to the subpoena of the commission or
any member thereof or any duly authorized representative of the
commission in any cause or proceeding before the commission, on
the ground that the testimony or evidence, documentary or other-
wise, required of him may tend to incriminate him or subject him to
a penalty or forfeiture; but no individual shall be prosecuted or sub-
jected to any penalty or forfeiture for or on account of any trans-
action, matter, or thing concerning which he is compelled, after
having claimed his privilege against self-incrimination, to testify or
produce evidence, documentary or otherwise, except that such in-
dividual so testifying shall not be exempt from prosecution and pun-
ishment for perjury committed in so testifying.

(1) State-Federal Cooperation.—In the administration of this
act, the commission shall cooperate to the fullest extent consistent
with the provisions of this act, with the Social Security Board, created
by the Social Security Act; shall make such reports, in such form
and containing such information as the Social Security Board may
from time to time require, and shall comply with such provisions as
the Social Security Board may from time to time find necessary to
assure the correctness and verification of such reports; and _ shall
comply with the regulations prescribed by the Social Security Board
governing the expenditures of such sums as may be allotted and paid
to this State under Title III of the Social Security Act for the purpose
of assisting in the administration of this act.

The commission shall further make its records available to the
Railroad Retirement Board, created by the Railroad Retirement Act
and the Railroad Unemployment Insurance Act, and shall furnish
to the Railroad Retirement Board at the expense of the Railroad
Retirement Board, such copies thereof as the board shall deem neces-
sary for its purposes in accordance with the provisions of section
three hundred and three-(c) of the Social Security Act as amended.

Upon request therefor, the commission shall furnish to any agency
of the United States charged with the administration of public works
or assistance through public employment, the name, address, or-
dinary occupation, and employment status of each recipient of
benefits, and such recipient’s rights to further benefits under this
act.

(m) Reciprocal Agreements.—Subject to the approval of the
Governor, the commission is hereby authorized to enter into arrange-
ments with the appropriate agencies of other States or the federal
government whereby individuals performing services in this and
other States for a single employing unit under circumstances not
specifically provided for in section two-(j) of this act, or under similar
provisions in the unemployment compensation laws of such other
States, shall be deemed to be engaged in employment performed
entirely within the State or within one of such other States and
whereby potential rights to benefits accumulated under the unem-
ployment compensation laws of one or more States or under such a
law of the federal government, or both, may constitute the basis for
the payment of benefits through a single appropriate agency of any
State under terms which the commission finds will be fair and reason-
able as to all affected interests and will not result in any substantial
loss to the fund.

2. An emergency existing, this act shall be in force from its
passage.