UI Forum (ADP Unemployment Group)

Second Quarter 2017



What’s in the UI Forum? Topics include the latest changes to Unemployment Insurance (UI) laws across the country and tips on how to get the most out of your ADP service.

Best Practices: 10 Tips to Help Control Unemployment Costs

Unemployment taxes are one of the few taxes that employers can control. Even small fluctuations to an employer’s tax rate can have big monetary effects. Like other taxes, unemployment taxes represent additional overhead; however, they are different in that other business taxes are fixed by law.

Unemployment tax rates fluctuate based on the employer’s payroll and ability to control unemployment benefits charges. Unemployment taxes go into a specific fund and monies withdrawn from that account determine an employer’s tax rate. Therefore, when unemployment claims are not protested or otherwise found chargeable to an employer, it can directly affect their tax rate. A few strategic approaches can positively impact your bottom line by reducing unemployment costs.

1. Document, document, document

Effective documentation is crucial -- employers must meet the burden of proof with the state UI agency in separation cases. Documentation is different for discharges and voluntary quit situations. For the majority of discharge cases, documentation is crucial for justifying a termination decision. Remember to obtain a signed acknowledgement of policies or any changes to policies, provide these policies to employees, and (for UI purposes) retain these documents for at least 18 months.

2. Compose effective written warnings

Warnings can be an effective method of helping ensure employees understand what is expected of them. State unemployment agencies look for warnings when determining if the claimant was discharged for misconduct - and effective, clear warnings can help the employer meet that burden of proof. A clear written warning should include details of the violation, any actions needed to improve, consequences for standards not being met, employee’s action plan/comments, signature of employee, signature of issuer, and the date.

3. Manage your human resources wisely

Best practices include: performing detailed reference checks, consistent use of progressive discipline among the entire workforce, and enforcing rules and policies uniformly.

4. Utilize your ADP Unemployment Claims service

ADP is your service provider and works with you at every stage of the unemployment process—claims, appeals, hearings, charge audits, tax rate verification, best practices, unemployment reports, and client education. Don’t hesitate to ask questions of your service team or Client Relationship Manager (CRM).

5. Track unemployment costs and budget appropriately

Use ADP reports and services to track claims, monitor potential liability, and review past history to help forecast future unemployment taxes. It’s important to become familiar with the base period and benefit year in your states and use tax information provided by ADP to help ensure your budgets are adequately prepared.

6. Know the difference between voluntary resignations, discharges, and lack of work claims

A voluntary resignation, especially for non-compelling reasons, usually disqualifies the employee from receiving UI benefits. A discharge for work related misconduct is usually disqualifying. So avoid the term “unsatisfactory performance” as a reason for separation for employees particularly when the employee has performed decently in the past. The final incident should be cited as the reason for separation. Be prepared, with specific details of the final incident leading to the separation. Finally, in cases where “lack of work” is the reason for separation, this is not a reflection of employee performance -- and providing assistance to these individuals is a founding principle of the unemployment program. Other principles require that a claimant must be able to work, available for work, and actively seeking work.

7. Be prepared for hearings

Hearings require the employer and claimant present first-hand testimony of facts and events under consideration. Provide all information to your ADP hearing representative when contacted for a pre-hearing consultation and have all documents readily available during the actual hearing.

8. Appeal when warranted

An appeal is your request to the UI agency to schedule a review of your case by a hearing officer. Appeals should only be filed if you believe eligibility rules have not been properly applied and should not be made “as a matter of principle.” Keep in mind that, regardless of the separation reason, you must be prepared to present facts and evidence to the hearing officer.

9. Weigh the consequences of partial employment and layoffs

Know when employees are eligible for partial weeks of unemployment. Your CRM can provide you with state-specific guidance. In the case of layoffs, helping severed employees find subsequent employment benefits both the employer and employee. The faster a claimant returns to work, the faster he/she will cease filing for unemployment benefits.

10. Consider re-employment strategies

Helping employees find another job after a staff reduction, position elimination, or other involuntary separation can help control the duration of non-protest claims. Many states require claimants to register with their reemployment division before receiving unemployment benefits.

State Unemployment Law Updates:

Several states have enacted recent law changes that you should understand.

New York:
On November 28, 2016, SB-6469 was signed into law. This bill added subdivision 23 to Section 1, Section 511 of the existing labor law, and clarifies the non-coverage of UI for newspaper delivery persons if:

  • such person is engaged in the trade or business of the delivering ordistribution of newspapers or shopping news (including any services directly related to such trade or business);
  • substantially all the remuneration (whether or not paid in cash) for the performance of the services described in paragraph (a) of this subdivision is directly related to sales or other output (including the performance of services) rather than to the number of hours worked;
  • and the services performed by the person are performed pursuant to a written contract between such person and the person for whom the services are performed, and such contract provides that person will not be treated as an employee with respect to such services for federal tax purposes.

A history and complete law of this bill can be found at:
http://assembly.state.ny.us/leg/? default_fld=&bn=S06469&term=2015&Summary=Y&Actions=Y&Text=Y&Votes=Y

South Carolina:
The South Carolina Department of Employment and Workforce (DEW) sent a communication to employers announcing an upgrade to its web portal. (Copies of these documents can be found at the end of this UI Forum document.)

Like many UI agencies, South Carolina is enhancing employer-offered services by modernizing its State Unemployment Insurance Tax System (SUITS), which should go live this fall.

Once live, employers will be able to conduct various UI tax-related account functions. We continue to work with the DEW to determine if registering for this service to impacts the receipt of claim-related documents such as those sent via SIDES.

To that end, should you receive specific messaging that encourages you to register for e-SIDES Response, please do not register for this service. As your registered TPA, we have been live on SIDES with the DEW since December 2011. Therefore if you separately register for e-SIDES Response, it could disrupt the service you receive from us.

When we receive additional details from the DEW, we can provide further direction. In the interim, please retain a copy of the attached form for future use.

Please direct any questions or concerns you may have to your CRM.

Washington:
In December 2015, the Washington Employment Security Department (ESD) sent a communication to employers about an upcoming eServices website set to be launched in January 2017. A screenshot of that mailer can be found below.

This new tool -- e-Response SIDES -- is designed for employers without a TPA, and thus no action is required by you. On your behalf, we have been live on SIDES with the ESD since October 2015, so any registration on your part for eServices could result disruption to your ADP service.

If you have already registered for eServices or have any questions, please contact your CRM Account Manager.

Wisconsin:
On March 27, 2017, the Wisconsin Department of Workforce Development (DWD) published final rules for pre-employment drug testing and its impact on eligibility for UI benefits. This established Section 108 under the 2015 Wisconsin Act 55. In short, a claimant’s benefits may be interrupted if he/she is required to submit to pre-employment drug testing as a condition of hire, subsequently fails or refuses to take said test, and DWD is notified of the results. These Rules go into effect May 1, 2017.

It should be noted that the DWD is currently promulgating a process by which the hiring employer can submit the positive test results.

Interested employers can find the complete Rules in Section 108 at:
http://docs.legis.wisconsin.gov/code/register/2017/735B/register/cr/cr_16_036_rule_text/cr_16_036_rule_text

NATIONAL UPDATES:

Many states index their WBA to the state average weekly wage and annually revise it in January. Below is a listing of those for which updated information is available:

Idaho:
 

The minimum WBA remains at $72; however, effective with new claims filed on or after January 1, 2017, the maximum WBA decreases from $410 to $405.

Illinois:
 

With new claims filed after January 13, 2017, the maximum WBA range increased from $437-$595 to $449-$613.

New Mexico:
 

While the minimum WBA will remain at $79, the maximum WBA increased from $423 to $425 with new claims filed on or after January 1, 2017.

Ohio:
 

Effective with new claims filed on or after January 1, 2017, the maximum WBA range increased from $435-$587 to $443-$598.

Oklahoma:

New claims filed on or after January 1, 2017 saw an increase of the WBA from $505 to $510.

Utah:

The WBA increased from $509 to $524 with new claims filed on or after January 1, 2017.

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