UI Forum (ADP Unemployment Group)
Second Quarter 2012
Changes to Unemployment Insurance Integrity Regulations and State Information Data Exchange System
Unemployment Insurance Integrity Regulations
Last year, President Obama signed the Trade Adjustment Assistance Extension Act of 2011 into law. This added a new subsection to the Federal Unemployment Tax Act (FUTA), prohibiting states from relieving employers of charges to their unemployment tax account when both of the following exist:
- A payment was made because the employer, or an agent of the employer, was at fault for failing to respond timely or adequately to the request from the agency for information relating to the claim for compensation.
- The employer or agent has established a pattern of failing to respond timely or adequately to such requests.
Individual states have until October 21, 2013 to comply with this new federal requirement. ADP is closely monitoring state legislative activity and will inform you of state adoptions as soon as the information is available. To that extent, we have found that West Virginia will begin to enforce this new legislation, effective July 1, 2012.
As your service provider, ADP must provide state agencies with complete and relevant separation information by the required statutory deadline. While gathering this information, your ADP Representative will advise you of what information ADP will need to respond on your behalf.
ADP is committed to assisting your organization in controlling UI costs and avoiding establishing a pattern of failing to provide timely and adequate information. Should an ADP Representative request additional information, please provide the requested detail as quickly as possible. If a claim is deemed to be at risk of not meeting state guidelines, a response, including a protest of charges or subsequent appeal, may not be pursued.
Providing complete and relevant separation information in a timely manner may minimize charges to your unemployment account.
State Information Data Exchange System (SIDES) and What It Means To You
Over the past year, ADP has been partnering with a number of state unemployment insurance agencies to implement the secure, electronic exchange of unemployment claim separation information.
As of May 31, 2012, ten states have gone live on SIDES with the ADP Unemployment Group:
Arizona Georgia Ohio South Carolina Utah
Colorado Iowa Rhode Island Texas Wisconsin
Many states have received federal funding assistance to develop the SIDES process. In return, the expectation is that these states will be effective in gathering complete and relevant separation information at the time of the initial claim, thus reducing erroneous benefits and overpayments.
Compliance Component of SIDES
As communicated in the above article, all states have until October 21, 2013 to ensure that they are in compliance with the new federal requirement that will prohibit states from relieving employers from charges for unemployment benefits under certain circumstances.
In order to provide complete, effective and timely claim responses, ADP will continue to request required separation information based on state specific regulations. It is important to note that the SIDES process will enable states to more easily track instances where inadequate or untimely information is provided in accordance with the above requirements.
How SIDES Benefits You
There are several key benefits to consider:
- Personal information regarding your former employees is more secure because of reduced handling of paper documents.
- Electronic delivery of claims to ADP will provide you with greater lead time to gather required separation information.
- Benefit overpayments and inappropriate charges to your account could be reduced when all required details are provided with the initial claim response.
ADP will continue to partner with states on boarding SIDES throughout the grace period. An additional update regarding newly implemented states will be provided this fall.
Should you have any questions regarding the unemployment insurance integrity regulations or the SIDES process, please feel free to contact your Client Relationship Manager or you may call the ADP Unemployment Group at 888-805-5142 and ask to speak with a Client Relationship Manager.