UI Forum (ADP Unemployment Group)

January 2010



“Top 10” Tips for Controlling Unemployment Insurance Costs

The Unemployment Insurance (UI) Program is unique, because it is a payroll tax cost that employers can control through human resource and claims management best practices. In today’s economy, with so much of the focus on unemployment due to layoffs, employers might easily lose sight of quits and discharges that can result in unemployment claim filings. The following “Top 10” is a checklist of best practices to better ensure a successful claim outcome and help you reduce your UI costs:

  1. Review and update, if necessary, job screening measures to see that employee candidates are suitably matched to the position.
  2. Carefully monitor the progress of a new worker, especially during the probationary period. UI claim costs are often proportional to the length of time a worker is employed.
  3. Establish clear company policies along with a consistent method for providing those policies to all workers.
  4. Do not condone violations of company policies. Policies should specify disciplinary steps, up to and including termination, and should be uniformly applied to all employees.
  5. Keep detailed and accurate records of all policy infractions and disciplinary steps, such as verbal warnings, written warnings, suspensions, etc. Be sure to record pertinent dates and facts, especially the final incident.
  6. Do not overlook voluntary quit details. Document any circumstances associated with the separation including conversations, verbal statements, written letters, or e-mail communications.
  7. Conduct an exit interview; document the stated reason for the separation or the circumstances why a reason could not be obtained. A best practice is to have at least two managers at the interview.
  8. Provide any applicable information to your ADP Unemployment Group Representative in a complete, accurate, and timely manner at the initial claim level, including: separation details, final incident, terminal payments such as severance pay, work refusal details, etc.
  9. Be mindful of deadline dates associated with any UI claim, determination, appeal, or hearing matter.
  10. When participating in a UI hearing, be sure your witness has first-hand knowledge of the former employee’s separation and can present factual testimony and/or supporting evidence.

North Carolina Amends Unemployment Insurance Law

North Carolina’s 2009 legislative session resulted in a number of amendments to the unemployment insurance law (UI), effective January 1, 2010. Details of the changes are as follows:

UI Eligibility – A person will not be ineligible for UI benefits if he or she is seeking only part-time work, if a majority of weeks of work in the person's base period include part-time work. Previously the law required an individual be found ineligible unless his or her monetary eligibility was predominately based on wages from part-time work; he or she was actively seeking and willing to accept work under the same conditions as already existed; and that he or she had no other restriction and was in a labor market with a reasonable demand for part-time work.

“Part-time work” is defined as a situation where an individual is available to work for a number of hours per week that are comparable to the individual's part-time work experience in his or her base period.

Also, the disqualification provisions for claimants who leave work to accompany a spouse to a new job in a location that is impractical to commute has been eliminated. Now, a claimant who leaves work to accompany a spouse will be found to have good cause for leaving work. Note that UI benefits paid under this circumstance will not be charged to the employer's account.

Work Refusal/Suitability – The law now provides that an individual will not be found to have refused suitable work if the position offered is full time and the individual meets the part-time work requirements of the law.

Health/Disability Separations – As of January 1, 2010, a person needs only to provide sufficient evidence of a disability or other health condition for voluntary quits or discharges. Previously, the law required a person provide evidence showing that the condition prevented the individual from doing alternative work offered by the employer, in which the pay was either the greater of the minimum wage or 85% of the individual's regular salary.

Licensing/Certification Separations – New language states it is not necessary for an employer to show misconduct in order for a person to be disqualified from receiving UI benefits if the individual is discharged because he or she loses or fails to successfully apply for a license or certification necessary for performing his or her job.

Domestic Violence Separations – Language has been added to the “good cause leaving” provisions of the UI law and is applicable to the claimant, the claimant’s spouse, parents and children under the age of 18, whether it is a biological, step, half or in-law relationship.

Employment Definition – The term “employment” does not include service performed by a substitute teacher unless the individual is a full-time substitute, working at least 30 hours per week over six consecutive months. Performing extra duties for a school, such as coaching athletics or acting as a chorus director, is also excluded from employment.


Federal Unemployment Insurance Provisions Reauthorized

A number of unemployment insurance (UI) assistance measures originally implemented under the American Reinvestment and Recovery Act (ARRA) and set to expire at the end of 2009 have been extended for two months. Reauthorization provisions for the UI elements were included in The Department of Defense Appropriations Act (HR 3326), which was signed into law December 19, 2009. A summary of the UI provisions that will now continue until February 28, 2010 are as follows:

Emergency Unemployment Compensation Program (EUC) – Persons who exhaust their 26 weeks of regular unemployment benefits may establish or augment eligibility for up to four tiers of EUC. The reauthorization does not add any additional weeks of EUC; it simply extends the date a EUC claim can be established. The program continues to be 100% federally funded from Treasury general revenue. The following table illustrates available EUC benefits.

EUC Program

Available Weeks

Trigger

Tier I

Up to 20 weeks

All States

Tier II

Up to 14 weeks

All States

Tier III

Up to 13 weeks

*States with TUR > 6% or IUR > 4%

Tier IV

Up to 6 weeks

*States with TUR >8.5% or IUR > 6%

*TUR = Total Unemployment Rate; IUR = Insured Unemployment Rate

State Extended Benefits (EB) Full Federal Funding – Normally, the funding for state EB is shared, 50% by the states and 50% by the federal government, but was temporarily changed to 100% federal funding under ARRA. The recently enacted reauthorization pushes back the expiration of full federal funding from Treasury general revenue to the end of February 2010. Note: By law, government entities and Indian tribes are not covered under normal shared or temporary full funding of state EB, and will liable for any EB paid to their unemployed workers.

Federal Additional Compensation (FAC) – A $25 supplement will continue to be added to all weekly UI benefits paid, be they regular, EUC, or EB. The financing of FAC will continue to be 100% federally funded from Treasury general revenue.

It is expected that Congress will continue consideration of further UI extensions throughout 2010.


State Updates

Indiana
The law has been amended, effective January 1, 2010, regarding the issue known as “UI Integrity” which is insufficient separation information and benefit charging to an employer’s UI account. If an employer fails to respond to the UI agency’s request for additional information within the 10-day deadline, and the failure leads to a “benefits allowed” decision in the claim, but the employer later prevails at an unemployment hearing, the employer’s experience account will be charged 50% of benefits paid to the claimant prior to the claim decision being overturned upon appeal. An employer may only receive a credit if the claimant repays the benefits.

Maryland
Effective November 2, 2009, the unemployment insurance rules were amended regarding worker misclassification. The UI agency may consider the following in determining an employer knowingly failed to properly classify an employee: a prior violation of the Workplace Fraud Act or any other similar state or federal law involving worker classification issues; failure or refusal to produce requested records; evidence that persons performing substantially the same tasks are classified differently by the employer; and, any other credible evidence of an employer’s actual knowledge of deliberate ignorance of or reckless disregard for whether or not a worker is misclassified.

Oklahoma
For 2010, the maximum weekly unemployment benefit amount increases from $409 to $430. The minimum benefit amount of $16 remains unchanged.

Ohio
For new claims filed on or after December 27, 2009, the maximum weekly unemployment benefit amount increases as follows: from $372 to $375 (no dependents); from $452 to $456 (1 or 2 dependents); from $503 to $508 (3 or more dependents).


2009 – 2010 Wage Base Comparison

State

2009
Wage Base

2010
Wage Base*

State

2009
Wage Base

2010
Wage Base*

AK

32,700

34,100

(1)

NC

19,300

19,700

(1)

AL

8,000

8,000

(1)

ND

23,700

24,700

(1)

AR

10,000

12,000

(1)

NE

9,000

9,000

(1)

AZ

7,000

7,000

(1)

NH

8,000

10,000

(1)

CA

7,000

7,000

(1)

NJ

28,900

29,700

(1)

CO

10,000

10,000

(1)

NM

20,900

20,800

(1)

CT

15,000

15,000

(1)

NV

26,600

27,000

(1)

DC

9,000

9,000

(1)

NY

8,500

8,500

(3)

DE

10,500

10,500

(1)

OH

9,000

9,000

(1)

FL

7,000

8,500

(1)

OK

14,200

14,900

(1)

GA

8,500

8,500

(1)

OR

31,300

32,100

(1)

HI

13,000

38,800

(1)

PA

8,000

8,000

(1)

IA

23,700

24,500

(1)

PR

7,000

7,000

(1)

ID

33,200

33,300

(1)

RI

18,000

19,000

(1)

IL

12,300

12,520

(1)

SC

7,000

7,000

(3)

IN

7,000

9,500

(1)

SD

9,500

10,000

(1)

KS

8,000

8,000

(1)

TN

9,000

9,000

(1)

KY

8,000

8,000

(1)

TX

9,000

9,000

(1)

LA

7,000

7,700

(1)

UT

27,800

28,300

(1)

MA

14,000

14,000

(1)

VA

8,000

8,000

(1)

MD

8,500

8,500

(1)

VI

22,100

22,200

(1)

ME

12,000

12,000

(1)

VT

8,000

10,000

(1)

MI

9,000

9,000

(1)

WA

35,700

36,800

(1)

MN

26,000

27,000

(1)

WI

12,000

12,000

(1)

MO

12,500

13,000

(1)

WV

12,000

12,000

(1)

MS

7,000

7,000

(1)

WY

21,500

22,800

(1)

MT

25,100

26,000

(1)

FUTA

7,000

7,000

(1)

(1) Actual, assuming no law change
(2) Projected, assuming no law change
(3) Actual, assuming no law change; legislation is pending that could increase the wage base
* In these challenging economic conditions, a law change to increase the taxable wage base is possible in any state, even into 2010 and could even be made effective retroactively.

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THE U.I. FORUM® IS PUBLISHED BY ADP UNEMPLOYMENT GROUP, P.O. BOX 66744, ST. LOUIS, MO. 63166. ©ADP, INC. 2010. ALL RIGHTS RESERVED

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