10.30.12 |
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Changes to Unemployment Insurance Integrity Regulations

In an effort to reduce unemployment insurance (UI) overpayments to claimants (currently exceeding 10%), the President signed the Trade Adjustment Assistance Extension Act of 2011 (TAAEA) into law on October 21, 2011. Section 252(a) of the TAAEA adds a new subsection to the Federal Unemployment Tax Act (FUTA) prohibiting states from relieving employers of charges to their UI account when both of the following circumstances exist:

  • The 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 of 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 ensure their laws are in compliance with this new federal requirement; however, state may enact legislation sooner than this deadline. They are also permitted to impose stricter standards for employers, such as not requiring a prior pattern to exist to prohibit non-charging in these situations.

In many states today, employers providing separation information after the initial request, through an appeal or at a hearing, may see relief from UI charges accrued before the information being received. Some states have already enacted legislation preventing this and after the October deadline, that will no longer be possible in the remaining states. In order for your organization to more effectively control UI costs, it is important to provide complete and timely information when a request for separation information is received.

Learn more about unemployment compensation management solutions from ADP.


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