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Unemployment Insurance Integrity – Frequently Asked Questions

Q: What is Unemployment Insurance (UI) Integrity?

A: UI Integrity is a federal regulation that requires state unemployment agencies to prevent and detectimproper payment of unemployment benefits.

Q: How did UI Integrity begin?

A: The idea of UI Integrity began in President Clinton’s second term and formally signed into law on October 21, 2011, as a part of the Federal Trade Adjustment Assistance Extension of 2011. Each stateis required to enact its own version of UI Integrity by October 2013, using the federal legislation as a guideline.

 Q: How will my company be impacted?

 A: Impact may vary from state to state. Each state is free to enact its own version of UI Integrity legislation. What is true in all states is that an employer who does not provide sufficient or timely information in response to an unemployment claim can be charged for any unemployment benefits paid, even if the award of benefits is later reversed.

 Q: If undeserved benefits are paid back, does my company still have to pay?

 A: Federal law prohibits states from non-charging (crediting) employers when late or insufficient information is provided or no information at all. Federal law also provides the states with the ability to enact guidelines that are more stringent, which could mean additional penalties and fines.

 Q: What does it mean that my tax account will not be credited?

 A: Prior to the new regulations, when a decision awarding unemployment benefits to a claimant was reversed, any money paid to the claimant from the employer’s unemployment tax account was credited back to that account. Under UI Integrity, there is no requirement to credit your unemployment tax account. It is important to note that paying more money out of your unemployment tax account can negatively affect your tax rate for several years. Providing sufficient and relevant information with the claim response can help avoid this situation.

 Q: Is information needed even if we are not contesting the unemployment claim?

 A: Yes. UI Integrity requires employers to respond with separation information for each claim; responses of “no protest” in cases where employers do not wish to protest are not allowed under UI Integrity guidelines. Individual state regulations could require additional information. Claim responses may also require separation pay received by the claimant; including holiday, sick, vacation, bonus, pension and severance pay.

 Q: What is happening in my State?

 A: Several states already have their own UI Integrity regulations. Under the Federal law, every state must have its own UI Integrity regulation no later than October 2013.

 Q: What should my company do?

Be sure to supply all relevant information and documents to ADP when you are notified of any unemployment claim. ADP can assist you in determining what is needed for each claim. Information commonly needed includes any documents related to the separation; including letters as well as warnings and proof the employee knew your company policy. Separation pay information may also be required.

This communication is intended solely for the use of the individual to whom it is addressed and may contain information that is privileged, confidential or otherwise exempt from disclosure. The information provided in this communication is for informational purposes only and not for the purpose of providing legal, accounting, or tax advice. The information and services ADP provides should not be deemed a substitute for the advice of any such professional. Such information is by nature subject to revision and may not be the most current information available.


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