THE ACT

Are you aware of the Unemployment Insurance Integrity Act (The Act) signed into law by President Obama on Oct. 21, 2011 with an effective date of Oct. 21, 2013?  Most businesses are, but there are some for whom this law did not hit their radar.  The law is titled Trade Adjustment Assistance Extension Act of 2011, (TAAEA) and buried in The Act there are two phrases that all employers need to know: “timely and accurately” and “demonstrate a pattern of failing to respond”.

WHY THE ACT?

The questions these two phrases are trying to answer are:

• Is the state UI agency receiving information from the employer that qualifies an unemployment claimant as eligible?  So, The Act requires the employer to respond the UI agency “timely and accurately”.
•   If the state UI agency is experiencing this problem with an employer, is the employer also “demonstrating a pattern of failure to respond”?

Unemployment is a costly program, so it’s crucial to all concerned; the claimant, the employer and the UI agencies, that the claimants receiving unemployment meet the eligibility criteria of having been laid off or fired for just cause; or employees who have had their hours involuntarily reduced.  The UI agency must receive a response “timely and accurately” in order to determine the claimant’s eligibility.   The time frame to respond is clearly noted on the request for information form.  Most states have a 10 to 14-day window from mailing date of the request for employers to respond.

When an employer doesn’t respond, there are often varying reasons:  a) already paying the highest experience factor; b) a sense of ‘the employee always wins’ c) lack of knowledge of UI requirements and processes or a host of other reasons.  But, regardless of the reason, a continued lack of response to state UI requests will determine if the employer “demonstrates a pattern of failing to respond.

Noncompliance with The Act could become costly for the employer.  The Act does not define any penalties for noncompliance, the state will define what those penalties may be.  The state will also define “timely and accurately” and what “demonstrates a pattern of failing to respond” looks like.

HOW SHOULD YOU REACT?

Compliance with The Act is not as intimidating as it may sound.   A few simple steps could make all the difference.

• Does your employee and supervisor handbook have clearly defined policies and procedures regarding employee conduct and employer expectations?  Is it up to date?  If you’re not sure, now is a good time for a review!
• Do you have a dedicated person or department handling UI requests for information? Are they knowledgeable in applicable laws specific to the state?
• If you have a Third-Party Administrator (TPA), review the contract and be sure everyone understands their role in the UI process to ensure the smooth flow of needed information between employer and TPA to meet all required deadlines.

A good plan that is well communicated and understood, coupled with a solid training program is an employer’s best protection.