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UI Integrity Has Arrived… Now What?. ETS Educational Webcast Thursday December 12 th 2013. Join ETS. meet your presenter. Ross E. Henderson [email protected] COO, Employment Technology Solutions (“ETS”) President, Association of Unemployment Tax Organizations (“AUTO”)

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Ui integrity has arrived now what

UI Integrity Has Arrived…Now What?

ETS Educational Webcast

Thursday December 12th 2013

Join ETS


Meet your presenter

meet your presenter

  • Ross E. Henderson

  • [email protected]

  • COO, Employment Technology Solutions (“ETS”)

  • President, Association of Unemployment Tax Organizations (“AUTO”)

  • Payroll / HRIS Advisory Board Member, HR.com

Join ETS

www.employmenttax.com

Phone: +1(800) 518-3874 | email: [email protected]


Ets solutions

ETS SOLUTIONS

Technology-based Solutions Driving Compliance, Convenience & Savings for Employers

  • HR Tools

  • Verification

  • Unemployment Claims

  • Tax Consulting

  • On-boarding Services

  • Online Job Portal

  • Applicant Tracking Systems

  • Background Checks

  • Assessment Tools

  • Electronic I-9 and E-Verify Integration

  • Verification of Income and Employment (VOIE)

  • OIG Exclusion Processing

  • UI Claims Administration

  • Hearing Attendance

  • Bonded Service

  • Training Tools

  • Benefit Charge Audits

  • M&A Consulting & Credits

  • Tax Advisory

  • Hiring Credits & Incentives

  • Statutory Account Review

  • Protective Filings

NEW!

Join ETS

www.employmenttax.com

Phone: +1(800) 518-3874 | email: [email protected]


Presentation agenda

Presentation Agenda

  • UI Overview & National Trends

  • Legislative Path to UI Integrity

  • Key Definitions

  • Best Practices for UCM: “A-C-T”

  • GOALS:Compliance, Efficiency & Cost Savings!

Join ETS

www.employmenttax.com

Phone: +1(800) 518-3874 | email: [email protected]


Ui integrity has arrived now what

National UI Conditions

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Phone: +1(800) 518-3874 | email: [email protected]


Condition of ui national focus

Condition of UI: National Focus

Many States’ UI Reserves Still Insolvent

State Trust Fund Solvency as of Oct. 31, 2013. Map taken from November 2013 SUCAP Report, based on US DOL UI data quarterly summary charts & SUCAP Reports.

Red = borrowing as of 10/31/13. Yellow= less than 6 mos. of positive balances. Green = more than 6 mos. of benefits. Orange= ER-financed bond

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Phone: +1(800) 518-3874 | email: [email protected]


Key conditions of the ui system

Key Conditions of the UI System

Unemployment rate: 7% (November 2013)

National average annual UI expense over $500 per EE

National average cost per UI claim: roughly $7,703 (DOL).

Assessments to UI rates

  • States using ER-financed bonds: CO, ID, IL, MI, NV, PA, TX

    FUTA Credit Reduction for 13 states See states.

    UI named a “high-error” & “high priority” program for governmental corrective action.

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Phone: +1(800) 518-3874 | email: [email protected]


Immediate impetus inefficiency systemic abuse

Immediate Impetus:Inefficiency & Systemic Abuse

  • In 2011, the DOL estimated $14B, or 11% of all UI claim payouts, result from overpayments.

  • States like AZ, CO, IN, LA, VA pegged with 19-43% improper payment rates.

  • DOL estimates 19% of UI benefit overpayments stem from ERs' untimely response and/or inaccurate info.

Join ETS

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Phone: +1(800) 518-3874 | email: [email protected]


Ui integrity has arrived now what

Legislative Path to

UI Integrity

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Phone: +1(800) 518-3874 | email: [email protected]


2011 federal taaea law ui integrity section 252 overview

2011 Federal “TAAEA” Law:UI Integrity / “Section 252” Overview

  • Follow-on to 2009 Executive Order 13520 to reduce improper UI payments.

  • Increased employer responsibility for claims process & reporting.

  • Unemployment Claims Administration now focused on complete and compliant reporting.

  • All states were required to enact UI Integrity legislation by 10/21/13.

Join ETS

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Phone: +1(800) 518-3874 | email: [email protected]


Ui integrity sec 252 of taaea

UI Integrity:Sec. 252 of TAAEA

Federal Trade Adjustment Assistance Extension Act of 2011 :

States must not relieve employers (ERs) of benefit charges to their unemployment tax account when both conditions exist:

UI benefits were improperly paid due (in part or in whole) to ER’s failure to respond timely or adequately to the agency’s request for claim detail.

ER has established a pattern of failure to respond timely or adequately to agency requests for claims info.

*TAAEA mandates a minimum standard; states may go further.

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Phone: +1(800) 518-3874 | email: [email protected]


What is prohibit relief of benefit charges

What Is Prohibit Relief of Benefit Charges?

  • Employers’ unemployment accounts will be charged for unemployment claims overpayments where applicable.

  • Relief on appeal is not available in all states, depending on legislation (charging may continue).

  • Increase in benefit charges may influence ER experience rating and elevate UI taxes.

No charge relief…………………………………………Charges stop on appeal (where available)

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Phone: +1(800) 518-3874 | email: [email protected]


Financial impact example

Financial Impact Example

  • Case Study:

  • ER With 100 Separations/Yr; Classified with “Pattern of Failure.”

  • Benefit$ paid to claimant prior to successful Appeal by ER.

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Phone: +1(800) 518-3874 | email: [email protected]


What is failure to respond timely

What Is Failure to Respond Timely?

  • Timely is often specifically defined in state’s UI Integrity legislation, or elsewhere by the state workforce agency.

  • It’s also frequently not defined.

  • Where not defined, it’s often interpreted as ballpark 7-10 days from agency communication.

  • If you cannot document your response within that time frame, it may be counted against you as failure to respond timely.

Join ETS

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Phone: +1(800) 518-3874 | email: [email protected]


What is adequate response

What Is Adequate Response?

  • More subjective term.

  • In some cases, is specifically outlined in state’s UI Integrity language or elsewhere.

  • In many cases, not defined.

  • ERs should pay attention to precedent and agency practices where there is no existing guidance.

  • All questions should have responses.

  • Responses should be accurate and complete with supporting material where appropriate.

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Phone: +1(800) 518-3874 | email: [email protected]


What is pattern of failure

What Is Pattern of Failure?

  • Some states have left this undefined in their UI Integrity legislation; many will develop definitions going forward.

  • Roughly half the states have defined as:

    • “the greater of 2 instances or 2% of claims in the past year.”

  • Some states have more restrictive and difficult-to-meet standards.

    • Example: Some do not take into account larger number of claims for larger ERs.

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Phone: +1(800) 518-3874 | email: [email protected]


Additional penalties

Additional Penalties

  • Some states have assigned additional penalties above and beyond that required by TAAEA.

  • Additional penalties may include:

    • Loss of appeal rights

    • Fines per instance

    • Fines based on false statements

    • Fines as % of assessed overpayments

    • Revocation of right to agent representation

  • Problems may also lead to higher risk of exposure to other audit areas (worker classification, other agencies and jurisdictions).

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Phone: +1(800) 518-3874 | email: [email protected]


Ui integrity has arrived now what

Best Practices

for

UI Compliance & Cost Savings

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Phone: +1(800) 518-3874 | email: [email protected]


Ui integrity has arrived now what

BestPractices

“ACT.”

Provide information to UI agencies that is:

Accurate

Complete

Timely

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Phone: +1(800) 518-3874 | email: [email protected]


Ui integrity oversight plan

UI IntegrityOversight Plan

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Phone: +1(800) 518-3874 | email: [email protected]


Controllable risk factors contributing to ui cost noncompliance

Controllable Risk FactorsContributing to UI Cost & Noncompliance

  • Challenge #1: Organizational Structure:

  • Limited infrastructure committed to UI process

  • Minimal or non-existent “inter-departmental” technology for seamless, timely receipt &

  • “effective” follow-through for every claim

  • Inconsistent expertise responsible for program success (turnover) = inconsistent program delivery

Join ETS

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Phone: +1(800) 518-3874 | email: [email protected]


Ets solution

ETS’ Solution

  • Empower your team with the tools they need to be effective, and save money in the long run. Deploy technology-based claims management for automated cross-location, cross-department communication and transparent, on-demand account access.

Join ETS

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Phone: +1(800) 518-3874 | email: [email protected]


Controllable risk factors contributing to ui cost noncompliance1

Controllable Risk FactorsContributing to UI Cost & Noncompliance

  • Challenge #2: Training for Results

  • Invested parties (C-level, HR, Payroll, ….) may not be educated about relationship btwn. separation, discipline, documentation, claims process, and cost / compliance impact to organization.

  • Charge analysts may not be well-trained on all of the following:

    • Match benefit year wages vs. charges

  • Scrutinize reports for charge irregularity

  • Audit charge statement to ensure accuracy

  • Create effective contact process with agency

  • Follow-through on reversing inaccurate charges

  • Join ETS

    www.employmenttax.com

    Phone: +1(800) 518-3874 | email: [email protected]


    Ets solution1

    ETS’ Solution

    • Implement training modules for all on-boarding and exit staff (HR and managers).

    • Clarify UCM risks and potential value in a language C-Suite understands. Use advanced reporting features to assign dollar values to:

      • where you are at / current win-lose ratio, experience rating

      • where you want to be / industry benchmarks

      • worst case scenario / noncompliance penalties

    • Secure support for additional resources

    • as needed.

    Join ETS

    www.employmenttax.com

    Phone: +1(800) 518-3874 | email: [email protected]


    Controllable risk factors contributing to ui cost noncompliance2

    Controllable Risk FactorsContributing to UI Cost & Noncompliance

    • Challenge #3: Breaking Old Response Habits

    • In the past, many employers cherry-picked claims to respond to, focusing on those that held perceived benefit to the employer (such as unwarranted claims).

    • In the past, agency requests for claims detail could be largely put off and “perfected” after the initial claims determination if necessary.

    Join ETS

    www.employmenttax.com

    Phone: +1(800) 518-3874 | email: [email protected]


    Ets solution2

    ETS’ Solution

    • Technology-based claims management supports timely response of all claims, right from the start.

    • “Follow-through” procedures support ongoing agency compliance.

    • Built-in “triggers” identify areas for improvement.

    • Access records, notes, and claims detail on-demand from anywhere, anytime.

    • Transmit data electronically.

    Join ETS

    www.employmenttax.com

    Phone: +1(800) 518-3874 | email: [email protected]


    Reporting features how they help

    Reporting Features: How They Help

    • Track results/determine program compliance & process improvement initiatives

    • Manage/scrutinize high cost contributors

    • Identify strong program performers

    • Charge impact driver by separation mix and charge amounts

    • Electronic benefit charge audit system (cross-check all charges)

    • Ensure charge accuracy against agency tables/formulas

    • Tools for aggregate review & analysis of “real time” reports

    • Result: Constantly Improving Your Compliance & Cost-Savings

    Join ETS

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    Phone: +1(800) 518-3874 | email: [email protected]


    Ucm plus screenshot

    UCM Plus Screenshot

    Join ETS

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    Phone: +1(800) 518-3874 | email: [email protected]


    Ui integrity prep checklist

    UI Integrity Prep Checklist

    Join ETS

    www.employmenttax.com

    Phone: +1(800) 518-3874 | email: [email protected]


    Ets resources

    ETS Resources

    • ETS’UI Tips

    UI Integrity State Legislation Tracker

    UI Integrity Compliance Tips

    How Nonprofit Employers Can Reduce UI Cost

    Tips on Choosing a UCM Vendor

    • Go here to download three pages of UI Tips from ETS.

    • Is Your UCM Broken?

    • Learn more about ETS’ UCM Plus Solution

    ETS

    Blog

    • Download this one page checklist to assess the state of your UI Claims Administration

    Go here to get ETS’ best UCM blog posts and resources in one place.

    Go here to learn more, and here to contact ETS.

    Join ETS

    www.employmenttax.com

    Phone: +1(800) 518-3874 | email: [email protected]


    Contact ets

    CONTACT ETS

    Questions & Requests for Presentation Slides:

    :

    Ross Henderson-COO

    [email protected]

    thank you!

    (800) 518-3874

    Connect with us on LinkedIn

    Q&A

    Join ETS

    www.employmenttax.com

    Phone: +1(800) 518-3874 | email: [email protected]


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