1 / 31

UI Integrity Has Arrived… Now What?

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

hunter
Download Presentation

UI Integrity Has Arrived… Now What?

An Image/Link below is provided (as is) to download presentation Download Policy: Content on the Website is provided to you AS IS for your information and personal use and may not be sold / licensed / shared on other websites without getting consent from its author. Content is provided to you AS IS for your information and personal use only. Download presentation by click this link. While downloading, if for some reason you are not able to download a presentation, the publisher may have deleted the file from their server. During download, if you can't get a presentation, the file might be deleted by the publisher.

E N D

Presentation Transcript

  1. UI Integrity Has Arrived…Now What? ETS Educational Webcast Thursday December 12th 2013 Join ETS

  2. meet your presenter • Ross E. Henderson • r.henderson@employmenttax.com • 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: info@employmenttax.com

  3. 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: info@employmenttax.com

  4. 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: info@employmenttax.com

  5. National UI Conditions Join ETS www.employmenttax.com Phone: +1(800) 518-3874 | email: info@employmenttax.com

  6. 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 Join ETS www.employmenttax.com Phone: +1(800) 518-3874 | email: info@employmenttax.com

  7. 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. Join ETS www.employmenttax.com Phone: +1(800) 518-3874 | email: info@employmenttax.com

  8. 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 www.employmenttax.com Phone: +1(800) 518-3874 | email: info@employmenttax.com

  9. Legislative Path to UI Integrity Join ETS www.employmenttax.com Phone: +1(800) 518-3874 | email: info@employmenttax.com

  10. 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 www.employmenttax.com Phone: +1(800) 518-3874 | email: info@employmenttax.com

  11. 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. Join ETS www.employmenttax.com Phone: +1(800) 518-3874 | email: info@employmenttax.com

  12. 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) ? ? ? Join ETS www.employmenttax.com Phone: +1(800) 518-3874 | email: info@employmenttax.com

  13. 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. Join ETS www.employmenttax.com Phone: +1(800) 518-3874 | email: info@employmenttax.com

  14. 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 www.employmenttax.com Phone: +1(800) 518-3874 | email: info@employmenttax.com

  15. 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. Join ETS www.employmenttax.com Phone: +1(800) 518-3874 | email: info@employmenttax.com

  16. 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. Join ETS www.employmenttax.com Phone: +1(800) 518-3874 | email: info@employmenttax.com

  17. 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). Join ETS www.employmenttax.com Phone: +1(800) 518-3874 | email: info@employmenttax.com

  18. Best Practices for UI Compliance & Cost Savings Join ETS www.employmenttax.com Phone: +1(800) 518-3874 | email: info@employmenttax.com

  19. BestPractices “ACT.” Provide information to UI agencies that is: Accurate Complete Timely Join ETS www.employmenttax.com Phone: +1(800) 518-3874 | email: info@employmenttax.com

  20. UI IntegrityOversight Plan Join ETS www.employmenttax.com Phone: +1(800) 518-3874 | email: info@employmenttax.com

  21. 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 www.employmenttax.com Phone: +1(800) 518-3874 | email: info@employmenttax.com

  22. 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 www.employmenttax.com Phone: +1(800) 518-3874 | email: info@employmenttax.com

  23. 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: info@employmenttax.com

  24. 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: info@employmenttax.com

  25. 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: info@employmenttax.com

  26. 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: info@employmenttax.com

  27. 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 www.employmenttax.com Phone: +1(800) 518-3874 | email: info@employmenttax.com

  28. UCM Plus Screenshot Join ETS www.employmenttax.com Phone: +1(800) 518-3874 | email: info@employmenttax.com

  29. UI Integrity Prep Checklist Join ETS www.employmenttax.com Phone: +1(800) 518-3874 | email: info@employmenttax.com

  30. 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: info@employmenttax.com

  31. CONTACT ETS Questions & Requests for Presentation Slides: : Ross Henderson-COO r.henderson@employmenttax.com thank you! (800) 518-3874 Connect with us on LinkedIn Q&A Join ETS www.employmenttax.com Phone: +1(800) 518-3874 | email: info@employmenttax.com

More Related