5 Tips for Handling Unemployment Insurance Claims

Although the Unemployment Insurance Integrity Act may seem like old news, many employers are still struggling to deal with the changes it brought to the unemployment insurance claims management process. Signed into law by President Obama in 2011 as part of the Trade Adjustment Assistance Extension Act (TAAEA), the UI Integrity Act was designed to curb the overpayment of benefits to claimants and address the issue of employer indifference to the UI program. The Act required each state to pass legislation by the end of 2013 that puts an obligation on employers to respond “timely and accurately” to requests for information from UI agencies and penalizes employers who demonstrate a pattern of failing to respond to these requests.

Employers aren’t the UI program’s main problem, though. According the US Department of Labor’s statistics about improper UI payments, claimants are solely responsible for the vast majority of unemployment insurance overpayments in each state. So, although the UI Integrity Act’s main purpose (reducing the amount of unemployment benefits paid to ineligible claimants) may seem noble, it isn’t addressing the root cause of the overpayments. What it is doing, however, is putting an added burden on employers.

Under the new regulations, if an initial ruling that awards benefits to a claimant is reversed upon appeal but the hearing officer finds that the employer failed to respond accurately or timely to the initial request, the claimant will not have to repay the benefits that have already been allocated from the employer’s SUTA account. What this means is that employers in this situation will have no way to recoup the money spent on the benefits that have already been paid out, even if they win the appeal.

All 50 states have since passed the required legislation, each with varying definitions of what it means to respond in an “accurate and timely” fashion. This variance in application from state to state can make it difficult for businesses with employees in multiple states to manage unemployment claims and appeals, particularly those without a UI expert on staff. Even employers who only have employees in one state are struggling to understand and comply with the changes in unemployment insurance claims administration.

Jeffrey Martin, G&A Partners’ resident UI expert, has compiled a list of tips and suggestions for employers who are facing a UI claim:

• If it isn’t written down, it didn’t happen.
  This is an old adage of the business world, but it is especially true for UI claims. The best course for employers is to document everything, especially when it comes to employee discipline. Although employers may balk at the idea of so much paperwork, documentation is the best defense against an unwarranted unemployment insurance claims.
• Stick to the facts.
  When responding to unemployment claims, provide the exact amount of information requested by the hearing officers – no more, no less. Employers should focus instead on providing information that establishes the direct-and-proximate cause of the separation.
• Collect witness statements.
  It is becoming more and more common for hearing officers to request statements from witnesses who were present during an incident that lead to the separation. Although employers may not want to put the employee’s coworkers in the awkward position of testifying against a colleague, not providing witness statements can impact the outcome of a UI appeal later on.
• Think logically, not emotionally.
  This is especially tough for businesses experiencing layoffs. In several instances, the person seeking UI benefits was a longtime and beloved employee. In these cases it becomes very difficult to separate personal emotions from business interests. Employers suffering from this crisis of conscience need to remember that the unemployment insurance program is a pool fund, one that all employers contribute to. Employers who decide not to protest unemployment claims because they feel bad for a former employee don’t understand that they are, in fact, undermining the integrity of the entire UI program.
• Give employees an opportunity to offer comments on write-ups.
  This is a bit of an insider tip. Even though providing a place on the write-up or other disciplinary forms for the employee to comment and/or defend themselves may seem counterintuitive, the truth is that most employees won’t take advantage of it. Employers can then use this lack of response as evidence of an employee’s acknowledgment of the accuracy of the incident report and acquiescence to any disciplinary measures.

The most important thing that employers need to understand about the changes to the claims process brought by the UI Integrity Act is that they no longer have the option to just opt out of the process. Employers who are still doing nothing or not responding to requests for information from state agencies or hearing officials will quickly find that the cost of noncompliance can be quite expensive. Even employers that are actively involved in the UI claims process will soon be faced with having to weigh the costs of appealing a decision and being much more selective about the appeals they do file.

The best thing an employer can do is adopt a proactive approach to unemployment insurance claims management, one that impacts every aspect of the employee lifecycle from hire to retire. That may mean adopting more quality HR policies and procedures, and even bringing in outside counsel.

As one of the nation’s leading professional employer organizations (PEO), G&A Partners has been helping entrepreneurs grow their businesses, take better care of their employees and enjoy a higher quality of life for over 20 years. By providing proven solutions and technology in the areas of HR compliance, employee benefits, payroll administration and workplace safety, G&A alleviates the burden of tedious administrative tasks and allows business owners to focus their time, talent and energy on growing their company.

To find out how partnering with G&A can help your business grow, call 1-800-253-8562 to schedule a free business consultation.