What’s New? Unemployment Changes in Pennsylvania

PennsylvaniaThere are recent changes in Pennsylvania that may have a significant impact on employers.  The changes that employers should be aware of:

Benefit: Pennsylvania will be will be open to more phone hearings.

Downside: Employers will be held to very strict guidelines in regards to submitting documentation that may be used during a hearing as long as “one” party is participating by phone it is classified as a phone hearing.

As CCC has indicated previously, every state has passed legislation similar to Act 75, but they are enforcing/implementing it differently.  With the financial issues that Pennsylvania is experiencing, this legislation provides them a source of additional income

Downside: Increased number of hearings. As decisions are issued for the overpayment charges, additional hearings will need to be held regarding that issue.

Benefit: Employers are being given two “bites of the apple” with this as the law states employers have to provide the supporting documentation “before” a determination is actually issued. Which means either at the time of the initial claim or when the employer questionnaire comes out. This because they do not come out at the same time and a decision cannot be made unless employers were to miss the deadline on both.

CCC Strategy

Act 75

Employers need to be in compliance with the UI Integrity Law as CCC clients have been doing. It is important for employers to understand and we cannot stress it enough.  You cannot fight a claim, if you are unwilling to provide details at the initial claim level.  While there may be other issues stemming from a former employees separation such as an EEOC claim etc, the state unemployment agency does not find that as an appropriate reason for not providing information at the initial claim level.

Hearings

As for hearings, employers need to watch these very closely. If just one party is participating by phone it is classified as a phone hearing. This means that employers MUST submit ANY/ALL documentation that employers wish to use at the hearing 5 days PRIOR to the hearing. A party may choose to show up in person but that does not change the classification of the hearing.

Employers are going to see more phone hearings in PA more in the central and western parts of the state.

Please contact CCC for additional questions you may have regarding Pennsylvania’s changes or any other unemployment related matter.  info@corporatecostcontrol.com or (800)207-6926.


Unemployment Tax Update: Solvency?

During the Great recession, more than thirty states borrowed from the federal government in order to continue paying high unemployment benefits to claimants.    Today only California and Virgin Island remain on the FUTA credit reduction list.  However, the number of states on this short list does not indicate the solvency issue is resolved.

Ohio was the most recent state to repay their Title XII loan.   Through the passage of HB 390, legislation was passed to allow the unemployment division to borrow money from Ohio unclaimed funds thus decreasing employer FUTA taxes from $168 per employee to $42 per employee.   In order to repay the loan from the unclaimed funds, employers will be assessed a flat rate repayment surcharge of approximately $45 an employee for a total of $87 per employee (including the FUTA rate) which is half of what employers would have paid in FUTA taxes before the passage.

Conceptual 3d abstract illustration.

Ohio’s problems do not stop with the repayment of the loan and a surcharge to employers.   The trust fund is weak and outdated.   Ohio attempted to reduce the amount an individual collected in unemployment benefits by reducing the benefits received from 20 – 12 weeks.   After much debate, it was determined the action would still not result in Ohio being solvent.   As a result, the Unemployment Compensation Reform Joint Committee was formed to modernize the Ohio unemployment program.    They met for the first time in August of 2016 and will meet four additional times.   The following is a list of their focus to obtain solvency by 2025:

Ohio is not the only state to have a low taxable wage base and solvency issues.   The taxable wage base in California is $7000 and has not changed since the early 1980’s.   Over the past years, California has increased benefits to claimants and allowed more claimants to collect unemployment.  California still owes under the Title XII loan provision and employers will pay higher federal taxes again for 2016.  Thus, the trust fund for California remains insolvent with no resolution in sight.    The governor of California has stated that the Title XII loan will be repaid in 2017 though borrowing from other state funds.   California will still be insolvent even if the loan is repaid.  .    Arizona maintains a $7000 taxable wage base.    Texas is also claiming a solvency issue and has increased their 2017 unemployment tax rates.  The taxable wage base for Texas remains at $9000.

We can expect changes nationwide as the pressure to modernize unemployment systems increase.    Whether that is accomplished by increased employer/employee contributions will vary from state to state.

If you have any questions or concerns, please contact Norma Green, our Tax Director, at (800) 207- 6926, EXT. 418 or ngreen@corporatecostcontrol.com


Guideline: Sign up for Access to CCC UI University

CCC clients and fans can sign up now via our website for our upcoming trainings and access to CCC’s training videos, sample forms such as corrective action notices, etc and or educational bulletins and white papers.

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Having difficulty? Contact CCC at info@corporatecostcontrol.com or (800) 207-6926.

Contact CCC to see how we can save your organization time and money. Contact our Sales Team (800) 207-6926

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