TEN_5-20.pdf

ETA Advisory File Text

TRAINING AND EMPLOYMENT NOTICE NO. 5-20 DATE September 24 2020 EMPLOYMENT AND TRAINING ADMINISTRATION U.S. DEPARTMENT OF LABOR WASHINGTON D.C. 20210 TO STATE WORKFORCE AGENCIES FROM JOHN PALLASCH Assistance Secretary SUBJECT National Directory of New Hires NDNH State Directory of New Hires SDNH and Other Improper Payment Prevention and Detection Resources Tools and Services Available to States 1.Purpose. To remind states of resources tools and services available through the Unemployment Insurance UI Integrity Center and the U.S. Department of Labor s Department Employment and Training Administration ETA to support effective use of NDNH and SDNH and assist in preventing and detecting UI improper payments and announce the availability of a webcast on Recommended Operating Procedures ROPs for Cross-Matching Activities with National and State Directories of New Hires and state best practices in the use of the NDNH and the SDNH. 2.Action Requested. ETA requests State Administrators to provide the information in this notice to appropriate program staff and strongly encourages State Administrators to integrate the resources tools and services described in this guidance into the state UI operation. 3.Summary and Background. a.Summary This notice provides state UI agencies information regarding available resources to assist with the NDNH and the SDNH cross-matches as well as information on other integrity strategies to maximize state efforts to prevent improper UI benefit payments. b.Background UI program integrity is a top priority for the ETA. The recent enactment of the Coronavirus Aid Relief and Economic Security CARES Act of 2020 created several new temporary unemployment compensation UC programs that involved swift implementation the processing and management of an unprecedented volume of claims and a rise in UI fraud attempts that continue to test UI program integrity. States may mitigate increasing UI workloads and staff limitations by using resources tools and services which target improper payments and fraud to develop efficient prevention and detection practices. ETA strongly encourages states to utilize the resources tools and services described in this notice. As the economy reopens and an unprecedented number of individuals return to work the risk of improper payments due to Benefit Year Earnings BYE errors is high. BYE 2 errors result when individuals continue cla iming UI benefits and fail to appropriately report earning s after returning to work. For the 12 -month period ending June 30 2019 the Department reported an estimated national fraud impr oper payment rate of 3.23 percent or 845 million . BYE errors accounted for an estimated 58.5 percent or 494 million of these fraudulent payments. States must remain vigilant in focusing on BYE improper payments and make every effort to ensure the a gency is coordinating resources coll aborating with the UI Integrity Center and taking aggressive steps to prevent detect and recover these improper payments. NDNH and the SDNH cross -matches are the most effective strategies to address BYE errors. Both cross -matches are beneficial since they allow states to compare at different periods during the lifecycle of a UI claim in-state employment the SDNH and out -of- state employment the NDNH information to UC payments made to claimants . ETA strong ly encourages state use of SDNH and NDNH under Unemployment Insurance Program Letter UIPL No. 19 -11 National Effort to Reduce Improper Payments in the Unemployment Insurance UI Program . The advantages of using the NDNH and the SDNH are described in U IPL No. 13 -19 National Directory of New Hires NDNH and State Directory of New Hires SDNH Guidance and Best Practices and the attached Recommended Operating Procedures for Cross -Matching Activity National and State Directories of New Hires RO Ps . St ates are strongly encouraged to integrate the guidelines specified in UIPL No. 13 -19 and the ROPs to improve NDNH and SDNH New H ires utilization notably Missouri and Wisconsin optimized their New H ires operations through the adoption of the guidance in UIPL 13 -19 and the ROPs. Missouri established a criteria for sorting overpayment cases between high and low to prioritize cross -match hits when the cross -match identifies that there is a date of hire during the same period as UI benefit payments it resul ts in a hit and Wisconsin automated their processing of New Hires cross -match hits received . Both of these strategies are described in the ROPs section 4.5 Using Parameters for Workload Management. Additionally as discussed in the ROPs section 4.4 F requency and Timing of Cross -Matches Missouri increased their New Hire cross -match submissions and Wisconsin submits their SDNH cross -match each day and NDNH cross -match each week. States are reminded that implementation of these guidelines provide an ef ficient means to co mbat improper payments resulting from BYE errors. Furthermore UIPL No. 13 -19 and the R OPs outline guidance for states to integrate into their UI operations to improve cross -match outcomes by targeting employer claimant and the UI age ncy roles and the overall steps involved in the NDNH and SDNH process es from inception to completion . The UI Integrity Center is a state -driven source of innovative program integrity strategies to prevent and detect improper payments and reduce fraud inc luding several strategies included in the Department s Program Integrity Strategic Plan. It is an important resource to support states in their effective use of NDNH and SDNH. 4. Available Improper Payment Resources Tools and Services . Technical assista nce tools and resources are ava ilable through the UI Integrity Center at https integrity.naswa.org and 3 the UI Community of Practice on the Department s knowledge sharing site WorkforceGPS at https www.workforcegps.org login returnUrl https ui.workforcegps.org siteFor ui . Additionally states may contact the UI Integrity Center State Liaison for their region for additional assistance at https integrity.naswa.org contact -us . a. NDNH and SDNH Cross -matches. The UI Integrity Center created a webcast that discusses UIPL No. 13 -19 and the ROPs highl ight ing successful state practices including those achieved by Missouri and Wisconsin regarding the integration of the guidance in state UI operations. The webcast National Directory of New Hires NDNH Hits Webinar Successful Practices and Common Err ors is available through the UI Integrity Center at https library.naswa.org coll ui . States may contact their UI Integrity Center State Liaison to request any needed techn ical assistance about integrati ng the guidelines and methods specified in UIPL No. 13 -19 and the ROP s. Stat es may also contact their ETA Regional Office for information and assistance on these matters . In the guidance provided in UIPL No. 13 -19 and the ROPs ETA considers the role of the claimant and the employer in the prevention of BYE errors. As claimants return to work it is essential that claimant and employer legal obligations and requirements are communicated and reinforced by states . ETA recommends use of claimant and emplo yer messaging as a n effective strategy to provide claimants and employers with ongoing reminders of their responsibilities. The type of information communicated through claimant and employer messaging should include 1 reminding claimants of the ir respon sibilities to report income information when claiming UC and the consequences of committing fraud 2 reminding claimant s of the need to p rovide true and accurate infor mation 3 reminding claimant s of the general instructions on wage reporting 4 remind ing employer s of th eir legal obligations for reporting newly hired and rehired individuals new h ires to the ir SDNH 5 reminding employer s of instructions for accurate new hires reporting and highlighting any reporting deficiencies and 6 reminding emp loyer s of the general reporting instructions for new hires . Employer messaging should focus on promoting employer compliance and reporting and to ensure that the maximum amount of New Hires NDNH and the SDNH data is available for cross -match ing to id entify when a claimant has returned to work . The availability and accessibility of quality new hire data has proven to be a highly successful tool for state UI agencies in the early detection of UI benefit overpayments and can be used to substantially red uce average weeks paid and dollar amounts of overpayments. The effectiveness of New Hire s cross -matches however is only realized if employer compliance in reporting new hires is timely and accurate. Employers are required to submit New Hire s data to the SDNH by a deadline that each state designates. The Department of Health and Human Services Office of Child Support Enforcement HHS - OCSE is the Federal agency that manages the NDNH. Quarterly reports that are provided to states by HHS -OCSE contain i nformation about employers that may not have 4 reported new hires. HHS -OCSE may also notify states of employer reporting inaccuracies or the reporting of incomplete new hires information. States are strongly encouraged to review these reports and remind th ose employers that appear to be noncompliant of the requirement to report new hires. In notifying employers of this requirement states are encouraged to also include information on how to correctly report New Hires data and its value in preventing UI imp roper payments which helps keep UI employer taxes low. ETA strongly encourages states to adopt messaging as an improper payment prevention strategy and contact the UI Integrity Center State Liaison for their region for information and assistance. The UI Integrity Center has several resources on claimant and employer messaging including the UI Claimant and Employer Messaging Toolkit http www.itsc.org Pages UI -Messaging.aspx and examples of state integrity messaging strategies in the Integrity Center Knowledge Exchange Library State Practices Portfolio https library.naswa.org . Additionally state UI agencies are encouraged to collaborate with t he agency in their state responsible for the New Hires directories to promote greater employer compliance such as having laws or regulations in place to impose monetary or nonmonetary penalties on employers for failure to report new hires and ensuring enf orcement of those penalties. The ETA s data demonstrate that states that more actively promote and enforce employer compliance with New Hires reporting have more complete and accurate New Hires data and as a result have lower BYE overpayment rates. Seve ral states including Georgia South Dakota Georgia Texas and Utah are notably proactive in their efforts to further employer compliance. HHS -OCSE identified these states because they have teams dedicated to employer outreach and some impose penalties for employer non -compliance. The UI Integrity Center also developed resources to assist states with their NDNH and SDNH operations. The Blueprint Prevention Detection Crossmatches National Directory of New Hires and the Blueprint Prevention Detectio n Crossmatches State Directory of New Hires may contain useful information and are accessible from the UI Integrity Center s State Practices Portal https integrity.nas wa.org state -portfolio - database state -practices . In addition to using the SDNH and the NDNH the regulation at 20 CFR 603.23 b requires states to cross -match employers quarterly wage records with state agency UC payment information to detect individual s that have worked and received UC during the same period. To fulfill this requirement states should continue to use the quarterly wage cross -match to bolster their efforts to detect and prevent BYE errors. b. Additional UI Integrity Center Resources Tool s and Services The UI Integrity Center provides a wide array of other resources tools and services to improve program integrity. Some tools are contained in the Integrity Data Hub IDH . The IDH is a secure robust centralized multi -state data syst em that allows participating state UI agencies to submit claims for cross -matching distribute and receive fraud alerts and obtain data analytics on multi -state claims. The following IDH functionalit ies are currently available to participating states 5 Suspicious Actor Re pository S AR states match UI claims against other states known suspicious clai ms data. This tool allows each s tate to benefit from the investigative work of other participating states as claims data associated with known or probable UI fraud is submitted and stored in the SAR for cross - matching purposes. Suspicious E -Mail Domains participating states cross -match their claims against a database of suspicious E -mail domains that have been associated with fraudulent activity ex. Yopmai l . The IDH flags claims with these domains for further investigation by the submitting State. M ulti State Cross -M atch MSCM the IDH collect s and store s claims data submitted by states creating a multi -State database of UI claims data. Using this databa se the IDH is able to identify if UI claims data is being used across multiple states ex. flagging a Social Security Number that is being used across four different states . The MSCM also provides a lookback capability to identify after -the -fact matches based on new claims or fraud activity data submitted to the IDH. Fraud Alert System states share information through the secure IDH environment on emergent fraud schemes activity identified in their states. The system allows participating states to revie w information on emergent fraud schemes and to receive updates to improve awareness across the community. The IDH Fraud Alert System is available to all states independent of the state participating in other IDH functionalit ies . Identity Verification IDV states access datasets through the secure IDH environment to conduct identity verification and to prevent fraudulent improper payments early in the claims taking process. Other valuable UI Integrity Center resources include the following National Int egrity Academy NIA The NIA currently offers 120 eLearning lessons and online training modules for the four Academy certificate programs - UI Operations Integrity Certificate UI Tax Integrity Certificate UI Fraud Investigations and UI Program Leadersh ip. The catalogue of available courses is available at https www.naswa.org learning . Knowledge Exchange The Knowledge Exchange has become an increasingly valuable tool as it captures information on state practices and makes recommendations to states. Through the Knowledge Exchange the UI Integrity Center has been able to document specific practices create model operational blueprints and effortlessly share that information with all states. Nearly 2 00 0 resource documents are currently available on the knowledge exchange including 93 documented successful integrity practices that support the Model BPC Blueprint. States are strongly encouraged to engage with the UI Integrity Center and to utilize these useful and practical integrity resources. 6 5. Inquiries . Please direct inquiries to the appropriate ETA Regional Office. 6. References . Section 303 of the Social Security Act 42 U.S.C. 503 20 C.F.R. Section 603.23 b TEN No. 03 -20 Unemployment Insur ance UI Integrity Center s Integrity Data Hub IDH Fraud Alert System issued August 31 2020 https wdr.doleta.gov directives corr doc.cfm DOCN 5585 UIPL No. 23 -20 Program I ntegrity for the Unemployment Insurance UI Program and the UI Programs Authorized by the Coronavirus Aid Relief and Economic Security CARES Act of 2020 - Federal Pandemic Unemployment Compensation FPUC Pandemic Unemployment Assistance PUA and P andemic Emergency Unemployment Compensation PEUC Programs issued May 11 2020 https wdr.doleta.gov directives corr doc.cfm DOCN 4621 UIPL No. 13 -19 National Directory of New Hires NDNH and State Directory of New Hires SDNH Guidance and Best Practices issued June 7 2019 https wdr.doleta.gov directives corr doc.cfm docn 5373 and UIPL No. 19 -11 National Effort to Reduce Improper Payments in the Unemployment Insurance UI Program issued June 10 2011 https wdr.doleta.gov directives corr doc.cfm DOCN 3036 . 7. Attachment s . None