UIPL-2-12_Chg2_Acc.pdf

ETA Advisory File Text

RESCISSIONS None EXPIRATION DATE Continuing ADVISORY UNEMPLOYMENT INSURANCE PROGRAM LETTER NO. 02-12 Change 2 TO STATE WORKFORCE AGENCIES FROM PORTIA WU s Assistant Secretary SUBJECT Unemployment Compensation UC Program Integrity Provisions Amendments made by the Trade Adjustment Assistance Extension Act of 2011 TAAEA Combined Wage Claim CWC Program Questions and Answers 1. Purpose. To respond to questions from state workforce agencies and clarify states responsibilities related to the TAAEA amendments and their effect on the CWC program. 2. References. TAAEA Pub. L. 112-40 19 U.S.C. 2101 Section 303 of the Social Security Act SSA 42 U.S.C. 503 Sections 3303 and 3304 of the Federal Unemployment Tax Act FUTA 26 U.S.C. 3303 3304 20 CFR Part 616 Unemployment Insurance Program Letter UIPL No. 02-12 Unemployment Compensation UC Program Integrity Amendments made by the Trade Adjustment Assistance Extension Act of 2011 TAAEA UIPL No. 02-12 Change 1 Unemployment Compensation UC Program Integrity Amendments made by the Trade Adjustment Assistance Extension Act of 2011 TAAEA Questions and Answers and Training and Employment Notice No. 16-13 New Unemployment Insurance Interstate Connection UI-ICON Web Applications Related to UI Integrity. 3. Background. Section 3304 a 9 B FUTA requires states participating in the federal-state unemployment insurance UI program to participate in an interstate arrangement which the Secretary of Labor Secretary has approved in consultation with state UI agencies as reasonably calculated to assure prompt and full payment of benefits in cases where an unemployed worker has wages or employment in more than one state. U.S. Department of Labor Department regulations at 20 CFR part 616 implementing this FUTA provision established the interstate arrangement currently in place commonly known as the combined wage claim or CWC program. Under this program individuals in multi- state situations combine their employment and wages to establish a CWC benefit year under the law of a EMPLOYMENT AND TRAINING ADMINISTRATION ADVISORY SYSTEM U.S. DEPARTMENT OF LABOR Washington D.C. 20210 CLASSIFICATION Unemployment Compensation CORRESPONDENCE SYMBOL OUI DUIO DATE October 15 2014 2 single state in order to qualify for benefits or increase weekly or maximum benefit amounts. The paying state is the state in which the individual elects to file the CWC and where the employment and wages will be combined for purposes of establishing monetary eligibility under that state law. An individual must have employment and wages in the paying state s base period s in order to file a CWC in that state. A transferring state is a state s that transfers employment and wages to the paying state for use in establishing the CWC. TAAEA I mpact on the CWC Program Section 3303 a FUTA governs the conditions under which a state may reduce employers rates of contribution to the state s unemployment fund. As explained in UIPL No. 02-12 Unemployment Compensation Program Integrity Amendments made by the Trade Adjustment Assistance Extension Act of 2011 many states relieve an employer s unemployment account of charges that is the state will not charge the employer s account for experience rating purposes when the state has determined benefits were improperly paid. Section 252 a TAAEA added a new provision to section 3303 FUTA . The new subsection of FUTA f provides that for a state s law to meet the requirements of section 3303 a 1 FUTA a condition necessary for the Secretary to certify the state s law the state must not relieve an employer of charges i.e. must not allow non-charging of the employer s account when the employer or an agent of the employer 1 was at fault for failing to respond timely or adequately to a request from the state agency for information relating to a UC claim and an overpayment resulted and 2 the employer or its agent has established a pattern of failing to respond timely or adequately to requests from the state agency for information relating to UC claims. This new provision prohibits states from providing relief from charges to an employer s UI account when the actions of the employer or the agent of the employer have led to an improper payment s . See UIPL No. 02-12. The new provision does not require charging under these circumstances it only prohibits relief from charges if when an employer has the potential to be charged under the state UI law. Determinations about a claimant s eligibility for benefits may be separate from determinations about whether an employer s account is charged for those benefits. Thus the application of this provision depends on whether in that state a claimant is eligible or would have been eligible in the case of a transferring state had the claim been filed in the transferring state and whether the grounds for a determination of eligibility such as the reason for separation would normally result in a charge to an employer s account. This new provision does not apply if state law would not otherwise permit or require a charge to an employer s account for benefits paid to a claimant since in such case there are no charges from which an employer could be relieved. For example an employer would not be charged when a transferring state relieves of charges i.e. non- charges the employer s account if benefits would have been denied due to a monetary ineligibility had the claim been filed in the transferring state. 3 A CWC by definition always involves wages from two or more states and therefore from the perspective of the paying state will always involve both in-state and out-of-state employers. Therefore the processing and payment of CWCs require additional communication between states including communication about claimant eligibility and the grounds for charging or non-charging an employer s account. In cases where a paying state determines that a benefit overpayment resulted due to an out-of-state employer s failure to respond timely or adequately to the paying state s request for information the paying state must promptly communicate its determination to the appropriate transferring state . Each state has the responsibility to determine its own standard for what constitutes a pattern under these TAAEA provisions i.e. the employer has established a pattern of failing to respond timely or adequately to requests from a state agency for information relating to a CWC . Thus in cases where an overpayment is attributable to an employer covered by the law of the paying state the paying state determines whether the employer or its agent has established a pattern. On the other hand if the overpayment is attributable to an employer covered by the law of a transferring state the transferring state must act promptly and appropriately based on that transferring state s own definition or standard for a pattern. See questions and answers related to the respective responsibilities of the paying and transferring states in the attachment to this UIPL. 4. UI ICON CWC Application. The Department recognizes the need for states to have an efficient secure and expedient way of communicating with e ach other on these CWC issues. As a result a new web-based application called the CWC 02-12 was developed for states use on the UI Interstate Con nection ICON network. ICON is a secure telecommunications network through which states exchange UI claims -related data. The Department developed the UI-ICON CWC 02-12 application to ensure that a paying state is able to promptly communicate with a transferring state when the paying state determines an overpayment is the result of failure by an employer from the transferring state to respond timely and or adequately to the paying state s request for information on a CWC. 5. Action Requested. State Administrators are requested to provide this guidance to appropriate staff. 6. Inquiries. Please direct questions to the appropriate Regional Office. 7. Attachment. Integrity Provisions Amendments made by the Trade Adjustment Assistance Extension Act of 2011 TAAEA for Combined Wage Claims CWC Questions and Answers