Changes in federal and state unemployment insurance legislation in 2013
State legislation included provisions to prohibit noncharging of benefits when erroneous payments are made to an individual on the basis of employer fault, assess penalties on fraudulent overpayments due to claimants, and deposit penalty recovery into the state’s Unemployment Trust Fund. In addition, legislation includes provisions on reporting of rehires to the Directory of New Hires.
Bipartisan Budget Act of 2013 (Pub. L. 113-67), enacted December 26, 2013
Mandatory use of Treasury Offset Program. This enactment amends the Social Security Act to require states to use the Internal Revenue Service Treasury Offset Program to recover a covered unemployment compensation debt that is uncollected a year after the debt was determined due.1
The following is a summary of some significant changes in state unemployment insurance laws that occurred during 2013.
Administration. The title “director of the Department of Industrial Relations” changed to “Commissioner of the Alabama Department of Labor.”
Financing. The September 30, 2013, ending date for the quarterly 0.06-percent special assessment used to fund the Employment Security Enhancement Fund is deleted.
The September 30, 2013, ending date for the current tax rate structure for determining an employer’s contribution rate is deleted.
The unemployment compensation account of any employer will be charged when a claimant is overpaid because the employer, or an agent of the employer, failed to respond timely or adequately to a request for information relating to an unemployment claim and when the employer or an agent of the employer has established a pattern of failing to respond timely or adequately to a request for information relating to an unemployment claim on two or more occasions, effective October 21, 2013.
Administration. The Commissioner of the Alaska Department of Labor and Workforce Development is authorized to allow the use of electronic filing methods of certain information in addition to other filing methods. Electronic filings authorized will be considered as equivalent to paper filing for complying with other requirements and for determining civil or criminal penalties for any violations.
Financing. The state legislature is permitted to appropriate money to the state Unemployment Compensation Fund.
An employer’s account may not be relieved of charges relating to an erroneous payment made from the Unemployment Trust Fund account if (1) the erroneous payment was made because the employer, or an agent of the employer, was at fault for failing to respond timely or adequately to a documented request for information relating to the claim for unemployment compensation and (2) the employer, or an agent of the employer, has established a pattern of failing to respond timely or adequately to requests for claim information. This requirement applies to overpaid benefits established after October 21, 2013.
The word “surcharge” follows the words “fund solvency adjustment” in the language relating to the rate of contributions for each employer.
An employer will pay a fund solvency adjustment surcharge if the reserve rate is less than 3.0 percent. The surcharge is a percentage equal to the difference between 3.0 percent and the reserve rate, rounded to the nearest one-hundredths of 1.0 percent. An employer will receive a fund solvency adjustment credit if the reserve rate is greater than 3.3 percent. The credit is a percentage equal to the difference between 3.3 percent and the reserve rate rounded to the nearest one-hundredths of 1.0 percent. The solvency surcharge may not be greater than 1.1 percent, and the solvency credit may not be greater than 0.4 percent. However, an employer’s fund solvency adjustment surcharge may not increase more than 0.3 percent from one year to the next. (Previous law provided that an employer will pay a fund solvency adjustment equal to the contribution rate set out in column B of the contribution rate table opposite the reserve rate of the fund set out in column A of the rate contribution. However, the fund solvency contribution rate of an employer may not increase or decrease more than three-tenths of 1 percent from one year to the next.)
1 For more information, see Bipartisan Budget Act of 2013, Pub. L. No. 113-67 (2013), http://www.gpo.gov/fdsys/pkg/PLAW-113publ67/html/PLAW-113publ67.htm.