This post was written by Emily Martin, Owner of Ally HR Partners LLC
Employers across NYS, and the entire country, are unsurprisingly seeing an increase in their unemployment tax rates after a year of unprecedented claims against states’ unemployment funds. Although some states are electing to exempt COVID-related unemployment claims from affecting employer’s rates, NYS is not opting in to this method. This means, every employer in NYS can expect to see an increase in their rate following the pandemic- and probably already have. Although an increase is in evitable, there are actions that employers can be taking now and moving forward to ensure that their own rate is kept to a minimum, and at a time when every penny counts for a business, we encourage you take these easy steps to keep your rate as low as possible.
How does unemployment work anyway?
Traditionally employees can receive unemployment for up to 26 weeks at a maximum rate of $504 per week after losing their job for “eligible” reasons. This includes involuntary terms that are not related to misconduct or other disqualifying factors. In the new reality that COVID has introduced, employees in some cases are now eligible to receive up to 70 weeks of unemployment, and at an increased rate, currently $804 per week with the Federal COVID money added in. That’s a long time to draw from your account.
When employers have employees that go on unemployment, this affects an employer’s “experience rating” which in large part determines what an employer’s unemployment costs will be in the future. The idea is that employers with the lowest risk of unemployment should not be paying as much as those with higher risk and rates of unemployment, all based on a history of claims. For this reason, employers have an obvious incentive to reduce the number of claims paid out against their account. Simple concept right? But many employers simply do not take these steps, assuming there is nothing they can do to combat a claim (against a very employee-sympathetic system), or just not wanting to bother with the administrative nauseum that comes with these tasks. With the number of claims being made right now, and also the expanded opportunity for these to be charged longer-term against your account, we think it’s time for a shift in thinking on this front. It’s time for employers to take back some power and hold this system accountable, and the employees within it. It’s just the right thing to do for all involved.
So what can you do?
- Respond to and Dispute Claims
Whenever an employee makes a claim for unemployment associated with your Company, you will always receive a notice from NYS indicating that a claim has been made, along with an opportunity to dispute the employee’s eligibility for the funds, as well as to verify wages to make sure the employee is only receiving what they are eligible for. Make sure you are receiving these notices, know where they are going, and that someone is responsible for opening and responding to these within the required time frame (10 days). So many employers don’t even bother with this very easy first step, and it opens the door to countless ineligible claims, as well as unsubstantiated funds to be paid out. Most of this communication is done via mail, but you can also sign up for the state’s online portal to handle some of this (SIDES), or call the Telephone Claim Center at (888) 890-5090.
- Review your Monthly Charges
In addition to notices when a claim is filed, you also should be receiving a monthly statement of charges against your account. It would be wise to review these statements each month, especially now, to ensure that there not illegitimate charges being made. Unemployment fraud is happening at an unprecedented rate, and auditing these bills could help catch these earlier than other means to avoid further charges (look for employees receiving that are still working for you). Audits of these can also help you catch any issues with rates for employees, or other errors.
If you catch issues on your bills, you should immediately notify the unemployment office. If an employee is listed who shouldn’t be receiving unemployment (likely fraud case), you should also notify the employee so they can take the necessary actions to rectify with NYS as well as credit bureaus and banks in cases where identity fraud may be taking place. Note that you must report any issues with these bills in the states required time frame in order for charges to potentially be credited back to your account.
For more information for employers and employees when unemployment fraud is occurring, check out NYS’ resources: https://dol.ny.gov/report-fraud. Fraud can also be reported to the fraud hotline at at (866) 435-1499.
- Report employee (and even applicant) activity
Unemployment is intended for those who want to and can work, but have not been able to find work. This means that anyone refusing work should not be receiving unemployment. If you have former employees who are receiving unemployment whom have refused offers to return to work, including returning full time if they’ve gone part time (and are receiving partial unemployment as a result), these employees are collecting unemployment when they should not be. Refusing any offers for work should immediately disqualify individuals from receiving unemployment benefits- but this cannot happen without you reporting this information to NYS. If you have employees or even job applicants where this is occurring, you can contact NYS to report the issue, and hopefully stop yourself from incurring increased unemployment costs related to these individuals.
- Submit your quarterly returns and payments on time.
Missing or late returns or payments can affect your Unemployment Insurance costs in several ways including penalty charges, interest charges, and reducing your eligibility for the FUTA tax credit (generally, employers may receive a credit of 5.4% against the standard 6% federal tax associated with unemployment).
- Reply promptly to requests for employment and wage data.
Complete and return requests for information (mentioned above) within 10 days, but ASAP of the mailing date on the form. This information is used to determine eligibility for unemployment for former employees, and to ensure correct experience rating charges. If you do not respond timely or accurately, your account may not be relieved of improper charges later if benefits are paid out before corrected.
Who can I contact?
If you believe that an employee was working while collecting Unemployment Insurance, or has otherwise fraudulently collected benefits, write to: NYS Department of Labor Liability and Determination Section or Call: (866) 435-1499 Fraud Control Unit 24-hour toll-free hotline State Office Campus Albany, NY 12240-0322
If you believe that benefits were improperly charged (for example, a claimant never worked for you), write to: NYS Department of Labor Liability and Determination Section or Call: (518) 457-2635 State Office Campus Albany, NY 12240-0322.
Like we’ve learned in so many ways this year, personal vigilance and effort are imperative to ensure you’re maximizing the benefits and minimizing the hits to your business. This now also includes managing your unemployment claims. For more tips on actions you can take for your business in this way, check out our other resources, including this article on other lessons learned from the pandemic.
Have a question about this information, a tough situation you’re unsure how to handle, or just looking for some reassurance? We can help! Ally HR Partners helps HR people, business owners, and other people leaders who are overwhelmed or unsure tackle their problems, and strategically plan to prevent them in the future! Reach us at Emartin@AllyHRPartners.com.
This post was written by Emily Martin, Owner of Ally HR Partners LLC, a Buffalo-based HR consulting firm that helps small businesses identify and implement custom solutions to their people problems and opportunities. Often a business’ #1 expense, Ally HR Partners believes your people should be your #1 asset. Through an integrative partnership approach, Ally becomes your internal expert on all things HR including compliance assurance, performance management, and strategic HR initiatives designed to make the most out of your Human Capital. For more information about how Ally can work for you, visit AllyHRPartners.com.