Unemployment Insurance Integrity Act: What employers need to know

It’s called the Unemployment Insurance Integrity Act, and it’s changing the way employers deal with a fired or laid-off employee’s request for unemployment compensation.

Historically, employers have sometimes ignored requests from unemployment agencies to provide information about a former employee’s departure.

Under the new law, that won’t be allowed.

Enforcement of the law is just now beginning, although the legislation was signed by President Obama as part of the Trade Adjustment Assistance Extension Act of 2011. Its purpose was to strengthen the “integrity” of the unemployment compensation system by ensuring that individuals who shouldn’t qualify for UC don’t receive it simply because their former employers agreed not to contest their benefits claims.

The law’s provisions require states to punish employers that show a “pattern” of not responding “adequately” or in a “timely” fashion to UC agency information requests regarding unemployment claims.

Some of the punishments states have implemented for not complying with the new notice request rules include:

  • Steep civil penalties
  • Criminal penalties
  • Charging employers’ unemployment insurance accounts for benefits paid out to claimants who are eventually disqualified for benefits, and
  • Hurting employers’ experience ratings, which results in unemployment insurance tax rate increases.

So what should you do now?  Employment law attorneys say employers should:

  • Appoint a group of individuals who will be responsible for completing UC claim and info forms
  • Train applicable staffers to identify UC forms and direct them to the appropriate personnel for completion
  • Appoint an individual to document the info communicated to a departing employee
  • Consult with your company lawyers about agreements not to contest UC eligibility, since these agreements may face increased scrutiny, and
  • Make sure any third-party administrators you use to complete UC forms are aware of your state’s new laws in this area and are able to meet all the requirements.

About the Author

Lon Matejczyk

Lon is the former publisher of the Colorado Springs Business Journal and Colorado Springs Military Newspaper Group.He has served in leadership roles at various newspapers in Iowa, Florida and Wisconsin. Lon received his Bachelor of Arts in Communications from the University of Wisconsin, Eau Claire and attended the Kellogg Graduate School of Management at Northwestern University. Earlier in his career, Lon spent several years as a sea captain and held a 100-ton Coast Guard license. Lon is a former rugby player, referee and administrator and now coaches under 13 year old kids. Lon has served on the boards of numerous community and business organizations including Colorado Springs Leadership Institute, Peak Venture Group, CS Quality of Life Indicators Business Index Committee, Junior Achievement and is a member of The Colorado Thirty Group.  Lon was given the “Making the Pikes Peak region a better place to live work and play” award by the CS Chamber of Commerce, was the VFW Post 1’s business citizen of the year.

Show Buttons
Hide Buttons