Recent developments in state and federal unemployment insurance laws may impact procedures employers have in place for responding to requests for information regarding a former employee's claim for unemployment benefits. In 2011, President Barack Obama signed the Unemployment Insurance Integrity Act as part of the Trade Adjustment Assistance Extension Act of 2011 (“TAAEA”). Section 252 of the TAAEA is applicable to employers in all 50 states and the District of Columbia, and prohibits states from relieving an employer of charges to its unemployment tax account when: (1) the employer or the employer’s agent was at fault for failing timely or adequately to respond to a request for information relating to a claim for unemployment benefits; and (2) where the employer or agent has established a pattern of failing to respond timely or adequately to such requests. A number of states already required employers to respond to information requests within a specific timeframe, but did not penalize employers who failed to respond or who provided minimal information. This often resulted in individuals receiving unemployment benefits who were not actually eligible to receive them.
The law became effective October 21, 2011, and required states to incorporate the provisions of TAAEA Section 252 into their unemployment insurance laws by October 21, 2013. All states have enacted the TAAEA Section 252 mandate at this time. A number of states have passed legislation simply mirroring the federal mandate, while a few others have passed laws that are more severe. The following are changes that have taken effect in every state and territory where Stinson Leonard Street currently has offices:
Arizona: Arizona law already required employers to respond to requests from the Industrial Commission regarding a former employee’s claim for unemployment benefits within ten days after the date of notification or mailing of a notice that the employee had filed a claim for benefits. What is new is codification of the TAAEA mandate; the Industrial Commission will not relieve an employer’s account of charges relating to an erroneous benefit payment if the Commission determines: (1) that the erroneous payment was made because the employer or an agent of the employer failed timely or adequately to respond to a written request from the Commission for information relating to a claim for unemployment compensation; and (2) that the employer or the employer’s agent has established a pattern of failing to timely or adequately respond to requests.
For purposes of the Arizona law, “pattern of failing” means the repeated, documented failure of an employer or employer’s agent to make timely and adequate responses with consideration of the number of instances of failure in relation to the total number of requests. A “pattern of failing” will be determined by reviewing the most immediate prior twelve-month period, and a pattern will be established if the employer or agent has five or more failures, or failures in more than five percent of the number of requests – whichever is greater.
Colorado: Colorado law currently requires an employer to respond to a request from the Division of Unemployment Insurance within twelve calendar days after the date on which the Division requests the information. The law specifies that the information must be received within twelve calendar days.
The Colorado General Assembly enacted language mirroring TAAEA Section 252, but also provided that the Division of Unemployment Insurance will be responsible for promulgating rules to specify what factors constitute a pattern of failing timely or adequately to respond to requests for information. The Division took a tougher stance than that required by TAAEA: if an employer fails timely or adequately to respond to requests from the Division, the employer will be barred from protesting the payment of benefits to workers whose information was not furnished as required, or protesting the charging of the employer’s account for experience-rating purposes. The Division, therefore, did not define a “pattern of failing.”
Illinois: Illinois law currently requires that an employer protest a claimant’s eligibility to receive unemployment benefits, or the employer’s status as a chargeable employer, within ten days. Illinois also revised its unemployment insurance laws to mirror the TAAEA Section 252 mandate, but the Illinois legislation does not define “pattern of failing” or what it means to “adequately respond.”
Kansas: Kansas, like Colorado, takes a tougher stance than that provided by TAAEA Section 252. Under Kansas law, an employer must respond to a request for information from the Unemployment Insurance Office of the Department of Labor within ten days of the mailing date. If the information is not submitted or postmarked within the ten-day period, the employer will be deemed to have waived its standing as a party to the proceedings and will be barred from protesting any subsequent decisions about the claim. The employer’s response time limit may be waived or extended, however, if a timely response was impossible due to excusable neglect. The Kansas legislation does not include language referencing a pattern of timely or adequately responding to requests for information.
Minnesota: Minnesota has adopted legislation that tracks the language used in TAAEA Section 252, and defines a “pattern” as a prior failure to respond to the greater of two requests for information, or two percent of all requests for information in the most recent six months. An employer must respond to a request for information within ten calendar days of notification, and if an employer wishes to raise the issue of the claimant’s eligibility, the employer must specifically set out why the applicant should be deemed ineligible for unemployment benefits.
Missouri: The Missouri General Assembly has not successfully codified TAAEA Section 252, and as a result the Department of Labor and Industrial Relations issued an emergency rule implementing the federal mandate. The emergency rule became effective October 1, 2013 and expiries March 29, 2014. An identical proposed rule is currently awaiting approval.
The emergency rule mirrors the language used in TAAEA Section 252, but also defines “adequately,” “pattern of failing,” and “timely.” Adequate responses to requests must include sufficient facts for a deputy from the Division of Employment Security to reach a final conclusion in regard to the claim. A “pattern of failing” is a repeated documented failure to respond, taking into consideration the number of instances of failure in relation to the total volume of requests. An employer will not have established a pattern of failure “if the number of the failures during the year prior to the request is fewer than two (2) or less than two percent (2) of the requests, whichever is greater.” “Timely” information must be postmarked or received by the Division of Employment Security on or before the date provided in the request for information.
Nebraska: The Nebraska legislation is similar to the Kansas legislation. Nebraska requires an employer to respond to a request for information within ten days after the mailing or electronic transmission of a request, and provides that if an employer fails to respond, the employer forfeits any appeal rights with respect to the claim. The legislation does not include language referencing a pattern of timely or adequately responding to requests for information.
North Dakota: North Dakota codified language tracking that used in TAAEA Section 252; the legislation is effective as of October 21, 2013. The North Dakota legislation does not include language referencing a pattern of timely or adequately responding to requests for information, and also does not specify how much time an employer has to respond to a request for information.
Washington, District of Columbia: The District of Columbia gives employers seven calendar days to respond to a request for information from the Department of Employment services. The information may be mailed, faxed, or submitted via the Internet. The District has adopted TAAEA Section 252 as if it were part of the District's code, and has provided no further guidance as to what constitutes a failure timely or adequately to respond to a request for information or a pattern of failing to respond timely or adequately to requests.