Update: May, 2013
Unemployment Update – UI Compliance
A Renewed Focus on UI Integrity
As the effects of the recent recession continue to impact state unemployment reserves, a renewed focus has been placed
on UI Integrity, and a critical shift in perspective has occurred as states attempt to replenish insolvent funds. In 2011, The
DOL followed up on a recent Presidential Order (13520) with a Call to Action ensuring that payment integrity remains a
top priority. Specifically, this directive provides the expectation that every state will not only assess root causes of
improper benefits, but implement specific action plans to reduce these payments.
Compliance: A New Perspective in UC Management
To ensure continued federal funding, as well as the successful implementation of these federal mandates, states are
beginning to shift responsibility for UI Integrity to employers by enforcing more stringent penalties for non-compliance.
Employer response to unemployment claims is no longer perceived as a choice, but as a requirement that must be fulfilled
in order to remain compliant. Specifically, the perspective toward response to state requests for information (RFIs) has
transitioned in the following manner:
In the Past: Employers often made a choice between responding or not responding to state RFIs (i.e., a response was
only needed if the employer felt that benefits should not be paid).
Moving Forward: Employers are required to respond to all state RFIs generated through the SIDES (State Information
Data Exchange System) interface in order to remain in compliance with new state regulations and avoid financial
repercussions.
In summary, while employers have historically been inclined to respond (i.e., protest) only to those unemployment claims
that were considered inaccurate, they will now be required to respond to all claims generated through SIDES,
regardless of their perceived legitimacy, in order to remain compliant with emerging state regulations and minimize
financial exposure.
Employer Strategies Moving Forward
With compliance functioning as a critical element of the UC process moving forward, there are several strategies for
preventing unnecessary benefit payments while conforming to these new regulations including:
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Providing timely, accurate and complete documentation in response to all claims
Providing employee training regarding how to most effectively respond to requests from state agencies
Utilizing electronic state data exchanges, which expedite the delivery of critical claims information while
supporting data integrity
Responding promptly to Wage Earning Verification requests
Reporting new hires and re-hires to state agencies (including the Nat’l Directory of New Hires) within 20 days
Adherence to these guidelines will not only reduce overpayments from state funds, but will help improve state agencies’
efficiency in administering the process while ensuring that employers’ financial exposure (in light of new legislation) is kept
to a minimum.
Further information on this topic can be found in our recent article entitled UI Integrity: What Employers Need to Know
from the Journal of State Taxation. For additional unemployment cost management techniques, as well as information
about SIDES, please contact Pete Krieshok at (314) 214-7325 or via e-mail at [email protected]. You can also
visit our corporate blog at http://blog.equifaxworkforce.com.
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