According to the Department of Labor, the national unemployment program had an estimated 14.41% national improper payment rate in the 2024 reporting period. This represents billions of dollars improperly paid out, creating challenges for states and employers alike.
While there are a number of reasons improper payments are made, including fraud, the one area you have control over relates to providing (or failing to provide) timely and adequate responses to initial claim requests.
In 2011, the Unemployment Insurance (UI) Integrity Act was passed, with a focus on reducing improper payments, combating fraud, and enforcing stricter compliance with existing regulations. How does this legislation impact you as an employer?
Improper Payments Explained
A key component of the UI Integrity Act is centered around improper payments. Improper payments can occur for a variety of reasons, including:
- Claimants not meeting work search requirements.
- Claimants continuing to collect benefits after they return to work or misreporting their earnings while collecting benefits.
- Employers failing to respond timely or with adequate information.
- Errors made by the state
- Fraudulent claims
While many of the causes of improper payments are outside of your control, you can help reduce erroneous payments by providing timely and adequate responses to initial claim requests.
Timely, complete responses help streamline the claims process by reducing the number of follow-up requests for additional information that might be otherwise necessary.
Timely Responses
States typically allow 7 to 10 days to respond to a request for separation information at the initial claim level. It is imperative to respond by these state-mandated deadlines to ensure the information and documentation provided is utilized in making an initial decision on benefit eligibility.
Adequate Responses
When responding to an unemployment claim, it is important to provide as much relevant information at the initial level as possible. This helps you not only make a strong case but also meet the requirements of the UI Integrity Act.
Patterns and Penalties
Part of the UI Integrity Act allows states to impose penalties on employers who fail to provide timely and adequate responses. In some cases, the state will look for patterns in the employer’s response history. While the number varies by state, this pattern can be as few as two occurrences in one year.
Most states will not provide relief of benefits charged, regardless of the ultimate outcome of the case, if the response is late or incomplete. This could cost your organization thousands of dollars over the course of a year
Best Practices
How can you ensure a timely and adequate response is provided to your unemployment claims?
Respond to claims as they are received rather than by due date.
Working through claims as they are received ensures you have sufficient time to gather the facts of each case. On average, claims are sent within six or more days before the state mandated deadline.
Provide answers to all of the required questions.
SHIELD is a comprehensive tool to help guide you through a complete response. It outlines exactly what information is required for each separation reason, eliminating guesswork and helping you provide the most detailed and relevant information possible.
Provide all details at the time of the initial claim response.
While it may be tempting to wait until the state asks for additional information to provide specific details and documentation. Remember that additional state requests after the claim is processed typically only have a 24-to-48-hour turnaround time for response.
Therefore, it is better to take the additional time afforded during an initial claim request to provide as much information as possible to minimize the need for additional information and to ensure full compliance with the UI Integrity Act.
About Us
For more than 40 years, 501(c) Services has been a leader in offering solutions for unemployment costs, claims management, and HR support to nonprofit organizations. Two of our most popular programs are the 501(c) Agencies Trust and 501(c) HR Services. We understand the importance of compliance and accuracy and are committed to providing our clients with customized plans that fit their needs.
Contact us today to see if your organization could benefit from our services.
Are you already working with us and need assistance with an HR or unemployment issue? Contact us here.
The information contained in this article is not a substitute for legal advice or counsel and has been pulled from multiple sources. Some information was provided by our friend, Darby Gibson, Client Marketing & Insights Specialist, at Thomas & Company.
