Recent Change to Unemployment Law May Affect Your Practices

September, 2013

When a former employee claims unemployment benefits, the Employment Department will try to obtain information from the employer to get the employer’s side of the story. This typically occurs in two ways. First, the Department will send a Notice of Claim Filed form to the employer and ask the employer to return the form to the Department stating the reasons for the work separation. Second, a Department representative will typically try to call the employer to obtain more detail about the work separation.

Currently, there is no requirement that an employer return the Notice of Claim Filed or speak with the Department about the reasons for the work separation. For various reasons, employers do not always complete and return the form.

On October 7, a new law goes into effect regarding employers’ obligations to respond to the Employment Department’s request for information. The law applies when an employer (1) fails to respond to a Department request for information in a timely manner and with adequate information, (2) has a pattern of failing to respond, and (3) the failure to respond causes an overpayment. If the Department determines that the employer’s conduct has met all three prongs of the new law, the Employment Department may charge the employer’s unemployment account for benefits paid to an employee, regardless of the reason for the work separation. This could negatively affect an employer’s unemployment tax rate.

While the situations where this new law will apply are limited, it is advisable to respond to any request for information from the Department to avoid being penalized under the new law. Additionally, it is a best practice to respond to the notices regardless of the law; this is your opportunity to tell your side of the story about why the employee is no longer working for you.

If you have any questions about the new unemployment law or best practices to keep your unemployment tax rates down, contact Cascade today.


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