Pennsylvania’s Unemployment Compensation Programs UC Issues UpdatepennsylvaniaDEPARTMENT OF LABOR & INDUSTRYSummer 2015Volume 18 Number 2JobGateway - Bigger and BetterJobGateway was introduced in 2012 as Pennsylvania’s labor exchange website for employers andjob seekers. Employers can use JobGateway to create or upload job postings, search a pool of morethan 400,000 active job seekers, receive candidate recommendations, and have their job postingsrecommended to candidates with matching skills—all for free!Perhaps you visited JobGateway in its early days. If so, you’ll want to have another look. Since itsinception, the site has undergone continuous refinement and improvement, both in functionality and inease of use. Here are just a few of the enhancements you’ll discover: A more powerful candidate search, and more relevant candidate recommendations. A newsearch engine allows employers to home in on the perfect candidate for a position. Search resultsand recommendations are returned in order of relevance, and they can be filtered by candidatelocation, education, experience, skills, veteran status, and other criteria. Internships. Employers can now post internships and search for candidates looking forinternship opportunities. Enhanced communication. Employers now have the ability to generate and send custommessages to job seekers from within JobGateway . A streamlined registration process. It takes just minutes to join more than 93,000 otherregistered JobGateway employers. Recruitment resources. JobGateway puts a variety of tools and data at employers’ fingertips,including labor market statistics, occupational profile information, information on tax credit andbonding programs, and a military occupation translator.Of course, JobGateway also comes with something not to be found on other recruitment and job searchwebsites: trained staff at offices throughout the commonwealth waiting to offer personalized assistance toemployers using the site. To find the nearest PA CareerLink office, visit www.pacareerlink.state.pa.us.If you’ve never been to JobGateway , now is the time to check it out. If you haven’t visited lately, stop byto see just how much has changed.In this Issue. Electronic Filing Compliance The Pennsylvania New Hire Reporting Program How Will Unemployment Claims Affect My Contribution Rate Protect Your Business From Higher TaxesTom Wolf GovernorKathy M. Manderino Secretary
2 Summer 2015UC Issues UpdateElectronic Filing ComplianceWe are pleased to report that over 99 percent of employers are filing their quarterly tax and wage reportselectronically in the Unemployment Compensation Management System (UCMS), as required by law. Also,90 percent of contributions are being paid by electronic options such as ACH debit, ACH credit or creditcard. We would like to take a moment to thank the employer community for their compliance with theelectronic filing requirement. Electronic filing and payment allows the department to more efficiently andaccurately process tax/wage reports and payments. This has led to more accurate billings, experiencerates, and payments of benefits to claimants.How Will Unemployment Claims Affect My Contribution RateIf an employer qualifies for an experience-based contribution rate, the employer’s rate is a reflection ofthe employer’s unemployment compensation (UC) history from the date the employer became subjectto the Pennsylvania UC law. An experience rate takes into consideration wages paid by the employerand reported to the department, contributions paid to the UC Fund and benefits that are charged to theemployer’s reserve account.Under the UC contribution rate formula, benefits charged to an employer’s account put upward pressureon the employer’s rate for subsequent calendar years.The extent that UC benefit charges may affect an employer’s rate depends on the amount of the chargesin relation to other values that have a favorable impact on a contribution rate. If the amount of the benefitcharges is high in comparison to the size of the employer’s payroll or the amount of contributions theemployer has paid to the UC Fund, the benefit charges will have a greater impact on the employer’s rate.One component of an experience rate is the “reserve ratio factor.” This is the ratio of an employer’s reserveaccount balance to his average payroll for the most recent three fiscal years. The higher the reserveratio is, the lower the employer’s rate will be. An employer’s reserve account balance is determined bysubtracting the benefits charged to the employer from the amount of contributions paid by the employer,over the lifetime of the employer’s UC account. Benefit charges decrease the employer’s reserve accountbalance and lower the reserve ratio, which can result in a higher contribution rate.Another rate component is the “benefit ratio factor.” This is the ratio of the employer’s average benefitcharges to his average payroll, both for the most recent three fiscal years. The higher the benefit ratio is,the higher the employer’s rate will be. Benefit charges directly increase the benefit ratio and thus can raisethe employer’s contribution rate.The benefit ratio factor looks only at benefit charges for the most recent three fiscal years. Therefore,benefit charges cease to affect the benefit ratio factor when they are no longer within this three fiscalyear period. However, the reserve account balance is a lifetime figure. Benefit charges never leave thecalculation of the employer’s reserve account balance, but their impact can be diminished over time if theemployer’s future contributions exceed his future charges.
3 Summer 2015UC Issues UpdateThe Pennsylvania New Hire Reporting ProgramThe Pennsylvania New Hire Reporting Program was established in 1998 in accordance with federal andstate law, and mandates that all employers report basic information about all newly hired and re-hiredemployees. Administered by the Center for Workforce Information and Analysis (CWIA) within L&I, thePennsylvania New Hires Reporting Program aids in the collection of child support from non-custodialparents. Information provided by employers is matched against files containing the names of non-custodialparents who owe child support. When a match occurs, a notice is immediately sent notifying the employerto withhold child support, thus expediting child support payments. For calendar year 2014, nearly 21.5million in child support monies were collected due to the new hire cross match. Since 2010, child supportcollections activity from wage garnishments issued to obligors totaled 134.5 million through December2014, an average of 2.2 million per month.Data collected from the Pennsylvania New Hire Reporting Program is also used to detect fraud in theUC and workers’ compensation programs. Since 1998, this matching process has identified in excess of78,500 UC fraud overpayments resulting in the recovery of 34.7 million.CWIA continues to increase public awareness of the New Hire Program (and increase employer compliancewith reporting laws) by conducting outreach meetings with employers at local CareerLink offices,partnering with the Department of Human Services at the local level through the Office of Child SupportEnforcement, and educating and informing both the public and employers about the importance ofreporting new hires.To learn more about the New Hire Reporting Program and reporting process, please visit www.CWDS.pa.govand click on the “Report New Hires” hyperlink under the “Employers” section of the page.
4 Summer 2015UC Issues UpdateProtect Your BusinessFrom Higher TaxesHelp Prevent Improper Payment ofUnemployment Compensation (UC) Benefits What exactly is an improper payment? What causes an improper UC payment?How Does UCImpactEmployers?In most states, UCbenefits are funded byemployer taxes.Improper payment ofUC benefits may resultin higher taxes to allemployers.UC benefits allowunemployed workersto continue to buygoods and services.An improper payment of UC benefits means that a claim forbenefits was paid in error. An improper payment of benefitscan result when inaccurate information is provided by theclaimant or employer, or when information is not receivedby the UC office in a timely manner. Once an improperpayment is detected, the claimant is notified of anoverpayment.Did you know . . . UC benefits to qualified unemployed workers arefunded by employer UC taxes. The U.S. Department of Labor estimates that in fiscalyears 2011 through 2014 more than 11 percent ofUC benefits were paid improperly, usually becauseof inaccurate or missing information. Improper payment of benefits is a serious problem thathas a financial impact on employers and can result inhigher UC taxes to all employers.Protect Your Business From Higher Taxes continued on page 5
5 Summer 2015UC Issues UpdateWhat can you do to help prevent improper UC payments?Be an active partner to help improve payment accuracy. Help reduce employer costs bytaking three critical steps to provide important information to the UC program.1. Provide complete and accurate employee separationinformation.Avoid the need for costly appeals or overpayment of benefits. Provide separation informationpromptly when requested to help determine claimant eligibility for benefits, and as a result,accurate benefit charges to employers.2. Respond promptly to any “Request for Verification of WeeklyEarnings” from UC.A prompt response to a request for verification of employee weekly earnings will helpprevent improper payment of UC benefits. (An employee may be eligible for a partial UCpayment, based on part-time work.)3. Report all new hires to the State Directory of New Hires by thedue date.Timely reporting of all new hires helps prevent payment of ineligible UC claims after aclaimant has returned to work.The Costs and Consequences of Non-ComplianceCompanies that do not comply with state and federal UC requirements for providingemployee information face a number of preventable costs and consequences, including: Improper account charges for benefits paid to ineligible claimants Increases in employer UC taxesIn addition to following the UC requirements for reporting employee information,employer partnership with the UC program is just good business.For more information, please visit www.uc.pa.gov; click on “Employers.”UC Issues Update is published by the Pennsylvania Department of Labor & Industry on a quarterly basis. Questions, commentsand feedback can be sent via email to [email protected] General UC Tax information is available by calling 866-403-6163from 8 a.m. to 4:30 p.m. If you have questions regarding UC benefit charges to your account, please call 717-787- 4677from8 a.m. to 4:30 p.m. If you suspect fraud, report it online at www.uc.pa.gov under “Report Fraud,” or contact 800-692-7469.Auxiliary aids and services are available upon request to individuals with disabilities. Equal Opportunity Employer/Program
rates, and payments of benefits to claimants. How Will Unemployment Claims Affect My Contribution Rate If an employer qualifies for an experience-based contribution rate, the employer’s rate is a reflection of the employer’s unemployment compensation (UC) history from the date the employer be