Everything You Ever Wanted to Know About Unemployment Insurance

Unemployment InsuranceSystem

Our Nations Safety Net For Economic Stability

Barbara Ramsey, UI DirectorPete Shipman, Asst. Director, BenefitsRenae Tidwell, Asst. Director TaxOklahoma Employment Security Commission

1Brief introduction

August 14, 19351935, Social Security AdministrationFrances Perkins - Secretary of Labor for President Franklin D. Roosevelt

The first woman to hold a Cabinet post

Chaired the Committee on Economic Security (CES)

In 1935, the CES created the Social Security Act which created the federal-state unemployment compensation (UC) program

33Federal/State PartnershipBased on federal law, administered by state employees under state law

Federal laws provide framework for state programs

On behalf of states, the U.S. Department of Labor (USDOL):

Ensures conformity and compliance with federal lawProvides administrative fundingMonitors states performance and provides technical assistanceHolds and invests monies in trust funds

44ConformityIf states meet minimum federal requirements they are considered to be in conformity with federal law and may receive:

Up to 5.4% basic and additional tax creditsFederal grantsAdministrative funding

55Changes Over the Years75th Anniversary in 2010

In the 75 years since it inception, the Unemployment Insurance program has undergone a number of changes.

The duration of regular state Unemployment Insurance benefit has increased from 16 weeks to the current maximum of 26 weeks in most states.

Disqualification provisions have also changed in the early years, states did not disqualify individuals for quitting work, being fired for misconduct, or refusing suitable work they were simply held ineligible for a certain period of time. By the end of 1945, 26 states had imposed harsher disqualification provisions, and today all states have them.

Administration of UI ProgramFUTA Tax is distributed to states to administer the UI program

Based on UI Claim load Active Registered Employers

100% of Unemployment tax paid by employers is deposited into the UI Trust Fund to pay benefits to claimants

UI Performance Measures"UI Performs" is the unemployment insurance program's performance management system. The goal of UI Performs is cooperative management, planning and oversight leading to increasingly effective, consistent, efficient service to workers and employers.

UI operations are comprised of benefit eligibility determinations, payments or denials, an accessible appeals system, employer wage reporting and tax collection, and trust fund management. The UI Performs system of oversight includes two performance tracking categories. The first category is Core Measures, which encompasses oversight on key performance areas representative of the health of the entire unemployment insurance system. The Core Measures monitor key activities which have uniform national Acceptable Levels of Performance (ALPs). In the second category, the federal partner also maintains Management Information data to facilitate analysis of performance and to assist in planning corrective activities when necessary. Management Information tracks state performance on subsets of Core Measures and on ancillary activities such as interstate and federal programs.

8UI Performs Core MeasuresBenefit Measures

First Payment Promptness: 87% of all 1st payments made within 14/21 days after the week ending date of the first compensable week in the benefit year

Nonmonetary Determination Time Lapse: 80% of Nonmonetary Determinations made within 21 days of the date of detection of any nonmonetary issue that had the potential to affect the claimants benefit rights

Nonmonetary Determination quality Nonseparation and separations: 75% of cases pulled for review in Benefit Quality Control (BTQ) quarterly samples must score equal to or greater than 95 points, based on the evaluation results of the review.

UI Technical SupportJim Polly, Chief17 staff

UI Help DeskTraining for all UI benefits employeesDesign and implement new systemsNon-Monetary decision quality and timeliness (PMR)UI Support (process all incoming documents)Mass claims

Benefits AdministrationJohn Scott, ChiefCombined Wage claimsTRA, DUA, UCX And UCFE (and other Federal Programs)Direct Deposit (EFT) and Debit CardsResolve Interstate issuesRespond to subpoenas

Benefit Payment ControlTerry McHale, ChiefInvestigate fraudulent claimant activityEstablish fraud overpaymentsCollect overpayments from claimantsGarnish wages (as last resort)Tax Warrant InterceptNew Hire and wage crossmatchUI Field OperationsJim Polly, ChiefProvide in-person assistance in Local Offices throughout the stateProvide assistance via phones in local area when Service Center lines are busyProvide UI information in Rapid Response meetings Claims AdjudicationGwen Harton, ChiefScheduling and completion of majority of non-monetary decisions throughout the stateResponsible for meeting and exceeding quality standardsResponsible for giving all parties due process in the adjudication processResponsible for timely completion of decisionsPre-assignment adjudicatorsUI Service CentersTwo UI Service Centers

Tulsa: Annette Cornelius, Chief Oklahoma City: Sandra Oliver, Chief

Customer complaints (employers and claimants)Works closely with UI Technical UnitEstablish UI ClaimsFact Finding

Tax EnforcementRon Selby, ChiefAudit employer accounts to insure proper tax paymentsDetermine employer-employee relationshipAssist In SUTA dumping detectionInvestigate wage objectionsPerform status investigationsDeal with delinquent employer accounts

Employer ComplianceKathleen McClure, ChiefDetermine employer liabilityDetermine benefit wage chargesDetermine employer tax ratesProcess quarterly tax payments and wage reportsDeal with delinquent employer accounts and file tax warrantsAssist employers with correct filing and reporting

In December 2010, Congress passed the Tax Relief, Unemployment Insurance Reauthorization, and Job Creation Act of 2010 (P.L. 111-312), which among other things extended the EUC08 Federal Benefits for the eight time. The EUC08 Extended Federal Benefit program gave states that qualified based on their unemployment rate extended benefits in Tier 1, Tier 2, Tier 3, Tier 4 and some states passed legislation that paid a combination of state and federal benefits as EB extended benefits.

Oklahoma reached a 6% unemployment rate by July 2009 triggering on the Tier 3 Extended Benefits. Oklahoma claimants could qualify for up to 73 weeks of UI and Federal Extended Benefits. Claimants in high unemployment rate states could qualify for up to 4 Tiers and State/Federal EB of Unemployment Benefits.

In February 2012 Congress passed new legislation that changed the criteria for EUC and put new requirements on all EUC claimants.

Effective June 1st 2012Tier 1 sameTier 2 6% unemployment rateTier 3 7.5% unemployment rateTier 4 8.5% unemployment rateAll EUC Claimants are required to be pulled for REA and provide work search activitiesRegular Unemployment: 22 to 26 weeks Sept 2, 2012Tier 1:20 weeks14 weeksTier 2:14 weeks14 weeksTier 3:13 weeks9 weeksTier 4:6 weeks6-16 weeks (if state is not on EB)YEAR# of claims# of wks paid# of Non-monTotal UI paidUI/EUC Total200098,053531,36747,692$111,201,065.002001146,208818,60862,778$182,581,276.002002154,5901,100,28468,247$252,419,796.002003169,1161,256,50071,074$282,379,845.002004145,103969,90168,363$207,176,716.002005122,125721,18060,668$156,047,077.002006101,595622,18758,426$142,350,093.002007112,153627,93558,564$153,706,474.002008131,079718,03764,960$191,935,122.002009241,1431,850,08699,330$544,913,243.00 $ 807,992,394.00 2010199,4951,456,54190,906$400,246,778.00 $ 687,176,458.00 2011170,8021,116,95985,114$298,025,220.00 $ 587,328,706.00 Unemployment Insurance Claim Statistics Oklahoma 2011

Initial claims for UI benefits made to the Oklahoma Employment Security Commission (OESC) in 2011: 170,802 Initial claims made to the OESC that were protested in 2011: 60,313

Due to voluntary quit: 15,401Decisions to allow benefits (in favor of claimants): 1,897Decisions to deny benefits (in favor of employers): 13,504Claimants: 12.3%Employers: 87.7%

Due to discharge for misconduct: 44,912Decisions to allow benefits (in favor of claimants): 27,108Decisions to deny benefits (in favor of employers): 17,804Claimants: 60.4%Employers: 39.6%

*An initial claim for unemployment benefits is made by the claimant submitting information about the claimants separation from employment through the OESC Internet claims process or by telephone to a claims taker in the OESC call center.

UI Performance Measures 2011 for Non-MonsFor 2011: 62,249 separation determinations were issued. 44,934 were issued within 21 days. 72.2%. 35,807 non-separation determinations 31,295 were timely 87.4%. Total for the year 98,056 determinations76,229 were timelyThis is 77.7%, below the 80% required by the feds, but much higher than the 68% we recorded for 2010.

The recession that started in 2008 put the UI System to the test!! For the first time in the history of the UI Program the USDOL passed four federal extensions of UI Benefits. And some states has State/Federal Extended Benefits on top of the four extensions. By July 2009, 39 states were broke in their regular UI Trust Funds borrowing from US DOL to the tune of $42 Billion dollars.

States that borrowed to pay regular unemployment benefits not only had to raise employer state unemployment tax rates but will lose a percentage of the 5.4% FUTA

Credit to repay the loans.Bankrupt states

As of September 13th, 2011 27 states have outstanding loans from the Federal Unemployment Account.24YearUI Rate Taxable Wage Cond Factor Max Benefit Wkly Benefit UI Trust Fund 20013.70% $ 10,100.00 no $ 6,300.00 $ 291.00 $ 568,349,718.23 20024.80% $ 10,500.00 no $ 6,600.00 $ 304.00 $ 482,581,457.29 20035.60% $ 11,700.00 A $ 6,500.00 $ 303.00 $ 443,856,002.00 20045.00% $ 14,300.00 D $ 5,700.00 $ 275.00 $ 346,627,680.00 20054.50% $ 13,800.00 C $ 6,200.00 $ 292.00 $ 447,119,256.00 20064.10% $ 13,500.00 B $ 6,800.00 $ 317.00 $ 608,159,139.55 20074.00% $ 13,200.00 A $ 7,400.00 $ 342.00 $ 700,237,307.00 changed to fiscal period 20084.80% $ 13,600.00 no $ 8,500.00 $ 392.00 $ 807,456,866.31 20096.80% $ 14,200.00 no $ 8,900.00 $ 409.00 $ 856,327,870.90 20106.90% $ 14,900.00 no $ 9,300.00 $ 430.00 $ 715,521,985.06 20116.80% $ 18,600.00 D $ 7,400.00 $ 358.00 $ 362,565,463.19 20124.80% $ 19,100.00 D $ 7,700.00 $ 368.00 $ 345,436,947.89 $ 628,616,586.76

Todays economic challengeshistoric challenges by many measures require us to persevere and rededicate ourselves. Our nations workforce and reemployment system provides vital linkages between workers, employers and other economic stakeholders. Now more than at any time in recent history, we need to put that system to work in the most efficient way possible to maximize our efforts and get America (especially claimants) back to work.

Concurrent Sessions:SUPERSESSIONReemploying UI Claimants through an Integrated/Interconnected Workforce System A CALL TO INNOVATE!!Getting UI Claimants back to work A spotlight on the REA programTools and Technology Making reemployment happenSecretary of Labor, Hilda L Solis Vision Good Jobs for Everyone!

UIPL 19-11A call to action for states to join DOL in bringing down the UI improper payment rate by focusing on prevention.UI improper payment rate for 2010 is 11.2%, which is above the rate set forth by IPERA of 10%.(10.6% overpayment rate and .6% underpayment rate).Main causes of overpayments are Benefit Year Earnings (BYE), Separation, Work Search, and Employment Services (ES) Registration.

Government overpaid $14 billion in unemployment benefitsDon't spend that unemployment check too fast. The government might ask you to pay it back. Overpayments are a rampant problem in the unemployment insurance system. The federal government and states overpaid an estimated $14 billion in benefits in fiscal 2011, or roughly 11% of all the jobless benefits paid out, according to reports from the U.S. Labor Department.

Now, the U.S. Department of Labor and the states are in the midst of a massive effort to try to recoup some of their lost funds and avoid future overpayments.Story on Yahoo! Finance Monday July 9, 2012US Overpayments by Cause - FY2010Sev./Vac./SSI/Pension$163,394,550 2.3%Dependents Allow.$38,674,704 0.5%Oth. Elig. Iss.$273,182,985 3.9%Other Issues$294,292,567 4.2%Base Period Wage Iss.$380,247,470 5.4%Able+Available$382,738,451 5.4%JS Reg.$788,343,823 11.1%Work Search Issues$1,286,707,519 18.2%Separation Issues$1,385,523,642 19.5%Benefit Year Earnings$2,094,269,508 29.5%Strategies for Reducing OverpaymentsTargeting for Prevention: BYE, Separation, & ES registrationStates form UI Cross-Functional Integrity Taskforces to address integrity issuesMandatory use of the National Directory of New Hires (NDNH) and Automated Claimant Notification (Oklahoma implemented in 1999)Claimant MessagingImplement State Information Data Exchange System (SIDES)Whats New: BenefitsDevelopment of new online claimant portal

Exploring new model of all UI Claims filed online

Development of new application for Benefit Payment Control Unit/Overpayment system

Reintegration ES/UI Whats NewTAX DivisionOESC Employer Portal Information To better serve Oklahoma, the OESC has developed an Internet Portal Ez Tax Express-to enable employers to perform many of the functions via the Internet which were previously completed on paper. 1st quarter 2012 76% of employers filed online and 46% paid by EFT.