Interacting with Employers

In progress

Challenge 1: Waiting for employer response to validate eligibility slows process

This is a challenge for validating monetary eligibility as well as “situational” eligibility. Whenever someone files a UI claim, the employer who will be charged for the claim must be informed.

• Many employers get all information from the agency and can only respond by paper and mail (this is inherently slower than digital processes, and has been exacerbated in the last year by mail delays)

• Even for those employers that use more digital tools, they may not get notified of a new claim by a former employee, and so everyone must rely on that person proactively going to the site frequently.

• If employers don’t want to challenge the claim, they aren’t required to respond. If they don’t respond within a certain period of time (depending on the state), then the claim is determined to be unchallenged and can proceed. However: several states, including PA and MA, do not have an automated system to move claims to the next step if employers don’t respond. Thus, in times of high volume, claims can get stuck in this step for a very long time.

Recommendation:

• US DOL should launch a specific initiative with states and NASWA to co-develop solutions to improve and digitize agency interactions with employers

Challenge 2: In many states, it has not been easy for employers to report claims resulting from identity theft

When employers see notification of a claim, there’s a form they use to respond back to the agency. In many states, this was not updated to be able to mark identity theft, which decreased efficiency and/or made it harder for the UI agency to tell what was going on with a particular claim.

Challenge 3: Employer-provided data can’t always be trusted

What our partners are saying

• "Enhanced wage records - we’re working with the chamber foundation and other groups to come up with standardized wage records not just for unemployment but also many other DOL interests as well. In this pandemic, it’s amazing how many times I hear that their employer submitted information incorrectly. Everything in this situation is bigger than usual, but this is extremely frustrating for us, for me personally, the claimant didn’t do something wrong, it was their employer who has presuming they’ve been doing things right all these years but actually been incorrect." --State B

Challenge 4: There’s no disincentive for employers to challenge claims

The experience rating system as it stands today influences (and incentivizes) employers to contest a former employee’s claim to unemployment benefits. When an employer challenges a claim, fact-finding is initiated. In this fact-finding, the UI agency must get information from the employer and from the would-be claimant; an expert in state UI law is required to conduct the fact-finding to be able to make a determination. Thus, there is a cost to UI agencies associated with every employer challenge.

This process can be lengthy, with both claimant and employer needing time to be able to respond, sometimes with many documents that the agency expert must wade through. In the case where the claimant is found to be eligible for benefits, this process has simply served to increase the amount of time it took to first payment.

Additionally, employers are at a strategic advantage when it comes to these challenges, in a way that interferes with the principle of ensuring that all eligible claimants should be able to receive benefits. Employers frequently have lawyers or contractors hired specifically for the purpose of making these challenges (Equifax and ADP are major players in this space). In contrast, would-be claimants frequently do not have the resources or knowledge to state their case effectively in contrast. Claimants are unlikely to have the funds to hire a lawyer, and may not know that legal aid organizations could help them (and even if they did know this, the organization might not be able to take their case in a timely manner).

Recommendation:

US DOL should recommend to States that their experience rating system incorporate the percent of claims against an employer that are challenged, and of those that are challenged, what percentage of them are decided in the company’s favor, compared against some baseline. That baseline should account for the fact that right now, it is likely that too many claims are being “successfully” challenged (though of course there is always going to be some number of claims found in the employer’s favor). This normalized index of each employer’s experience with the UI appeals process can be incorporated into the scheduling of tax rates for one employer in accordance with the relative experience of other employers.