Unemployment Insurance & Short-Time Compensation Webinar Date: March 1, 2013 Presented by: Suzanne Simonetta Chief, Division of Legislation, OUI U.S. Department of Labor Employment and Training Administration

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Moderator/Presenter Moderator: Gay Gilbert Title: Administrator Organization: Office of Unemployment Insurance, Employment & Training Administration Presenter: Suzanne Simonetta Title: Chief Organization: Division of Legislation, Office of Unemployment Insurance, Employment & Training Administration #

In General Authorized by Social Security Act of 1935. A social insurance program providing temporary partial wage replacement to workers who lost their jobs through no fault of their own. Automatic & targeted economic stabilization during recessionary times. Operates counter-cyclically. To be eligible for benefits jobless workers must: Demonstrate prior workforce attachment; and Be able and available for work. #

Structure of System The UI program is a Federal-State partnership. Federal law defines basic requirements. States design their programs within these guidelines and administer them based on their own state law. Employers get a large Federal tax credit and states get UI administrative grants by complying with Federal guidelines. #

Functions of Federal Government Ensure state laws conform to federal law Provide administrative funds to states Set broad policies for administration of program, and monitor state performance Invest state UI tax revenues in Unemployment Trust Fund #

Functions of States Establish program requirements: Earnings and length of employment needed to quality for benefits Benefit amounts Duration of benefits Eligibility and disqualification provisions Devise operational procedures Administer program: process applications for UC, determine eligibility, make benefit payments Collect state UI taxes from employers #

Benefit Rights Depend on worker’s experience in covered employment in a past period known as the base period. Typically 1st 4 of last 5 completed calendar quarters or most recent 4 completed calendar quarters. Qualifying requirements vary from state to state. Up to 26 weeks of benefits available. Maximum weekly amount varies. #

Eligibility Unemployed through no fault of own Layoff, quit for good cause, or no discharge for misconduct connected with work. Able to work and available to work NOTE: Most states have a waiting week. First week that individuals meet all eligibility requirements is NOT compensable. #

Benefit Statistics Average Weekly Benefit Amount (AWBA) varies by state national average ~$300 AWBA represented about 33% of average weekly wage. Average duration of regular UI benefits – 17 weeks. #

UCFE & UCX Laws 5 U.S.C. Ch. 85 Provides for coverage of Federal and military employees States operate the UCX and UCFE programs under agreement with the Secretary of Labor Eligibility is determined under provisions of state law, except for UCX separation issues Federal agencies reimburse DOL for benefit costs #

Filing a Claim Claims are filed mostly by telephone or by Internet but also in One-Stop Centers. States must notify the worker’s last and prior employer(s) and ask for the reason for the worker’s separation from work. States must adjudicate the reason for separation if other than a lack of work. #

Filing a Claim If eligible, state agency informs worker of amount of benefits and # of weeks. Amount depends on past wages and certain state limits. To receive benefits, claimant must be “able and available” for work and “actively” search for a new job in most cases; continued weekly claims must be filed. Most claimants receive their first payment within 14/21 days of the end of the week they filed their new claim. Usually by direct deposit or debit card; sometimes by check. #

What is Short-Time Compensation (STC)? STC (also known as worksharing or shared work): Preserves employee’s jobs and employers’ trained workforce during disruptions to a firm’s regular business activity by reducing the hours of work for an entire group of affected employees rather than laying off some employees while others continue to work regular hours; and Enables individuals whose hours have been reduced to get a partial UI payment and employers to keep their staff. OPTIONAL. #

Benefits of Short-Time Compensation For Employers Retains trained and experienced workers who will be immediately available when demand for their services increases. Temporarily reduces labor costs. For Workers Provides economic stability by enabling them to maintain their jobs/skills while experiencing a smaller cut to their weekly income. Sustains employee morale. #

States with Short-Time Compensation Laws Arizona, Arkansas, California, Colorado, Connecticut, District of Columbia, Florida, Iowa, Kansas, Louisiana, Maine, Maryland, Massachusetts, Michigan, Minnesota, Missouri, New Hampshire, New Jersey, New York, Oklahoma, Oregon, Pennsylvania, Rhode Island, Texas, Vermont, & Washington. Some states do not have an active STC program (e.g. LA). Some are very new programs so they have no participants yet (e.g. DC, MI,). NJ’s law does not currently conform to federal law so it is delaying implementation of STC. CT law may preclude Federal employer participation since it currently prohibits participation by reimbursing employers. CO’s STC law is set to expire on 7/1/13. #

Overview of Short-Time Compensation Program Requirements In all states: Employer participation is voluntary. Employer reduces employee hours in lieu of layoffs. The reduction is at least 10% and not more than 60% and employees are not disqualified from UI. Employees receive a pro-rata share of benefits they would have received if totally unemployed. E.g., individuals working 4 days instead of 5 experience a 20% reduction in hours would receive 20% of the weekly amount they would receive if they were totally unemployed. State agencies require the employer to submit a written plan #

Overview of Short-Time Compensation Program Requirements In some states: Requires employers to continue to provide health and retirement benefits. [NOTE: will be mandatory for all STC states in 2014.] Requires affected unit to be at least a certain size to participate in STC. Collective bargaining agent must agree to the plan. Employer will not hire new employees in the affected unit during the term of the STC plan. Excludes new, seasonal, temporary, or intermittent employees from getting STC. Requires STC plan to avoid layoffs of a certain minimum percentage of workers in the affected unit. Excludes part-time workers. [NOTE: will be mandatory for all STC states in 2014.] #

Short-Time Compensation Process Employers must submit an STC plan to the state UI agency specifying the affected units, employees, etc. Plan approval may take 15 – 30 days. Upon approval by the state, STC claims can be filed, processed, and paid. Many states require the employers to provide information for both initial and continued claims; some require the employees to provide information via typical claim filing process. After individuals have served their waiting week, they can begin to receive STC payments for each subsequent week their hours are reduced during the period the STC plan is in effect. #

Short-Time Compensation Implementation Issues Only 25 states and DC have STC programs in their UI laws. Some states, particularly those with relatively new STC laws, have not fully implemented their STC programs and may not be able to do so quickly. Lack of experience with Federal employers entering into STC plans may be a challenge. While there are no barriers to participation in Federal law and we generally don’t believe there are any in state law, some questions may arise. Many states’ STC programs are not fully automated, requiring manual entry of key. #

Short-Time Compensation Implementation Issues High workload will be a challenge for states to administer. Because the program requirements vary from state to state, no way to ensure that all similarly situated employees nationwide would be eligible for STC in the state where they work. Employers need to be prepared to periodically provide information about each employee experiencing a reduction in hours so the state can process STC claims. Employers that reimburse UI payments must also reimburse STC payments. #

Please enter your questions in the Chat Room! #

Speakers’ Contact Information Speaker: Suzanne Simonetta Title: Chief Organization: Division of Legislation, OUI Email: Simonetta.Suzanne@dol.gov Telephone: 202-693-3225 #

Find resources for workforce system success at: Thank You! Find resources for workforce system success at: www.workforce3one.org #