Details on Maryland and Maine UI Integrity Laws for Employers

With the October 2013 deadline (from 2011’s TAAEA) quickly approaching, the majority of states have by now passed legislation to comply with the federal UI integrity mandate.

Here is our snapshot of the UI integrity legislation recently passed in Maryland, followed by an overview of new UI integrity legislation in Maine.

image credit: JEKruger

Maryland’s UI integrity law

Maryland’s UI integrity legislation (HB 583)  was signed into law on April 9, 2013, and goes into effect on October 1, 2013. You may read the entire text of the law here.

Maryland does not define a “pattern of failure,” but does explicitly allow that an employing unit (or their agent) may raise the issue of good cause for failure to respond timely and adequately, which must be done in writing and the burden of proof would lie with the employing unit or their agent. The legislation goes on to state that the Secretary has discretion to waive a charge to the employing unit’s earned rating record, even when it has resulted from an erroneous report by the employing unit.

If this seems more generous than some other states’ UI integrity laws, it may be because Maryland’s UI fund is in better shape than are the UI funds of many other states.

HB 348 and HB 354 were also signed into law the same day as HB 583. HB 348 allows employers to submit application for refund or adjustment of UI contributions paid to the Department of Labor, Licensing, and Regulation (DLLR) within a year from the date of payment, or four years from the last day of the calendar quarter in which the payment was made, whichever is later. Read more here.

HB 354 authorizes the DLLR to impose a monetary penalty on claimants who fraudulently obtain UI benefits in the amount of 15% of the fraudulently-received benefits. The penalty may not be recovered by deducting from future UI benefits payable, but it may be recovered and is subject to interest. Read more here.

Here is the most current available UI data for Maryland:

  • Unemployment rate (as of June 2013): 6.7%
  • Taxable wage base in 2013: $8,500
  • Amount of state trust fund balance (as of June 2013): $758,970,000
  • Minimum weekly benefit: $25
  • Maximum weekly benefit: $430
  • Minimum tax rate: 1.00%
  • Maximum tax rate: 10.50%
  • Using employer-financed bond: No
  • Employer assessment provision: No
  • FUTA reduction: No
(Sources: ETS Blog, U.S. Department of Labor, SUCAP Reports, NASWA, Congressional Research Service.)

Other news for Maryland employers

Maryland’s Department of Labor, Licensing and Regulation has a new download for employers, titled “Top 5 Ways An Employer Can Help Reduce Unemployment Insurance Fraud: Help Control Your Unemployment Insurance Costs,” which you can download here.

The tips are:

  1. Report the reason for separation in a timely and accurate manner.
  2. Report all new hires and rehires to the Maryland New Hire Registry.
  3. Respond quickly to National Directory of New Hires letters and Benefit Cross Match letters.
  4. Attend appeal hearings.
  5. File quarterly tax and wage reports and pay taxes timely.
There is also contact information provided to report UI fraud.
image credit: auntjojo

Maine’s UI integrity law

On June 21, 2013, the governor of Maine signed LD 1311 into law, meeting the Section 252 UI integrity compliance requirement. Read the full text of the legislation here.

The main things to know about LD 1311 are:

  • that it goes into effect on October 21, 2013;
  • it defines a “pattern of failure” to respond timely or adequately to Maine Department of Labor requests for information as either two or more instances or 2% of the time within a year, whichever is greater;
  • Maine DOL determinations to not relieve employers of charges are subject to appeal.

Here is the most current available UI data for Maine:

  • Unemployment rate (as of June 2013): 6.8%
  • Taxable wage base in 2013: $12,000
  • Amount of state trust fund balance (as of June 2013): $277,556,000
  • Minimum weekly benefit: $65
  • Maximum weekly benefit: $372
  • Minimum tax rate: 0.95%
  • Maximum tax rate: 8.27%
  • Using employer-financed bond: No
  • Employer assessment provision: No
  • FUTA reduction: No
(Sources: ETS Blog, U.S. Department of Labor, SUCAP Reports, NASWA, Congressional Research Service.)

Check out ETS’ new page dedicated to tracking Section 252-compliant UI integrity legislation in the states here.

Download our one page Fact Sheet on Section 252 to get a better understanding of key provisions that will directly impact employers. 
Disclaimer: This article is general in nature and is not intended to replace the guidance of an employment tax expert and/or legal professional with regards to an appropriate course of action in your particular circumstances. Please consult with a professional for appropriate advice in your case. Pursuant to IRS “Circular 230” rules, any information included herewithin is not intended or written to be used for the purpose of avoiding penalties under the federal Internal Revenue Code.