UI Claims Management

What To Know About New Washington UI Integrity Law

08.23.2013

Author

Jeff Aleixo

Washington enacted it’s Section 252-compliant UI integrity legislation on May 8th of this year, which will take effect on October 20th, 2013. If you are unfamiliar with Section 252 and the rush to enact UI integrity legislation before the October deadline, read more about it here and download our Section 252 fact sheet for employers here.

Here’s what employers with operations in Washington need to know:

Washington UI Integrity Legislation (SB 5355)

The new Washington state legislation (SB 5355, full text available here as pdf) adopts the federally-mandated language that employer’s UI accounts may not be relieved of benefit overpayment-related charges when the overpayments were made as a result of employer (or employer’s third party agent’s) failure to provide timely and adequate detail in response to a state agency request for information on the UI claim.

This non-relief of charges applies to reimbursing employers as well; they will not be credited for erroneous benefit payments made due to their own failure to respond timely and adequately.

Washington legislation defines “adequate” as providing accurate information of sufficient quantity and quality that would allow a reasonable person to determine eligibility for benefits.

SB 5355 also defines a “pattern.” For this purpose, pattern means a benefit payment was made due to employer or employer’s agent’s failure to respond timely or adequately to a written request for claim information from the agency, without establishing good cause for the failure, if the greater of the following calculations for an employer are met:

1) At least three instances of failure in the previous two years; or

2) 20% of the total current claims against the employer involve instances of failure.

What’s good for employers: there may be exceptions made if they establish good cause for failure, in cases where failure to respond timely may be unavoidable and outside of their control.

What’s bad for employers: three instances of failure in the previous two years leaves little room for error, particularly for employers going in to this who have not already cleaned house in their UI claims operations and response systems.

Reminder: per DOL, the average national employer cost per UI claim is roughly $7,703. According to this NY Times article, total employer costs over three years under certain conditions may be over $16,000. If you wait until you’ve used your three “free instances” to pay attention to this area, the costs per claim over the next two years will quickly add up.

Spotlight on overpayments in Washington state:

The DOL has collected some excellent data on overpayments in each state. Here’s what we know about Washington:

  • $74,039,200 in overpayments (between 6/30/10-6/30/11)
  • Employer role in overpayments deemed relatively low (5% in part or in whole)
  • Agency role in overpayments also low relative to some other states (7.21% in part or in whole)

Other UI news for Washington employers:

Recently it was also announced that the SUI taxable wage base will increase from $39,800 to $41,300 for calendar year 2014. Also, for new UI claims filed after July 7, 2013, the minimum weekly unemployment benefit amount will increase to $148, and the maximum will increase to $624. These changes occurred because Washington state’s SUI wage base and unemployment benefits are indexed to the state’s average annual wage, which increased by nearly $2,000 in 2012.

Get more legislative updates for Washington employers here.

Here is the most current available UI data for Washington:

  • Unemployment rate (as of July 2013): 6.9%
  • Estimated rate of UI improper payments (via DOL): 11.67%
  • Taxable wage base in 2013: $39,800
  • State UI Trust Fund Balance (as of July 2013): $2,718,263,000
  • Minimum weekly benefit: $143
  • Maximum weekly benefit: $604
  • Minimum tax rate: 0.17%
  • Maximum tax rate: 5.84%
  • Employer assessment provision: No
  • FUTA reduction: No

(Sources: ETS Blog, Washington Employment Security Department, U.S. Department of Labor, SUCAP Reports, NASWA, Congressional Research Service.)

Get this two-page tipsheet outlining ETS’ best practices for employers in light of UI Integrity legislation in 2013 that raises the bar on employer response to agency requests for unemployment claims detail.

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.
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