Data analysis from the Unemployment Claims Management team at Equifax suggests that employers should be paying close attention to the charge benefit statements being sent by state unemployment agencies. In a number of cases, the relief of benefits provided in the Coronavirus Aid, Relief, and Economic Security (CARES) Act may not be accurately reflected in the statements being sent out.
In most states, charge benefits statements are delivered quarterly to employers and itemize the unemployment claims and related charges against the State Unemployment Insurance (SUI) funds. SUI programs are generally funded by employers through quarterly taxes, which fund the ability to offer short-term benefits to employees who have lost or left a job for various reasons.
The charge benefit statements provide both an update on the amount an employer has been charged for separated employees drawing off the fund and an estimate of the SUI taxes an employer must pay to replenish the fund.
Higher Benefit Charge Line Items
“We’ve seen exponentially higher benefit charge line items and quarterly amounts, as a result of the pandemic unemployment activity,” comments Steven Solovic, Vice President of Unemployment Claims and Tax Management. “In conversations with state agencies, many have shared that there are likely errors contained in these charge statements, as they work to relieve employers of COVID-related charges or remove charges stemming from fraudulent unemployment claims from the statements.”
SUI tax rates are specific to each state, and each business and can vary over time. They are based on the “wage base” set by each state, along with the number of former employees who have filed for unemployment benefits in the past. Charge benefit statements that are incorrect mean an employer tax rate may be set higher than necessary. In fact, in 2019, the Equifax team conducting benefit charge audits on behalf of employers uncovered nearly $200 million in refunds for employers.
Audit Your Statements!
The burden falls to the employer to carefully audit the charges on the statements and identify any mistakes. Errors on the statements, including charges for benefits that should be covered by emergency relief available through the CARES Act or various state initiatives, could affect the SUI tax rates assigned to employers over time.
Because of the complexities and despite the occasional resubmission requests for COVID separations, employers may find that charge statements are incorrect and need to request corrections to realize the COVID relief of charges.
The CARES Act provided, and funded, among other things:
- An additional $600 in weekly unemployment benefits to unemployed workers through July 25
- Pandemic Emergency Unemployment Compensation (PEUC), which provides an additional 13 weeks of payments for employees who exhaust the available UI benefits
Individual states are also working to help employers manage their COVID-related SUI obligations. In California, Assembly Bill 103 notes that “for benefits paid between January 27, 2020, and December 26, 2020, all COVID-19-related charges will be removed from your reserve account, minimizing the impact to your experience rating, unless you or your agent were at fault.”
Be on the Look Out …
The Equifax team suggests that employers audit their statements carefully for the next several months:
- Know how each state you do business in is treating charges incurred due to claims filed as a result of a COVID-related shutdown or issue.
- Compare benefit charge line items with claims you’ve received and responded to. Many state UI agencies are still working through claim backlogs from Q2 and Q3. If you didn’t receive a claim but are being charged for benefits, you may choose to appeal those charges.
- If you protest any charges, be patient. State UI agencies are still operating in an environment with highly elevated volumes, so it may take weeks or months for them to review and adjudicate any charge protests.
Making time to self-audit or outsource your unemployment claims management is an important tool in helping employers manage SUI charges. Each state has different instructions for appealing or requesting a correction to a statement of charges, but almost all have a time frame to do so. In several states, employers must review and file an appeal or reply with a request for relief within 30 days of the date on the statement.
Kristi Kovalak has more than 20 years of experience in technology marketing and communications, with a specific focus on user experience and insights. She is responsible for helping guide the strategic messaging and go-to-market strategies for the suites of services at Equifax Workforce Solutions. Kovalak has worked for both business-to-business and business-to-consumer companies, including support for HR teams at Compaq (now HP), Altisource, AT&T, and Walt Disney World.