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HOW DOES UNEMPLOYMENT INSURANCE
DETERMINE WHICH EMPLOYERS ARE CHARGED FOR BENEFITS?
BY COLLEEN SCOW — revised October 31, 2005
When a claimant files for unemployment insurance benefits three types of decisions are made. The first two determine whether a claimant is eligible to receive benefits. The claimant must be determined eligible both monetarily and non-monetarily. Monetary eligibility is based upon the amount of money the claimant earned during the base period of their claim. (The base period is the first four of the last five completed calendar quarters at the time they file for benefits.) Non-monetary eligibility is based upon the reason the claimant left any employment in the previous 6 weeks. The claimant must continue to meet eligibility standards such as able, available and looking for work for each week that they wish to draw benefits.
The third type of decision determines whether an employer is chargeable for any benefits paid to a claimant. Charging decisions do not determine a claimant's eligibility. Charging decisions merely determine if an employer is individually chargeable, or if the charges revert to the Trust Fund and are socialized to all employers.
When a claimant receives benefits each employer who paid wages in the claimant's base period is potentially chargeable. Chargeability is based on the percentage of wages paid by each employer compared to the total wages paid by all employers in the claimant's base period. When a claimant is eligible and receives the first benefits payment, all experience rated employers in the base period will receive a Notice of Potential Benefit Charge Notice. Your response to this notice may determine whether your account is charged for benefits. If the reason the claimant no longer works for you is other than lack of work, it is important you return the notice within 10 days. On your response state the reason the claimant separated from your employment, being specific about the details of the separation.
When the notice of potential benefit charge is returned timely (within 10 days) the claim is reviewed. A claims examiner will issue a charging decision informing you if your account will be charged. If you disagree with the decision, follow the appeal instructions and request a redetermination. State specific reasons you think the determination is wrong. You must file your request for redetermination within 10 days of the date the determination was mailed.
There are three types of Unemployment Insurance employer accounts: experience-rated, reimbursable and governmental. These account types pay into the Trust Fund in distinct ways, likewise, they are charged differently for unemployment insurance benefits paid. Reimbursable and governmental account employers are charged for all benefits paid regardless of the reason the claimant left the employment. Charges are prorated according to the percentage of wages paid by the employer. Charges against reimbursable and governmental employers can be relieved only if the claimant is still working for the employer with no reduction of hours or wages. Experience-rated employers will not be charged if the claimant quit for personal reasons, was discharged for misconduct, is attending Department approved training, or is still working for the employer with no reduction of hours or wages.
Experience-rated and governmental employers will receive a statement of benefits paid about 20 days after the end of each calendar quarter. The statement lists the claimant's name, social security number, the date on which the claim became effective and the amount of benefits charged. Reimbursable employers are notified monthly of the benefits charged to their account. The charges may be paid monthly or within 30 days of the end of the quarter.
Employers who have questions about employer charging may contact the Unemployment Insurance Division, Benefits Bureau at (406) 444-3783.
