North Carolina Department of Commerce Division of Employment Security

Transcription

1 Nrth Carlina Department f Cmmerce Divisin f Emplyment Security Pat McCrry, Gvernr Sharn Allred Decker, Secretary Dale R. Flwell, Assistant Secretary May 20, 2013 TO: FROM: SUBJECT: Nrth Carlina Emplyers, Gvernmental Organizatins and Nn-Prfits Dale R. Flwell, Assistant Secretary Changes t Unemplyment Insurance Law-Huse Bill 4 Highlights On February 19, 2013, Huse Bill 4 was signed int law. This bill, which will take effect n June 30, 2013, made significant changes t the Nrth Carlina Emplyment Security Law. This mem explains the changes that will affect emplyers, gvernmental rganizatins and nnprfits. I hpe that yu will find it useful as yu prepare fr any mdificatins yur rganizatin will require as a result f the new law. The staff f the Divisin f Emplyment Security is ready t assist yu in understanding the new law. If yu have any questins abut the changes t the unemplyment insurance laws, a temprary accunt with DES has been set up fr yur use in submitting thse questins t us: HB4questins@nccmmerce.cm Please cntact us if yu have questins that ccur t yu after yu review the mem. Pst Office Bx Raleigh, NC (919)

2 Significant Changes t Chapter 96 Emplyment Security Law Sessin Law (Huse Bill 4) The fllwing prvisins regarding unemplyment insurance (UI) benefits take effect with the week beginning Sunday, June 30, Attached Claims fr Benefits: Emplyers with a negative balance are required t bring the balance up t zer befre an attached claim is submitted. Emplyers are required t prepay the full amunt f unemplyment benefits payable t the emplyee befre the claims are prcessed. Payments must be received and cleared prir t benefits being disbursed t the claimant. Emplyers will have 14 calendar days t prepay estimated benefits after claim request is made. Funds cllected frm emplyers will be psted directly t a special accunt fr prepayment. Emplyers may nly file ne attached claim per emplyee per benefit year. The perid f attached unemplyment fr which the claim is filed may nt exceed six cnsecutive weeks. Emplyers will be reimbursed fr unused prepaid amunts by calculating prepaid amunts minus benefits actually paid. Waiting Week A waiting week is nw required fr each claim filed during a benefit year. An individual currently serves ne waiting week per benefit year. Benefit Changes: The maximum weekly benefit amunt fr new claims effective n r after June 30, 2013, is $ The current maximum weekly benefit amunt is $ The maximum earnings allwance fr any claim effective n r after June 30, 2013 is $ The maximum duratin fr unemplyment benefits is reduced frm 26 weeks t 20 weeks. The duratin will be tied t the seasnally adjusted unemplyment rate. The lwer the state s unemplyment rate, the lwer the duratin fr unemplyment benefits. Reduced Wrk Hurs An individual may qualify fr benefits if he leaves wrk slely due t the individual s wrk hurs having been reduced mre than 50% as part f a unilateral and permanent reductin in wrk hurs. Currently, a reductin f 20% is needed t qualify. Suitable Wrk After the 10 th week f a benefit perid, any emplyment ffer paying 120% f the individual s weekly benefit amunt is cnsidered suitable wrk. 2 Divisin f Emplyment Security, NC Department f Cmmerce

3 Gd Cause fr Leaving Wrk The law eliminates all but tw f the specific reasns fr which an individual culd quit wrk and still qualify fr UI benefits. Thse tw reasns are dmestic vilence and military spuse relcatin. An emplyer s accunt is nt charged in these circumstances. Any individual may qualify fr benefits if he can prve he left wrk fr gd cause attributable t the emplyer. Quarterly Filing f NCUI 101 Emplyers with 25 r mre emplyees (including their payrll services) are required t file quarterly reprts in a frmat prescribed by the Divisin f Emplyment Security (DES). This frmat des nt include paper. Penalties will be assessed fr nn-cmpliance. Severance Pay Severance pay is treated in the same manner as ther separatin pay. Severance pay is n lnger waived due t an individual s schl attendance. Changes t the 500AB Emplyers will have 14 days t return a cmpleted Request fr Separatin Infrmatin frm Emplyer frm (NCUI 500AB) t the Divisin. Claimants will nt start receiving benefits until the NCUI 500AB is returned r the 14 days expires. Effective Octber 21, 2013: N Relief f Benefit Charges fr errrs resulting frm nn-cmpliance If an emplyer r the emplyer s agent has a pattern f failing t respnd timely r adequately t any written request fr separatin infrmatin, such as the NCUI 500AB, the emplyer s accunt may nt be relieved f charges fr benefits errneusly paid t the individual. T determine if a respnse is adequate, DES will cnsider what infrmatin was specifically requested and whether the respnse is sufficient t satisfy the request. In additin t cmpleting all apprpriate areas f the Request fr Separatin Infrmatin frm Emplyer frm (NCUI 500AB), an emplyer shuld prvide cpies f warnings, plicies, handbks, dcuments r ther infrmatin related t the claim. In shrt, adequate respnses prvide sufficient facts t enable DES t make a crrect determinatin under the law withut having t cntact the emplyer t btain any additinal infrmatin. The separatin infrmatin must als be received timely. A pattern f failing t respnd timely r adequately t requests fr infrmatin frm the Divisin relating t claims may be determined if the number f untimely/inadequate respnses is 2 r mre r equal t r greater than 2% f the ttal requests sent t the emplyer during the prir year, whichever is less. Infrmatin fr Gvernmental Reimbursable Accunts Beginning with new law changes effective June 30, 2013, all gvernmental reimbursable accunts will be required t maintain an accunt balance reserve f 1% f annual reprted taxable wages. Agencies will make fur quarterly payments in rder t build their reserves. Existing agencies will have a transitin perid in fiscal year 2013/2014 prviding fr them t build their reserves and t als reimburse DES fr any benefit charges t their accunts. The transitin perid is indicated belw: 3 Divisin f Emplyment Security, NC Department f Cmmerce

4 Payment f 1% tax with quarterly reprts: under the new law all existing agencies will make a 1% payment n taxable wages with their quarterly wage reprts fr 3Q2013 (due 10/31/13), 4Q2013 (due 1/31/14), 1Q2014 (due 4/30/14) and 2Q2014 (due 7/31/14). Taxable wages are determined n a calendar year basis. Histrically, a majrity f rganizatins reprt mst f their taxable wages during the 1 st and 2 nd quarters f each year. The example belw demnstrates hw taxable and excess (nntaxable) wages are cmputed. Example (fr illustratin purpses nly): An emplyer reprts ne emplyee wh earns $10,000 per quarter. The taxable wage base fr this illustratin is the 2013 wage base f $20,900. 1st 2nd 3rd 4th Wages Paid Subject t the Law $10,000 $10,000 $10,000 $10,000 - Excess Wages (nn-taxable wages) 0 0 $ 9,100 $10,000 = Wages Subject t Tax $10,000 $10,000 $ Payment f benefit charges: In 2013, benefit charges will be sent t agencies as they have traditinally been sent under the current law. The statute requires that annual charges be billed by 1/1/14 but histrically, annual charges are billed smetime during the mnth f Nvember. NOTE: The due date will be 30 days after the billing date rather than the 60 days allwed under current law. Annual recnciliatin f accunts beginning in 2014: There will be an annual recnciliatin f each reimbursable accunt beginning in the fall f Annual benefit charges will be applied t the accunt and the emplyer will be billed fr an amunt which will bring its accunt balance t 1% f the mst recent fiscal year s taxable wages. If an accunt has a balance in excess f the required 1%, the credit balance will be retained in the accunt and n refunds will be issued. 120% reimbursable accunts are being eliminated. Gvernmental accunts that have nncharging rights and reimburse benefit charges at 120% will be deactivated effective 6/30/13 and new UI tax accunt numbers will be issued t these agencies effective 7/1/13. These newly issued accunts will be 100% reimbursable accunts and will nt be eligible t receive nn-charging f benefits fr any claims filed with benefit year beginning date n r after 6/30/13. The quarterly 1% tax payments required t be submitted beginning with the 3Q2013 reprt filing, will be submitted under these new accunt numbers (quarterly taxes will nt be submitted under the ld 120% reimbursable accunt numbers). Benefit charges fr claims filed under the ld accunt number will cntinue t be billed t the ld accunt n an annual basis at 120%. Any claims that were filed under this accunt will still be eligible t receive nn-charging f benefits. The annual recnciliatin prcess beginning in fall 2014 will be n the newly issued 100% reimbursable accunts and nt n the deactivated 120% accunts. The deactivated 120% will be respnsible fr benefit charges but they will nt have any reserve requirements. 4 Divisin f Emplyment Security, NC Department f Cmmerce

5 All newly issued gvernmental reimbursable accunts must als maintain an accunt balance f 1% annual taxable wages and shuld cntact DES fr any guidance needed in meeting thse requirements. Apprximate Schedule fr Implementing Changes: July 2013 New accunt numbers are assigned t agencies which currently have 120% reimbursable accunts Octber 2013 Nvember 2013 December 2013 January 2014 April 2014 July 2014 Nvember 2014 December 2014 First 1% tax payment due based n 3Q2013 taxable wages Annual claims reimbursement bills mailed ut Annual claims payments due Secnd 1% tax payment due based n 4Q2013 taxable wages Third 1% tax payment due based n 1Q2014 taxable wages Furth 1% tax payment due based n 2Q2014 taxable wages 2014 annual recnciliatin f accunts and billings are mailed t emplyers 2014 annual recnciliatin payment due Infrmatin fr Nnprfit [501(c)(3)] Organizatins Reimbursable Accunts After July 1, 2013, a nnprfit rganizatin will nt be able t secure its electin t reimburse by psting a surety bnd r a line f credit. A bnd r letter f credit that is currently in effect will be allwed t stay in effect until its expiratin date. After the expiratin date, a nnprfit reimbursable accunt will be required t maintain an accunt balance reserve f 1% f reprted yearly taxable wages. Emplyers will make fur quarterly payments in rder t build their reserves. Emplyers with bnds r letters f credit that expire 12/31/2013 will be required t submit payments equal t 1% f taxable wages with their quarterly reprts fr 1Q2014 (due 4/30/14), 2Q2014 (due 7/31/14), 3Q2014 (due 10/31/14) and 4Q2014 (due 1/31/15). Emplyers with bnds r letters f credit that expire 12/31/2014 will be required t submit payments equal t 1% f taxable wages with their quarterly reprts fr 1Q2015 (due 4/30/15), 2Q2015 (due 7/31/15), 3Q2015 (due 10/31/15) and 4Q2015 (due 1/31/16). Annual Recnciliatin f Accunts fr Emplyers with Bnds r Letters f Credit: Emplyers with bnds expiring in 2013: Since the emplyer will nt have yet met its bligatin t submit fur quarterly reserve payments in 2014, at that year s recnciliatin it will be billed fr the lesser f benefit charges r its negative accunt balance. Fr the annual recnciliatin in 2015, the emplyer will be billed the amunt necessary t bring its accunt balance t 1% f the previus fiscal year taxable wages after benefit charges are applied t its accunt. 5 Divisin f Emplyment Security, NC Department f Cmmerce

6 Emplyers with bnds expiring in 2014: Since the emplyer will nt have yet met its bligatin t submit fur quarterly reserve payments in 2015, at that year s recnciliatin it will nly be billed fr the lesser f benefit charges r its negative accunt balance. Fr the annual recnciliatin in 2016, the emplyer will be billed the amunt necessary t bring its accunt balance t 1% f the previus fiscal year taxable wages after benefit charges are applied t its accunt. Nte: Effective with the 2013 annual recnciliatin bills, the due date will be 30 days after the billing date rather than the 60 days allwed under current law. This law change applies t all reimbursable accunts. Under the new law all new reimbursable accunts will be required t submit quarterly payments f 1% f taxable wages during the first fur quarters fllwing an electin t be a reimbursable emplyer. A temprary address has been set up fr additinal questins related t Sessin Law (Huse Bill 4). Please direct yur questins t: HB4questins@nccmmerce.cm 6 Divisin f Emplyment Security, NC Department f Cmmerce