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Unemployment Trust Fund and Related Issues

This report provides an overview of the unemployment trust fund, including benefit information, trust fund data, solvency, and recent legislation enacted during the 2014 session.

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Unemployment Trust Fund and Related Issues

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  1. Status of the Unemployment Trust Fund and Related Issues Commission on Unemployment Compensation Sam Lupica, Acting Commissioner August 14, 2014

  2. Basic Benefit Information • Purpose • Min/Max Amount • $60 • $378 • Min/Max Duration • 12 weeks • 26 weeks • Qualification • Eligibility • Effective July 6, 2014, minimum earnings requirement increased from $2,700 to $3,000; and minimum weekly benefit amount increased from $54 to $60.

  3. Trust Fund Data—Standard Forecast (Millions of Dollars) December 31, 2013 and 2014, balances include $1.2 million and $0.5 million, respectively, from FUTA Credit Reduction paid to IRS.

  4. June 30 Trust Fund Balances and Solvency Millions Trust Fund Solvency shown as a percent (%)

  5. Average Total State Tax Average State Tax Cost per Employee Calendar Year

  6. Pool Taxes Cost per Employee Calendar Year

  7. Distribution of 2014 Base Tax Rates(excluding 0.22% pool tax and 0.20% fund builder tax)Computed and Assigned Rates

  8. Claims Filed *Annual claims projected to be 231,000.

  9. Virginia’s Unemployment Rates2012 - 2014 (year to date) (not seasonally adjusted) Percent of Labor Force

  10. UI Initial Claims2012 - 2014 (year to date) • Total initial claims through June this year are down 16.7% because of fewer layoffs in manufacturing, administrative and support services, construction, and accommodations and food services. • October 2013 increase includes initial claims from partial federal government shutdown.

  11. UI Final Payments2012 - 2014 (year to date) • For the first six months of 2014, final payments are down 13.6% from 2013 and 23.9% from 2012. • The exhaustion rate in June was 46.3%, down from last June’s 47.9%.

  12. Exhaustion Rates2012 - 2014 (year to date) Exhaustion Rate

  13. Fourth Circuit States

  14. Implementation of Legislation Enacted During 2014 Session • SB110 Short-Time Compensation creates § 60.2-700 thru 710 Establishes a short-time compensation program that provides employers with the option of reducing the hours worked by employees, while permitting the employees whose hours are reduced to receive partial compensation for lost wages • Effective January 1, 2015 • U.S. Department of Labor is reviewing the Virginia Short-Time Compensation Program for compliance with funding eligibility criteria outlined in the Unemployment Insurance Program Letter number 27-12 • Marketing of the program will be conducted through VEC’s Employer Conferences and electronic messaging via the Virginia Workforce Connection

  15. Implementation of Legislation Enacted During 2014 Session • SB18 Military Trailing Spouse amends § 60.2-618(1) and §60.2-528(c)(9) Provides that good cause for leaving employment exists if an employee voluntarily leaves a job to accompany the employee's spouse, who is on active duty in the military or naval services of the United States • Since the effective date of July 6, 2014, there have been twelve claims filed under trailing spouse • Administrative Law and UI Division have provided appropriate guidance to all adjudicators • Relief of Benefit Charges: Benefit charges are assigned to pool, rather than charged to individual employers of military trailing spouses

  16. Implementation of Legislation Enacted During 2014 Session • HB22 Benefit Ratio amends § 60.2-530 Provides that an employer's payroll, for purposes of calculating its benefit ratio and state unemployment tax rate, shall be deemed to be $1 when the employer's taxable payroll for the applicable 12-month period is not more than $1 • The technical change required for calculating the state unemployment tax rate and benefit ratio has been made

  17. Implementation of Legislation Enacted During 2014 Session • HB389 Voluntary Separation amends § 60.2-618 Establishes a rebuttable presumption that an individual left work voluntarily if the individual was a graduate student whose employment commenced and ended between spring and fall semesters of his academic program and he returned to his academic program following his separation from employment • Administrative Law and UI Division have provided appropriate guidance to all adjudicators

  18. Implementation of Legislation Enacted During 2014 Session • SB266 Financial Literacy § 60.2-401 • Financial Literacy information has been posted to the VEC’s homepage and included in the PIN letters claimants receive

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