Unemployment Insurance System

1. Unemployment InsuranceSystem Our Nations Safety Net For Economic Stability Barbara Ramsey, UI Director Pete Shipman, Asst. Director, Benefits Renae Tidwell, Asst. Director Tax Oklahoma Employment Security Commission

2. August 14, 1935

3. 1935, Social Security Administration 3 Frances Perkins - Secretary of Labor for President Franklin D. Roosevelt The first woman to hold a Cabinet post Chaired the Committee on Economic Security (CES) In 1935, the CES created the Social Security Act which created the federal-state unemployment compensation (UC) program

4. Federal/State Partnership 4 • Based on federal law, administered by state employees under state law • Federal laws provide framework for state programs • On behalf of states, the U.S. Department of Labor (USDOL): • Ensures conformity and compliance with federal law • Provides administrative funding • Monitors state’s performance and provides technical assistance • Holds and invests monies in trust funds

5. Conformity 5 • If states meet minimum federal requirements they are considered to be in conformity with federal law and may receive: • Up to 5.4% basic and additional tax credits • Federal grants • Administrative funding

6. Changes Over the Years 75th Anniversary in 2010 In the 75 years since it inception, the Unemployment Insurance program has undergone a number of changes. The duration of regular state Unemployment Insurance benefit has increased from 16 weeks to the current maximum of 26 weeks in most states. Disqualification provisions have also changed – in the early years, states did not disqualify individuals for quitting work, being fired for misconduct, or refusing suitable work – they were simply held ineligible for a certain period of time. By the end of 1945, 26 states had imposed harsher disqualification provisions, and today all states have them.

7. Administration of UI Program • FUTA Tax is distributed to states to administer the UI program • Based on UI Claim load • Active Registered Employers • 100% of Unemployment tax paid by employers is deposited into the UI Trust Fund to pay benefits to claimants

8. UI Performance Measures "UI Performs" is the unemployment insurance program's performance management system. The goal of UI Performs is cooperative management, planning and oversight leading to increasingly effective, consistent, efficient service to workers and employers. UI operations are comprised of benefit eligibility determinations, payments or denials, an accessible appeals system, employer wage reporting and tax collection, and trust fund management. The UI Performs system of oversight includes two performance tracking categories. The first category is Core Measures, which encompasses oversight on key performance areas representative of the health of the entire unemployment insurance system. The Core Measures monitor key activities which have uniform national Acceptable Levels of Performance (ALPs). In the second category, the federal partner also maintains Management Information data to facilitate analysis of performance and to assist in planning corrective activities when necessary. Management Information tracks state performance on subsets of Core Measures and on ancillary activities such as interstate and federal programs.

9. UI Performs Core Measures Benefit Measures First Payment Promptness: 87% of all 1st payments made within 14/21 days after the week ending date of the first compensable week in the benefit year Nonmonetary Determination Time Lapse: 80% of Nonmonetary Determinations made within 21 days of the date of detection of any nonmonetary issue that had the potential to affect the claimant’s benefit rights Nonmonetary Determination quality –Nonseparation and separations: 75% of cases pulled for review in Benefit Quality Control (BTQ) quarterly samples must score equal to or greater than 95 points, based on the evaluation results of the review.

10. UI Technical SupportJim Polly, Chief17 staff • UI “Help Desk” • Training for all UI benefits employees • Design and implement new systems • Non-Monetary decision quality and timeliness (PMR) • UI Support (process all incoming documents) • Mass claims

11. Benefits AdministrationJohn Scott, Chief • Combined Wage claims • TRA, DUA, UCX And UCFE (and other Federal Programs) • Direct Deposit (EFT) and Debit Cards • Resolve Interstate issues • Respond to subpoenas

12. Benefit Payment ControlTerry McHale, Chief • Investigate fraudulent claimant activity • Establish fraud overpayments • Collect overpayments from claimants • Garnish wages (as last resort) • Tax Warrant Intercept • New Hire and wage crossmatch

13. UI Field OperationsJim Polly, Chief • Provide in-person assistance in Local Offices throughout the state • Provide assistance via phones in local area when Service Center lines are busy • Provide UI information in Rapid Response meetings

14. Claims AdjudicationGwen Harton, Chief • Scheduling and completion of majority of non-monetary decisions throughout the state • Responsible for meeting and exceeding quality standards • Responsible for giving all parties due process in the adjudication process • Responsible for timely completion of decisions • Pre-assignment adjudicators

15. UI Service Centers • Two UI Service Centers • Tulsa: Annette Cornelius, Chief • Oklahoma City: Sandra Oliver, Chief • Customer complaints (employers and claimants) • Works closely with UI Technical Unit • Establish UI Claims • Fact Finding

16. Tax EnforcementRon Selby, Chief • Audit employer accounts to insure proper tax payments • Determine employer-employee relationship • Assist In SUTA dumping detection • Investigate wage objections • Perform status investigations • Deal with delinquent employer accounts

17. Employer ComplianceKathleen McClure, Chief • Determine employer liability • Determine benefit wage charges • Determine employer tax rates • Process quarterly tax payments and wage reports • Deal with delinquent employer accounts and file tax warrants • Assist employers with correct filing and reporting

18. In December 2010, Congress passed the Tax Relief, Unemployment Insurance Reauthorization, and Job Creation Act of 2010 (P.L. 111-312), which among other things extended the EUC08 Federal Benefits for the eight time. The EUC08 Extended Federal Benefit program gave states that qualified based on their unemployment rate extended benefits in Tier 1, Tier 2, Tier 3, Tier 4 and some states passed legislation that paid a combination of state and federal benefits as EB extended benefits. • Oklahoma reached a 6% unemployment rate by July 2009 triggering on the Tier 3 Extended Benefits. Oklahoma claimants could qualify for up to 73 weeks of UI and Federal Extended Benefits.

19. Claimants in high unemployment rate states could qualify for up to 4 Tiers and State/Federal EB of Unemployment Benefits. • In February 2012 Congress passed new legislation that changed the criteria for EUC and put new requirements on all EUC claimants. • Effective June 1st2012 • Tier 1 same • Tier 2 6% unemployment rate • Tier 3 7.5% unemployment rate • Tier 4 8.5% unemployment rate • All EUC Claimants are required to be pulled for REA and provide work search activities

21. Unemployment Insurance Claim Statistics Oklahoma 2011 • Initial claims for UI benefits made to the Oklahoma Employment Security Commission (OESC) in 2011: 170,802 • Initial claims made to the OESC that were protested in 2011: 60,313 • Due to voluntary quit: 15,401 • Decisions to allow benefits (in favor of claimants): 1,897 • Decisions to deny benefits (in favor of employers): 13,504 • Claimants: 12.3% • Employers: 87.7% • Due to discharge for misconduct: 44,912 • Decisions to allow benefits (in favor of claimants): 27,108 • Decisions to deny benefits (in favor of employers): 17,804 • Claimants: 60.4% • Employers: 39.6% *An initial claim for unemployment benefits is made by the claimant submitting information about the claimant’s separation from employment through the OESC Internet claims process or by telephone to a claims taker in the OESC call center.

22. UI Performance Measures 2011 for Non-Mons For 2011: 62,249 separation determinations were issued. 44,934 were issued within 21 days. 72.2%. 35,807 non-separation determinations 31,295 were timely 87.4%. Total for the year 98,056 determinations 76,229 were timely This is 77.7%, below the 80% required by the feds, but much higher than the 68% we recorded for 2010.  

23. The recession that started in 2008 put the UI System to the test!! For the first time in the history of the UI Program the USDOL passed four federal extensions of UI Benefits. And some states has State/Federal Extended Benefits on top of the four extensions. By July 2009, 39 states were broke in their regular UI Trust Funds borrowing from US DOL to the tune of $42 Billion dollars. • States that borrowed to pay regular unemployment benefits not only had to raise employer state unemployment tax rates but will lose a percentage of the 5.4% FUTA • Credit to repay the loans.

24. Bankrupt states

27. Today’s economic challenges—historic challenges by many measures – require us to persevere and rededicate ourselves. Our nation’s workforce and reemployment system provides vital linkages between workers, employers and other economic stakeholders. Now more than at any time in recent history, we need to put that system to work in the most efficient way possible to maximize our efforts and get America (especially claimants) back to work. • Concurrent Sessions: • SUPERSESSION—Reemploying UI Claimants through an Integrated/Interconnected Workforce System A CALL TO INNOVATE!! • Getting UI Claimants back to work – A spotlight on the REA program • Tools and Technology – Making reemployment happen • Secretary of Labor, Hilda L Solis Vision – “Good Jobs for Everyone”!

28. UIPL 19-11 A call to action for states to join DOL in bringing down the UI improper payment rate by focusing on prevention. UI improper payment rate for 2010 is 11.2%, which is above the rate set forth by IPERA of 10%.(10.6% overpayment rate and .6% underpayment rate). Main causes of overpayments are Benefit Year Earnings (BYE), Separation, Work Search, and Employment Services (ES) Registration.

29. Story on Yahoo! Finance Monday July 9, 2012 Government overpaid $14 billion in unemployment benefits Don't spend that unemployment check too fast. The government might ask you to pay it back. Overpayments are a rampant problem in the unemployment insurance system. The federal government and states overpaid an estimated $14 billion in benefits in fiscal 2011, or roughly 11% of all the jobless benefits paid out, according to reports from the U.S. Labor Department. Now, the U.S. Department of Labor and the states are in the midst of a massive effort to try to recoup some of their lost funds and avoid future overpayments.

30. US Overpayments by Cause - FY2010 Separation Issues $1,385,523,642 19.5% Benefit Year Earnings $2,094,269,508 Work Search Issues 29.5% $1,286,707,519 18.2% JS Reg. $788,343,823 11.1% Dependents Allow. $38,674,704 Able+Available 0.5% Base Period Wage Iss. $382,738,451 Other Issues $380,247,470 5.4% $294,292,567 5.4% Sev./Vac./SSI/Pension 4.2% $163,394,550 2.3% Oth. Elig. Iss. $273,182,985 3.9%

31. Strategies for Reducing Overpayments Targeting for Prevention: BYE, Separation, & ES registration States form UI Cross-Functional Integrity Taskforces to address integrity issues Mandatory use of the National Directory of New Hires (NDNH) and Automated Claimant Notification (Oklahoma implemented in 1999) Claimant Messaging Implement State Information Data Exchange System (SIDES)

32. What’s New: Benefits Development of new online claimant portal Exploring new model of all UI Claims filed online Development of new application for Benefit Payment Control Unit/Overpayment system Reintegration ES/UI

33. What’s NewTAX Division • OESC Employer Portal Information • To better serve Oklahoma, the OESC has developed an Internet Portal –Ez Tax Express-to enable employers to perform many of the functions via the Internet which were previously completed on paper. • 1st quarter 2012 76% of employers filed online and 46% paid by EFT.