Overview of Unemployment Insurance Neil Gorrell Deputy Director

1. Overview of Unemployment Insurance Neil Gorrell Deputy Director Unemployment Insurance Division May 17, 2011

2. Today’s presentation • Introduction • Employment Security overview • Unemployment benefits • Unemployment taxes

3. Unemployment benefits Filing a claim • Initial claims filed: • By phone or Internet • By mail for Emergency Unemployment Compensation (EUC) and Extended Benefit (EB) claims • Approved claimants file every week to continue receiving benefits. • Decisions can be appealed.

4. Unemployment benefits Benefit calculations • Based on amount of money earned in past year. • Weekly benefits • Minimum: $135 per week • Average: $360 per week • Maximum: $570 per week • Temporary Benefit Increase (EHB 1091) • Adds $25 to benefit checks for claims effective on or after March 6, 2011 and before November 6, 2011.

5. Unemployment benefits Currently, three types of benefits • Regular benefits: up to 26 weeks • 100% state-funded • Emergency unemployment compensation: up to an additional 53 weeks • 100% federally funded • 53 weeks, paid out in 4 tiers • Extended benefits: up to an additional 20 weeks • Federally funded through 2011

6. Unemployment benefits Cut Off Dates: • December 31, 2011 • Last date EUC claimants can exhaust their current tier of benefits to be eligible for the next tier • December 24, 2011 • Last date for UI claimants to exhaust regular benefits and establish Tier 1 EUC • June 9, 2012 • Final cutoff for EUC Payments

7. Unemployment benefits $10.4 billion paid since July 2008* 54% state funds, 46% federal *As of April 30, 2011

8. Benefit Eligibility Initial eligibility • A claimant must: • Have worked at least 680 hours in ‘base year.’ • Be unemployed through no fault of his/her own. • Be able to work. • Be available to immediately accept suitable work. • Be actively seeking work.

9. Benefit Eligibility Maintaining eligibility • A claimant must: • Make at least three documented job searches each week, or • Participate in WorkSource job-search activities such as résumé writing and interviewing skills. • Immediately accept a suitable job offer.

10. Benefit Eligibility Suitable Work • Determined on a case-by-case basis. • Claimants are only obligated to accept work that is in-line with their training and experience. • Claimants do not have to accept work that: • Is unreasonably dangerous; • Offends the claimant’s religious beliefs or moral conscience; • That the claimant cannot physically do; and • Others.

11. Benefit Eligibility “Voluntary Quits” • There are only 12 limited circumstances that allow employees to voluntarily quit their jobs and still receive UI benefits. • 12 reasons are all set by the Legislature. • Each case is investigated individually by qualified specialists who gather information from both the employer and the employee.

12. Voluntary Quits • A bona fide offer of work; • Illness or disability of the claimant or his or her family; • To relocate for the spouse's employment that is due to an employer-initiated mandatory transfer; • Domestic violence; • If the employer reduced the usual pay by 25 percent or more; • If the employer reduced the usual hours of work by 25 percent or more;

13. Voluntary Quits • If the employer changes the work site, increasing distance, etc.; • Deterioration of work site safety; • Illegal activities at the work site; • If the work changes and becomes work that violates religious convictions or sincere moral beliefs; • If the claimant quits to enter approved apprenticeship training; or • If the claimant works the full time and part time job simultaneously, and quits the part time job.

14. Discharge Discharging Employees • Employers have the right to create standards in the workplace and hold employees to them. • Employees may be discharged and still collect benefits. • Benefits can only be denied when the employee committed work-related misconduct or gross misconduct.

15. Unemployment taxes “Reimbursable” employers • Includes state government (state agencies), cities, counties, political sub-divisions and some non-profits. • No taxes paid into trust fund. • Benefits paid to laid-off workers are reimbursed dollar for dollar to the trust fund.

16. Misconduct To establish misconduct, an employer must show the employee had a willful or wanton disregard for the interests of the employer or co-workers such as: • Dishonestly related to employment • Repeated and inexcusable absences Gross Misconduct • Conviction of a crime connected to the job • Flagrant and wanton disregard of the interests of the employer or co-workers

17. Appeals Appeals • Interested parties have a legal right to an appeal. • Appeals are adjudicated by the Office of Administrative Hearings, a separate and independent state agency. • An appeal letter must be in writing, signed by the party, and cannot be accepted over the phone or by e-mail. • Specific regulations and standards for timeliness apply.

18. Settlement Agreements Settlement Agreements • Settlement agreements cannot guarantee the granting or denial of benefits to an individual. • The agency is statutorily required to make determinations on benefit claims based on laws and rules. • Settlement agreements can be written so that parties agree “not to contest” the agency’s decision to grant or deny benefits.

19. Unemployment trust fund • Healthy trust fund • Washington has the healthiest trust fund in U.S. • As of April 29: $2.2 billion (14.2 months of benefits). • 36 states went bankrupt during this recession and have borrowed money to pay benefits. (29 still have outstanding loans) • More are expected to go bankrupt, with total borrowing of up to $41billion.

20. Virgin Islands $21 Outstanding Loans from the Federal Unemployment Account (in millions) Secured federal loans as of May 11, 2011 Completely repaid their loans as of May 11, 2011 Hawaii $0 (States with $0 balance previously had outstanding balances and may borrow again in the future.) $16 Source: US Department of Labor $17

21. Questions?