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May 2021

Aura and Thomas & Company Collaborate to Fight Unemployment Fraud

Original article posted by PR Newswire.

New security alert system stops fraudulent payments before they are made and protects businesses, individuals

BURLINGTON, Mass. and NASHVILLE, Tenn.May 27, 2021 /PRNewswire/ — Aura, a leading provider of digital security solutions for consumers, and Thomas & Company, the nation’s largest privately held unemployment cost management provider, today announced that they have joined efforts to provide companies and their employees with a first-of-its-kind alert system to quickly detect, notify and resolve unemployment fraud. This innovative solution will proactively monitor and alert employers and individuals to new unemployment claims, providing an opportunity to report fraudulent claims and prevent improper payment of benefits, as well as other potential harm resulting from identity theft.

Since the start of the pandemic, criminals have exploited record unemployment rates by using individuals’ stolen personally identifiable information to file fraudulent unemployment claims, and the problem is far from over. According to the Federal Trade Commission1, in the first quarter of 2021, identity theft grew more than 130 percent over the prior year driven by a dramatic increase in government benefits fraud, including unemployment fraud, which grew nearly 4,000 percent. To date, unemployment fraud has cost the U.S. more than $89 billion in improper payments2, according to the U.S. Department of Labor.

“The exponential growth of fraudulent unemployment claims is exacerbating the stress and financial burden that identity theft has on individuals,” said Gerry Baldwin, general manager, employee benefits, Aura. “By protecting individuals from experiencing identity theft—the root cause of this fraud— Aura’s alert system will reduce employees’ risk of financial impact and, through this joint effort, will help employers and employees save time and expenses of fraudulent unemployment claims.”

With Aura Identity Guard integrated into SHIELD, Thomas & Company’s Unemployment Cost Management Platform, individual employees will be alerted in near real-time when their social security number is used to file an unemployment claim. Upon receipt of the alert, the employee can verify whether they initiated the claim or flag the claim if it is fraudulent, empowering Thomas & Company to notify the state workforce agency and prevent improper payments from being disbursed. Further, a dedicated case manager will partner with each employee to ensure resolution of fraudulent claims and relieve employers of this administrative burden.

“We’ve seen first-hand the significant impact unemployment fraud has had on our clients and their employees,” said Jim Thomas, CEO, Thomas & Company. “Teaming with Aura will enable us to continue our decades-long commitment to protecting employee data and reducing administrative burden for employers, while increasing barriers to fraud and assisting state workforce agencies in their own efforts to reduce fraudulent unemployment benefit payments.”

Businesses can learn more about this innovative joint effort and how they can use this service to proactively combat fraudulent unemployment claims by visiting go.identityguard.com/Aura-ThomasCo.html and registering for a webinar with Aura and Thomas & Company, titled Addressing Unemployment Fraud: How to Protect Your Company and Employees, on Tuesday, June 8, 2021 at 11 AM ET.

For more information on Aura’s Employer solutions, visit benefits.aura.com and to learn about unemployment fraud, visit thomas-and-company.com/ui-fraud.

Consumer Sentinel Network Data Book 2020 (March 31, 2021)  
2 DOL-OIG Oversight of The Unemployment Insurance Program (March 31, 2021)

*Original article posted by PR Newswire

Link to full article.

Massachusetts Extends First Quarter Unemployment Contributions Deadline

The Massachusetts Department of Unemployment Assistance has extended the first quarter 2021 contribution deadline to Monday August 2, 2021.

On April 15, 2021, the Department extended the deadline from April 30, 2021 to Tuesday, June 1, 2021 in order to provide employers additional time due to significant rate increases for calendar year 2021.  Today, they decided to further extend this deadline to continue this courtesy to employers in the state.  This extension means that both first and second quarter 2021 contributions will now be due on the same day.

The Department is also considering legislation that may retroactively lower 2021 tax rates.  Once this decision is made and legislation is passed, additional information will be forthcoming.

As most are aware, Massachusetts employers experienced a significant unemployment tax increase in 2021, primarily due to the drastic increase in the Solvency Assessment, which is a major component in the rate calculation.  Although it has not yet been determined if Massachusetts employers will receive retroactive relief, we have already seen similar situations in six states that resulted in rate revisions.

As always, we will continue to monitor this situation and provide updates as they become available.  If there are any questions please do not hesitate to contact us or visit our website for the latest news and updates.

 

New Mexico Revises 2021 Unemployment Tax Rates

The New Mexico Department of Workforce Solutions announced yesterday that a review and recalculation of all New Mexico employers’ 2021 unemployment tax rates had been conducted under the provisions of the Small Business Recovery Act of 2020.  As a result of this review, revised 2021 tax rate notices are being mailed out to employers informing them of any changes.

The Department recalculated the tax rate for over 50,000 contributory employers to omit benefit charges, employer wages, and contributions for the period of March 1, 2020 through June 30, 2020.  As a result of the recalculation, roughly 9,000 employers had their tax rate for 2021 decrease when compared to the rate initially issued in November 2020.  However, roughly 2,000 employers received a tax rate increase and the remaining employers’ rates remained unchanged.

Part of this legislation and review has resulted in an extension in the first quarterly payment due date to May 31, 2021.  Employers who have already made their first quarter payment and received a notice that their tax rate decreased will receive a credit on their account, or may request a refund by logging into their employer account in the Unemployment insurance Tax & Claims System or by contacting the Unemployment Insurance Operations Center at 1-877-664-6984, 7:00 a.m. to 5:00 p.m. Monday through Friday.

Although this is exciting news for most New Mexico employers, the late notice of this review and extension of payment does little to provide immediate relief to employers as most have already submitted their payment for first quarter 2021.  Nevertheless, for those employers who receive a lower tax rate for 2021 will see an overall tax decrease for calendar year 2021.

As always, we will continue to monitor this situation and provide updates as they become available.  If there are any questions please do not hesitate to contact us or visit our website for the latest news and updates.

United States Department of Labor’s Unemployment Claims Report – Week Ending May 15, 2021

The Unemployment Insurance Weekly Claims report for the week ending May 15, 2021 has been released by the United States Department of Labor.

Week Ending 5/15 Prior Week
Seasonally adjusted initial claims: 444,000 473,000
4 week moving average: 504,750 534,000
Seasonally adjusted insured unemployment rate: 2.70 2.60%
Seasonally adjusted insured unemployment number: 3,751,000 3,655,000
4-week moving average: 3,581,000 3,665,000
Number of unadjusted claims: 454,634 487,436
Unadjusted insured unemployment rate: 2.60 2.70%
Unadjusted number claiming UI benefits: 3,684,082 3,709,566

The full news release report can be downloaded here.

As always, we will continue to monitor this situation and provide updates as they become available.  If there are any questions please do not hesitate to contact us or visit our website for the latest news and updates.

 

National Paid Family & Medical Leave Program Proposal in the U.S. Senate Committee Stage

The debate over a national paid leave mandate is beginning to take shape in a U.S. Senate committee hearing that took place on Tuesday, May 18, 2021. The main focus of the debate involved concern from Republicans relating to funding while Democrats predicting it would boost the economy and women’s workforce participation.

Congress is set to consider creating that federally-run paid family and medical leave program, as a part of the broader American Families Plan proposal. The paid family and medical leave component would let American workers take up to 12 weeks of paid leave for the birth or adoption of a child, the worker’s or a family member’s serious illness, and other reasons related to military service or domestic violence.

The White House estimates this would cost $225 billion over a decade—a price tag that’s held down by phasing in benefits so that the full 12 weeks only becomes available in the final year of that phase in period (year 10 since the inception of the program) and every year thereafter.

Tuesday’s hearing reaffirmed the challenge that bipartisan support to get a comprehensive paid leave mandate through the Senate will be difficult, as Republican members of the Health, Education, Labor and Pensions committee took turns questioning the wisdom of tax increases to pay for the program and the potential impact on small businesses. If bipartisan support doesn’t come, Democrats would have to try to pass a paid leave program through the Senate’s budget reconciliation rules with just 51 votes, a move that might limit their ability to include provisions such as job protections while workers take leave.

The alternative argument to the federally-run paid family and medical leave program proposal is that Congress should pursue other options for encouraging businesses to provide paid leave and flexibility to their workers, such as tax credits, and allowing employers to give workers the option between overtime pay and accumulating comp time.

Millions Left Workforce

Some believe that ensuring nationwide paid-leave access for all workers would strengthen the economy, in part by helping encourage a return to the workforce for the 2 million women who left it during the pandemic.

In a recent virtual meeting with Labor Secretary Marty Walsh on Monday, business executives and employees from Adobe Systems Inc., Danone SA, JP Morgan Chase & Co., and Levi Strauss & Co. shared their experiences with providing or making use of paid leave policies in their workplaces. This is a continued reflection that some U.S. businesses have shown a growing openness to a national paid leave policy, albeit one that depends on how the program is designed.

“The United States has been behind most of the world in supporting our workers,” Walsh said on the Monday call, noting the issue is personal to him as his family could have benefited from access to paid leave when he was diagnosed with cancer as a child. “Our families and our businesses are paying the cost for this inaction.”

Costs vs. Benefits

Vicki Shabo, a senior fellow on paid leave policy at the New America think tank, stated in Tuesday’s hearing that making paid family and medical leave available nationwide would boost the economy and improve the country’s competitiveness against global peers, who already provide some form of national paid leave.

A uniform national standard also would benefit large, multi-state employers that must navigate compliance with varying state laws, said Marianne McManus, a vice president of health and benefits at IBM who spoke on behalf of the American Benefits Council. This would make sense as there are currently nine states plus the District of Columbia who have enacted their own paid family and medical leave programs covering most private-sector workers, each with different standards, eligibility requirements, etc.

On the other hand, small, single-state businesses might suffer if they have to offer this new benefit to their employees where they haven’t had to previously while also enduring the responsibility on funding this new program, which is also unclear at this point.

Additionally, small businesses tend to offer flexible, ad-hoc time off arrangements for their employees but can’t afford or handle the administrative burdens of the same kind of paid leave policies that companies such as IBM offer, said Beth Milito, senior executive counsel for the National Federation of Independent Business.

The funding for this program is a huge question. Where will the money come from? Will there be a new payroll tax introduced and imposed on employers and/or employees to cover this new benefit? These questions have not yet been addressed publicly which leaves both sides of this issue hesitant to fully support or oppose the proposal.

Some Republican senators spoke against creating a new payroll tax—as the nine current state programs are funded. Given the uncertain future of the financially troubled Social Security and Medicare trust funds, which could require considering future payroll tax increases, adding yet another payroll tax to fund a federally-run paid family and medical leave program would be almost impossible to pass.

The FAMILY Act, a national paid leave proposal by Rep. Rosa DeLauro (D-Conn.) and Sen. Kirsten Gillibrand (D-N.Y.), calls for funding the program with a payroll tax of 0.4%, although an estimate from the Social Security Office of the Chief Actuary last year found the tax would need to be 0.62% to sustainably pay for the program.

As always, we will continue to monitor this situation and provide updates as they become available. If there are any questions please do not hesitate to contact us or visit our website for the latest news and updates.

 

Virginia Employment Commission Increasing Capacity in Response to Fraudulent Unemployment Claims

Governor Ralph Northam today directed the Virginia Employment Commission to invest $20 million to dramatically expand the agency’s ability to process complicated unemployment insurance claims. Executive Directive Sixteen requires the agency add 300 new adjudication staffers, make immediate technology upgrades, and complete a full modernization of the Commonwealth’s unemployment insurance system by October 1, 2021.

While Virginia ranks sixth in the nation for the timely payment of benefits to eligible applicants, the Governor’s action will speed up the resolution of cases flagged as potentially fraudulent or ineligible. These cases represent approximately four percent of all claims.

Executive Directive Sixteen directs the VEC to take three immediate actions to adjudicate claims faster:

• Set a clear goal for resolving UI claims. Governor Northam has directed the VEC to increase the number of adjudications being processed per week from 5,700 to 10,000 by June 30 and to 20,000 by July 31, 2021. This will be accomplished, in part, by finalizing a $5 million contract for over 300 additional adjudication officers. The VEC is also coordinating with the Virginia Department of Human Resource Management (DHRM) to identify employees across Virginia’s state agencies who can temporarily support this effort.

• Continue investment in Customer Contact Center. Since the onset of the pandemic, the VEC has quadrupled its customer service capacity to provide information and support to Virginians with questions about their claims. Governor Northam has directed the VEC to expedite an additional contract for services and staff to augment the current expansion.

• Modernize the benefits system. Historic claim volume during the COVID-19 pandemic had previously delayed the VEC’s progress in modernizing its 41-year-old benefits system. The agency has resumed the project, executing a contract for $5 million in state funding for technology upgrades. October 1, 2021 has been set as the target date for completing the final phase of the system. The VEC will be implementing additional technology upgrades for customer service in the coming weeks to increase capacity.

As always, we will continue to monitor this situation and provide updates as they become available. If there are any questions please do not hesitate to contact us or visit our website for the latest news and updates.

United States Department of Labor’s Unemployment Claims Report – Week Ending May 8, 2021

The Unemployment Insurance Weekly Claims report for the week ending May 8, 2021 has been released by the United States Department of Labor.

Week Ending 5/8 Prior Week
Seasonally adjusted initial claims: 473,000 498,000
4 week moving average: 534,000 560,000
Seasonally adjusted insured unemployment rate: 2.60% 2.60%
Seasonally adjusted insured unemployment number: 3,655,000 3,690,000
4-week moving average: 3,665,000 3,675,750
Number of unadjusted claims: 487,436 504,670
Unadjusted insured unemployment rate: 2.70% 2.70%
Unadjusted number claiming UI benefits: 3,709,566 3,786,096

The full news release report can be downloaded here.

As always, we will continue to monitor this situation and provide updates as they become available.  If there are any questions please do not hesitate to contact us or visit our website for the latest news and updates.

U.S. Treasury Issues Interim Final Rule Relating to Coronavirus Recovery Funds

The United States Treasury has issued an Interim Final Rule that addresses the use of Coronavirus Recovery Funds (“CRF”) provided to state and local governments under the American Rescue Plan Act (“ARPA”).  The rule would permit states to deposit those funds into the state unemployment trust funds to restore solvency.

The use of these funds for this purpose would serve two purposes: 1) eliminate outstanding Title XII debt in many states as well as 2) modify the status of trust fund balances that impact future tax rate schedules and solvency fees.

The timing of the deposit of these funds will be important.  Should the funds be deposited into the state trust funds before June 30, 2021, that could alter state UI tax rate calculations for calendar year 2022.  Additionally, if funds are deposited by September 6, 2021, states would potentially avoid paying interest on Title XII loan principal and even eliminate Title XII debt altogether, which would avoid potential FUTA tax increases that would otherwise trigger on, saving employers in those states a maximum of $21/employee in increased FUTA taxes for 2022.

A list of states with outstanding Title XII loans that might otherwise be subject to FUTA tax increases in 2022 can be found here.

As always, we will continue to monitor this situation and provide updates as they become available.  If there are any questions please do not hesitate to contact us or visit our website for the latest news and updates.

United States Department of Labor’s Unemployment Claims Report – Week Ending May 1, 2021

The Unemployment Insurance Weekly Claims report for the week ending May 1, 2021 has been released by the United States Department of Labor.

Week Ending 5/1 Prior Week
Seasonally adjusted initial claims: 498,000 553,000
4 week moving average: 560,000 611,750
Seasonally adjusted insured unemployment rate: 2.60% 2.60%
Seasonally adjusted insured unemployment number: 3,690,000 3,660,000
4-week moving average: 3,675,750 3,684,000
Number of unadjusted claims: 504,670 575,350
Unadjusted insured unemployment rate: 2.70% 2.70%
Unadjusted number claiming UI benefits: 3,786,096 3,790,527

The full news release report can be downloaded here.

As always, we will continue to monitor this situation and provide updates as they become available.  If there are any questions please do not hesitate to contact us or visit our website at www.thomas-and-company.com.

Connecticut Passes Legislation Lowering Unemployment Tax Rates Beginning in 2022

Connecticut’s unemployment tax rate calculations are being updated to reduce the impact of pandemic-related unemployment benefit claims under a measure signed May 3, 2021 by Governor Ned Lamont.

The measure (H.B. 5377) is effective starting with unemployment tax rates determined for 2022 and calls for unemployment benefits charged from July 1, 2019 to June 30, 2021 to be excluded from the calculation of tax rates for experience-rated employers.

Additionally, starting in 2022, the tax rate for new employers is to be calculated without regard to unemployment benefits charged in calendar years 2020 or 2021.

Excluding unemployment benefits charges from tax rate calculations is a strategy employed by many other states with the goal of preventing employers’ tax rates from increasing because of those benefits.  Having said that, it will be important to note that in other states where this approach has been used, tax rates have still increased as a result of uncontrollable factors such as additional surcharges, etc.  There is no mention of this in H.B. 5377 but depending on the level of the state’s trust fund balance, an overall increase in tax rates to employers is a real possibility despite this legislation.

As always, we will continue to monitor this situation and provide updates as they become available.  If there are any questions please do not hesitate to contact us or visit our website for the latest news and updates.