CALIFORNIA – US DOL TO LAUNCH INVESTIGATION INTO UI PROGRAM
With California’s unemployment fund deeply in debt, including $21 billion in borrowed funds from the federal government to pay benefits, employers have been facing increased unemployment insurance taxes to help repay this debt for years. Now, the U.S. Department of Labor (DOL) is launching a review of California’s Unemployment Insurance (UI) program due to this debt, paired with rising concerns about fraud, payment errors, slow or inaccurate processing, and poor data.
According to US Secretary of Labor Lori Chavez-DeRemer, the DOL will be engaging a “specialized strike team” with specialists from national and regional offices to help uncover fraud and/or abuse and help restore the state’s financial health.
It is unclear what the DOL may uncover and how they will restore the states’ financial health. This review could lead to changes in how unemployment claims are processed, stricter oversight, and new requirements to ensure only eligible employees receive benefits. You can expect more attention to fraud prevention and accountability, which may lead to additional administrative steps or documentation when dealing with unemployment claims from your workforce.
Thomas & Company will continue to monitor this review and any potential changes to the California UI program that comes as a result.
WASHINGTON – CALL CENTER HOURS TO REMAIN ABBREVIATED AFTER SUCCESSFUL PILOT
In October 2025, the Washington Employment Security Department (ESD) began adjusted call center hours as part of a 90-day pilot. This pilot showed promising results, including paying claimants more quickly and answering more phone calls. Therefore, the ESD will continue with this approach through at least June 30, 2026.
Adjusted hours will occur on Tuesday and Thursday, with the call center only open from 8AM to 12PM local time. The remainder of the business day will be focused on processing claims. Meanwhile, normal hours will continue on Monday, Wednesday, and Friday from 8AM to 4PM local time. The state tax accounting team will continue to be available during normal business hours, with no changes in their operating schedule.
VOLUNTARY CONTRIBUTIONS – REMINDER OF UPCOMING DEADLINES
A voluntary contribution (VC) is a payment an employer can make to reduce their unemployment tax rate. By making a voluntary contribution to the state’s unemployment insurance fund, an employer can lower their experience rating and, as a result, reduce future unemployment tax liability.
In states where voluntary contributions are permitted, Thomas & Company performs an analysis to determine whether a voluntary contribution would be beneficial for each SUI account. As a reminder, several states have upcoming deadlines for voluntary contribution submissions. In order to take advantage of these potential savings, please review the below deadlines and ensure appropriate payment is made prior to the cutoff.
- February 28: Arizona
- March 2: Nebraska
- March 11: Kansas
- March 13: Massachusetts
- March 14: Colorado
