The U.S. Government Accountability Office (GAO) recently released their study examining unemployment overpayments on a national level. The study took a very targeted view of states in which claimants are issued formal “warnings” for not meeting their work search requirements. The results were staggering, as it was found that $1.6 billion (of $3.9B total) in over overpaid unemployment benefits in 2016 were made to claimants that were in violation of their requirement to actively search for work.
The Department of Labor clearly affirms and acknowledged these findings, and is working to draft guidance for state agencies. However, they cite the challenges they have in efficiently implementing a timely system to identify and allow claimant recourse before suspending payments.
As UTCA has always endeavored to protect employers from unwarranted UI costs at all levels, this study is troubling. Any overpayment an employer incurs can impact an experience rating or direct payments made to a state UI agency. Although UTCA actively tracks any and all charges to our employers, and diligently protests erroneous charges, there is no direct insight into the agencies tracking of a claimant’s requirement to search for work. The costly inefficiencies identified in the study lie within the state agencies. We will continue to track the developments as the Department of Labor looks to find a unified solution to this daunting overpayment issue.
What does this newly-quantified study mean to employers? The GAO’s study tells us it is more crucial than ever before for employers to be aware and pro-active in their approach to managing the unemployment. Creating a system to ensure you are minimizing your UI cost factors within every means you can control is the key.
If you are an employer unsure of the efficiency of your current UI program, or want the peace of mind to know they are taking advantage of all their opportunities to control cost, contact us today. There is never a fee for your initial assessment.