Commission on Unemployment Compensation

Sam Lupica, Acting CommissionerAugust 14, 2014

Status of the Unemployment Trust Fund

and Related Issues

Basic Benefit Information

Purpose Min/Max Amount

$60 $378

Min/Max Duration 12 weeks 26 weeks

Qualification Eligibility Effective July 6, 2014, minimum earnings

requirement increased from $2,700 to $3,000; and minimum weekly benefit amount increased from $54 to $60.

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Trust Fund Data—Standard Forecast (Millions of Dollars)

2013 2014

January 1 Balance ($34.3) $186.9

Tax Revenue $791.1 $742.4

Interest Revenue $4.7 $8.8

Benefits $575.8 $510.0

December 31 Cash Balance

$186.9 $428.6

Solvency Level (6/30) 24.4% 34.2%

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December 31, 2013 and 2014, balances include $1.2 million and $0.5 million, respectively, from FUTA Credit Reduction paid to IRS.

June 30 Trust Fund Balances and Solvency

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Mill

ions

Trust Fund Solvency shown as a percent (%)

Average Total State Tax5

Cos

t pe

r E

mpl

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Average State Tax

Calendar Year

Pool Taxes6

Calendar Year

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Distribution of 2014 Base Tax Rates(excluding 0.22% pool tax and 0.20% fund builder tax)Computed and Assigned Rates7

Claims Filed

Calendar Year Initial Claims

2009 485,711

2010 380,830

2011 330,057

2012 301,211

2013 276,807

2014 (Jan. – June) 117,477*

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*Annual claims projected to be 231,000.

Virginia’s Unemployment Rates2012 - 2014 (year to date)

9Pe

rcen

t of L

abor

For

ce

(not seasonally adjusted)

UI Initial Claims2012 - 2014 (year to date)

Total initial claims through June this year are down 16.7% because of fewer layoffs in manufacturing, administrative and support services, construction, and accommodations and food services.

October 2013 increase includes initial claims from partial federal government shutdown.

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UI Final Payments2012 - 2014 (year to date)

For the first six months of 2014, final payments are down 13.6% from 2013 and 23.9% from 2012.

The exhaustion rate in June was 46.3%, down from last June’s 47.9%.

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Exhaustion Rates2012 - 2014 (year to date)

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Exha

ustio

n Ra

te

Fourth Circuit States13

Implementation of Legislation Enacted During 2014 Session

SB110 Short-Time Compensation creates § 60.2-700 thru 710 Establishes a short-time compensation program that provides employers with the option of reducing the hours worked by employees, while permitting the employees whose hours are reduced to receive partial compensation for lost wages

Effective January 1, 2015 U.S. Department of Labor is reviewing the Virginia Short-

Time Compensation Program for compliance with funding eligibility criteria outlined in the Unemployment Insurance Program Letter number 27-12

Marketing of the program will be conducted through VEC’s Employer Conferences and electronic messaging via the Virginia Workforce Connection

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Implementation of Legislation Enacted During 2014 Session

SB18 Military Trailing Spouse amends § 60.2-618(1) and §60.2-528(c)(9) Provides that good cause for leaving employment exists if an employee voluntarily leaves a job to accompany the employee's spouse, who is on active duty in the military or naval services of the United States

Since the effective date of July 6, 2014, there have been twelve claims filed under trailing spouse

Administrative Law and UI Division have provided appropriate guidance to all adjudicators

Relief of Benefit Charges: Benefit charges are assigned to pool, rather than charged to individual employers of military trailing spouses

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Implementation of Legislation Enacted During 2014 Session

HB22 Benefit Ratio amends § 60.2-530 Provides that an employer's payroll, for purposes of calculating its benefit ratio and state unemployment tax rate, shall be deemed to be $1 when the employer's taxable payroll for the applicable 12-month period is not more than $1

The technical change required for calculating the state unemployment tax rate and benefit ratio has been made

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Implementation of Legislation Enacted During 2014 Session

HB389 Voluntary Separation amends § 60.2-618 Establishes a rebuttable presumption that an individual left work voluntarily if the individual was a graduate student whose employment commenced and ended between spring and fall semesters of his academic program and he returned to his academic program following his separation from employment

Administrative Law and UI Division have provided appropriate guidance to all adjudicators

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Implementation of Legislation Enacted During 2014 Session

SB266 Financial Literacy § 60.2-401 Financial Literacy information has been posted to

the VEC’s homepage and included in the PIN letters claimants receive

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