Unemployment Insurance (UI) Overview for School Employers

22nd Annual Spring ConferenceMarch 29, 2012

Kahler Grand HotelRochester, Minnesota

Website: www.uimn.org

MinnesotaUnemployment Insurance

Program

Gary’s Contact Information:

Wayne’s Contact Information:

Minnesota Department of Employment and Economic Development 1st National Bank Building ● 332 Minnesota Street, Suite E200 ● Saint Paul, MN 55101

Ph: 651-296-6141 ● Fax: 651-205-4007 ● TTY: 1-866-814-1252 ● www.uimn.org An equal opportunity employer and service provider

Dear School Employer: Greetings! It’s that time of year again. This letter is to assist your human resource staff in understanding and responding to unemployment benefit notices. During summer break, unemployment benefits are for those school employees who do not have a reasonable assurance of equivalent school employment for the next school year or term. This also applies to workers whose services are contracted to primary or secondary schools, except for food service workers paid by a private employer. Unemployment benefits should stop the first week a worker is given assurance of equivalent employment for the next school term. This letter has been sent to one location of each educational employer. Please forward this information to others in your district or campus for whom it may be useful. Basic Provision of MN Statute section 268.085, subd. 7 An employee cannot receive school-based unemployment benefits for any weeks of unemployment between school years or terms in which he or she has 1) reasonable assurance of employment in the next school year or term, and 2) that employment is not substantially less favorable than his or her employment in the prior school year. What is “reasonable assurance” of employment? It means there is an understanding, often verbal or implied, that the employee will be returning to work for you, or another school or school-related employer, in the next school year. Reasonable assurance usually exists when an employee finishes the school year and expects to return in the fall, unless the employer has said or done something that takes the assurance away. For those who have been informed they will not be returning, reasonable assurance occurs the first week an offer of employment or re-employment is made to the worker. Likewise, reasonable assurance of employment may end at any time if an employer withdraws an offer or assurance of employment for the next school year. What does “substantially less favorable” mean? The law requires that we compare an applicant’s total school employment from all school employers in the most recent school year to the total school employment assured for the next school year by all employers. If there is no assurance of employment, or if the pay, hours, duration, or other conditions of the total employment in the next school year are substantially less favorable, the applicant is eligible to receive unemployment benefits over the break, and all base period school employers would be charged their pro-rated share of benefits paid to the applicant. Factors that could cause employment to be less favorable include but are not limited to: demotions, excessive commuting distance, shorter duration of employment, or a significant reduction in paid hours or compensation. Usually a 20% reduction is considered significant, such as a reduction from full-time to .8 FTE.

Continued on reverse side…

Minnesota Department of Employment and Economic Development 1st National Bank Building ● 332 Minnesota Street, Suite E200 ● Saint Paul, MN 55101

Ph: 651-296-6141 ● Fax: 651-205-4007 ● TTY: 1-866-814-1252 ● www.uimn.org An equal opportunity employer and service provider

Spring Letter – Page 2

On-call / Daily Substitute employment On-call employment is not compared in the same way. If the employee’s employment with all schools in the last school year was on-call, and he or she has assurance of on-call employment with any school employer for the next school year, the employee is not eligible to receive unemployment benefits during the summer break based on school employment. Once the school year begins, on-call substitutes are eligible for benefits for any week they work less than 32 hours and their gross earnings are less than their weekly benefit amount. Their benefits are reduced by 55% of their gross part-time earnings in a week, and they must be seeking full-time work. A sub is eligible winter and spring breaks unless they have assurance of working the first day after the break. Holiday Breaks (Winter and Spring Breaks) During breaks of a week or more within a school year, an employee is not eligible for benefits based on school employment if the employee works up to the break and has assurance of work immediately after the break. Most on-call employees probably will not have this assurance (eligible for benefits), but regularly scheduled employees will have this assurance (ineligible for benefits). Every benefit notice, questionnaire, and decision is mailed to you AND posted online in your UI Employer Account. Responding only online is recommended. When an application for unemployment benefits is first filed, we send a notice to every employer for whom the applicant worked in the past 13 -16 months. This gives each employer an opportunity to provide information or raise issues that may affect the applicant's eligibility or the employer’s UI account. Online, you should regularly monitor and respond to correspondence at the Determinations and Issue Summary link on your UI home page. Note that some correspondences are for your review, and others request a response. You may see the following. 1. A questionnaire will ask you about the applicant’s employment in the completed school year and his or her status for next school year. From this we determine the applicant’s eligibility. The preferred method of response is online through your employer account. If you do not respond, a determination will be made based on the information provided by the applicant. 2. Determination of Benefit Account, or Benefit Account Notice, or Reactivation Notice: You will see one of these, telling you that the applicant filed or reactivated an unemployment benefit account. (Benefit accounts exist for 52 weeks, then a new one must be filed.) No response is required, unless you need to raise an issue for which you did not get a separate questionnaire. 3. Determination of Eligibility or Ineligibility: This is our decision based on information from you, the applicant, and sometimes other school employers. You can read the decision online, and file an appeal online within 20 days if you disagree with it. Questions, problems, suggestions? Call the UI Customer Service Center at 651-296-6141. To speak with a representative, press 4 when you hear the automated attendant. We hope that you find this information helpful. Thank You, Minnesota Unemployment Insurance Program

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Minnesota Unemployment Insurance (UI) Program

The UI Program provides temporary benefits to qualified persons out of work through no fault of their own.The purpose of the program is to help maintain the economic stability within a community. During 2011 nearly 297,000 out-of-work Minnesotans received approximately $1.7 billion in UI benefits.

EmployersIn 2011… Approximately 125,000 Minnesota

employers were subject to UI wagereporting*

They paid-in just over $1.2 billion intaxes & re-payment of benefits

* about 5,000 of these employers were “reimbursers”who re-paid benefits of nearly $130 million

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Clearer Communications

Customer-centered focus on clear,easy-to-understand communications

100% NEW external website Intensive review and re-write

of nearly all external documents

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Taxpaying vs. Reimbursing…Reimbursable Account Option

Governmental employers (including school districts)default to the reimbursement method of reporting –Reimbursing employers:

Do NOT pay quarterly unemployment insurance tax, Must still report employee wage information on a

quarterly Wage Detail Report, Repay the Minnesota UI Trust Fund an amount equal

to the amount of unemployment benefits paid to theirformer employees (quarterly), and

May be charged for unemployment benefit paymentsregardless of the reason for separation from work.

Taxpaying vs. ReimbursingA Comparison…

Taxpaying Method Reimbursing Method

Must pay Unemployment Insurance (UI) taxes and assessments quarterly, even if no employees received benefits.

Not required to pay UI taxes or other assessments on wages paid to their employees.

Allows an employer to budget projected Unemployment Insurance (UI) costs.

Difficult to project costs as amounts due can vary greatly from quarter-to-quarter.

The effect of an employee's request for benefits (benefits paid charges) is distributed out over four fiscal years.

Benefits received by a former employees must be repaid dollar-for-dollar by the employer (much more immediate effect).

Under some circumstances, benefits paid to former employees are not charged to a taxpaying account.

Benefits paid former employees are generally charged to the employer regardless of reason for separation.

Must maintain the agreement for a minimum of twenty four calendar months

Must maintain the agreement for a minimum of twenty four calendar months

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UI Tax Rate Calculation

Employer Tax Calculation

Taxable Wage Base (per year indexed to MN average wage)• 2012 - $28,000 per employee

Base Tax• Indexed to Trust Fund balance - currently 0.5% (max. under current law)

Experience Rate• Ratio benefits charged to taxable payroll• Minimum experience rate is 0.0%• Maximum experience rate is 8.9%• Not all benefits are charged• Experience rate can be bought down

Additional Assessment• 14% of taxes due – triggered by low fund level

Special Assessment for Federal Loan Interest• 2012 – 0.5% of total taxes due

Workforce Development Assessment (not a UI tax)• 2012 – 0.10% of taxable wages – NOT assessed to Reimbursing Employers

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UI Benefit ExtensionsPrior to 12/23/2011:Up to 86 weeks…

Regular UI Federal EUC Tier I

Federal EUC Tier II

Federal EUC Tier III

Federal-State

Extended Benefits

(EB)

Up To 26 Weeks

Up To 20 Weeks -Ending December 2012

Up To 13 Weeks -Ended January 2012

Up To 13 Weeks -Ends April 8, 2012

Up To 14 Weeks -Could end May 2012

Overview:

Benefits Paid Charges

Online Self-ServiceEmployer System

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Benefits Paid Charge Activities

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Benefits Paid Charge Activities

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- Search for Benefits Paid Charge informationby applicant SSN or Name.

Benefits Paid Charge Activities-- Benefits Paid Charges by Applicant --

Benefits Paid Charge Activities-- Benefits Paid Charges by Applicant --

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Benefits Paid Charge Activities-- Applicant Detail --

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Benefits Paid Charge Activities:-- Other Search Methods --

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Questions ?

Everything You Thought You KnewAbout Unemployment Benefits

for School Employees…

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To Be Eligible One Must:

Apply for benefits (no retro)

Have sufficient Base Period earnings

Lose work for non-disqualifying reasons

Meet weekly requirements: Available (Able) & Actively Seeking Work

Report other income that may reduce ordelay benefits.

Notice / Determination of Benefit Account

Sent to All Employers Shows Potential Benefit Charges Provides You an Opportunity to: Correct Base Period Wages, and/or Raise an Issue (“How to” discussed later)

Any wage correction or addition by anybase period employer… All employers are mailed an “Amended

Determination of Benefit Account”

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i.e., Off the hook forever…

When/how does it happen?

Relief of ALL Charges

Relief in Specific Circumstances

A law required the employee’s removalfrom his or her position.

Employer continues to provide regularlyscheduled part-time work, 90% of base period.

Discharge for gross misdemeanor or felony that adversely affects employer (aggravated employment misconduct).

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Relief in Specific Circumstances, cont.

Unemployment caused by disaster or property condemnation, and > 25% out of work

Unemployment caused by a strike, if employer was not a party to the labor dispute

6+ month replacement worker, laid off because reservist returned to work after active duty

Applicant files for UI against another state, andMN wages are used by that state to pay UI

Relief only for Taxpaying Employers…

not Reimbursing Employers

Employee’s wages from taxpaying employerwere less than $500 in base period.

Employee quit without a good reason causedby the employer.

Employee was discharged for “simple”employment misconduct, not aggravatedemployment misconduct.

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But he QUIT !!!

Even if the employee quit without a good reason or was fired for a good reason, he or she may have requalified* for UI benefits by working for a new employer and then getting laid off.

If the employee then receives benefits, a reimbursing employer will pay their share of those benefits. If they are the only base period employer, they will pay 100% of the benefits.

* “Requalifying” is defined in the next slide…

Requalifying

If employee has earned 8 times his or her weekly unemployment benefit amount at her last job, quits or discharges from prior jobs have no affect on her unemployment benefits.

It’s important for you to raise any quit or “discharged for misconduct” issue, as the applicant might not have earned 8 times his weekly benefit amount since leaving you, and could be ineligible as a result.

If applicant is ineligible, there can’t be charges to you unless he or she becomes eligible at a later date.

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Summer Breaks

An employee cannot receive school-based unemployment benefits for any weeks of unemployment between school years in which he or she has:

“reasonable assurance” of school employment inthe next school year, AND…

the new employment is not “substantially lessfavorable” than his or her total school employmentin the prior school year.

“Total School Employment”

The law requires that we compare the sum of employment with all school employers in the last school year to the sum of employment offered by all school employers for next school year.

If next year’s work offered by all school employers is substantially less, the applicant is eligible for UI benefits over the summer.

This means you can offer the same (part-time) position to someone, and still be charged for summer benefitsif they lost other school employment.

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“Reasonable Assurance”

An understanding, often verbal or only assumed or implied, that the employee will be returning to work.

Reasonable assurance usually exists unless the employer has said or done something that takes the assurance away.

Reasonable assurance can be from ANY school employer.

“Reasonable Assurance” - cont.

If you lay someone off, as soon as they have reasonable assurance (offer of work) of an reasonably equivalent position with you or another school employer, UI benefits stop.

The reverse is true; if someone loses reasonable assurance during the summer or the job falls through at the beginning of the school year, they become eligible for UI.

The eligibility is retroactive to the beginning of the summer break for an employee who was not an instructor, administrator, or researcher.

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“Substantially Less Favorable”

An applicant may have reasonable assurance of a job for next school year, but it might be for a position that is “substantially less favorable” than employment in the prior school year.

If so, eligibility for UI benefits continues to the start of the next school term, even if he or she has accepted the offer.

Factors that may make employment substantially less favorable: a significant reduction in compensation or benefits (example: Reduced from full-time to FTE 0.8 or less), demotions, shorter duration of employment.

Summer School

Because summer school is not considered part of the academic year, it is NOT part of the comparison when we determine if work offered for next academic year is substantially less favorable. In other words, we ignore whether summer school employment is offered or not.

Similarly, a 12-month employee who is reduced to a 9-month schedule is not eligible for summer UI if their earnings during the 9-month school years will be the same.

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“I can’t stand sixth graders…”

Having to teach at a new grade level or different subjects is NOT considered “substantially less favorable” even thoughit may require a steep learning curve and extra hours of prep to do it right.

On-call / Daily Substitutes

Are rarely eligible for summer UI benefits. UI law says that if a sub’s work with ALL schools in prior

school year was on-call, and the sub has assurance of on-call work with ANY school employer for the next school year the sub is ineligible for summer UI benefits based on wages from schools.

However, when school year begins, a sub is eligible for UI benefits for any week his or her gross earnings are less than the weekly benefit amount. He or she must be seeking full-time work.

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“Long-term" Substitutes

Those who had a contract to work for a specified period.

“Long-term” may be relatively short, 3-4 months.

The rest of the school year they may have been on-call.

We compare last school year’s work with work offered for next school year, as we do for regular employees.

An applicant who worked 3+ months under contract, who has no such contract for next year, may be determined eligible for summer UI benefits.

Winter & Spring Breaks of One Full Week, or More…

Same idea as summer break: ineligible if “reasonable assurance” of employment immediately after the break.

Regularly scheduled employees will have this assurance, and are not eligible.

Daily subs are usually eligible. They are only ineligible if they work on the last school day before the break, and have assurance of working the first school day after the break.

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Coaches and Referees268.085, Subd. 11. Athletes and coaches

Unemployment benefits must not be paid to an applicant on the basis of any wage credits from employment that consists of coaching or participating in sports or athletic events or training or preparing to participate for any week during the period between two successive sport seasons, or similar periods, if:

(1) the applicant was so employed in the prior season or similar period, and

(2) there is a reasonable assurance that the applicant will be so employed in the followingseason or similar period.

Coaches and Refs, continued

Many employees are both teachers and coaches, and usually have assurance of doing both, or assurance of neither. So to simplify, one determination regarding school employment is issued (must be paid as an employee for BOTH).

However, if someone is only assured of coaching and notteaching, we remove the coaching wage credits between sports seasons. You may get a request asking what the total coaching wages were.

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Raising an issue that an applicant has

assurance of work for next term

You can’t say someone has reasonable assurance of employment for next school year until this school year is over. Circumstances may change, you might fire them (or they might quit) before the end of the school year (or sport season).

Only after the end of the current school year or term should you raise an issue of “reasonable assurance” of employment for the next term.

You can raise other issues at any time, quits, discharges, unavailability for work, etc.

Questions ?

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Overview:

Determination and Issue Summary

Online Self-ServiceEmployer System

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Employer Home Page – Benefits Functionality

Determinations, Issues and Account NoticesView – Respond – Raise An Issue – Appeal

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Raise An Issue

Raise An Issue (Questionnaire)

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Raise an Issue (Questionnaire) - cont.

This section of the Raise an Issue questionnaire isdesigned specifically for the issues that are unique toschool, sports, emergency and disaster employment.

You can choose multiple items on this questionnaire Remember – if you don’t see it here, call the Customer

Service Center at the number listed…

Custom Search: Determinations, Issues and Account NoticesView – Respond – Raise An Issue – Appeal

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Pending Eligibility Issue

Pending Eligibility Issue

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Pending Eligibility Issue

Questionnaire, as submitted…

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Questions ?

We appreciate your interest !!!

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Bonus Material(for study on your own feel free to call us…)

Quits and Discharges MisconductWeekly Requirements

Quits andDischarges

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Quits – What is a Quit?

If an employee can continue to workand chooses not to, he is quitting.

If you ask someone to resign and don’tgive them the option of continuing towork, you are firing them.

What is a “good reason caused by the employer” for quitting?

A reason directly related to the employment for which the employer is responsible / liable.

It is adverse to the worker. It would compel an average, reasonable

worker to quit and become unemployed.

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Quit due to Working Conditions

The employee must complain to theemployer, and…

…give the employer a reasonableopportunity to correct the adverseconditions.

Employer Changes Job or Pay

Substantial adverse changes can be a good reason to quit, and employer is charged.

Employer may have no reasonable alternative but to make the changes still charged.

Hours or compensation cut (ballpark 15-20% or more). Location changed to unreasonable commute. Hours or schedule changed to unusual one for occupation

(office worker changed to night shift). Substantial demotions or changes in type of work

performed unless proven misconduct or bad performance. Excessive mandatory overtime or excessive additions to

job responsibilities.

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Other Reasons to Quit –Applicant paid, reimbursing employer charged.

Quit to accept a verified, better job. Quit within 30 days because a job was unsuitable. Quit unsuitable job to enter a job training program Quit part-time work if eligible for UI benefits based on

full-time work. Verified serious illness or injury made quitting

necessary (no reasonable accommodation). Verified domestic abuse made quitting necessary. Quit necessary to care for disabled immediate family Lost child care and made efforts to find new child care

and asked employer to accommodate (time off, etc.)

Discharges

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Misconduct?

Discharge or Suspension for Employment Misconduct (employer not charged)

Conduct has to be intentional, negligent,or indifferent (don’t care).

It has to be a serious violation ofbehavior standards you have the rightto expect.

Not an isolated or trivial incident that hasno significant effect on the employer.

Employers do not have the right toexpect perfect behavior or attendance.

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What is NOT Misconduct?

The following are not employment misconduct:

Inefficiency, inadvertence, simple unsatisfactory conduct, conduct an average reasonable employee would have engaged in under the circumstances, poor performance because of inability or incapacity, good faith errors in judgment if judgment was required, or absence because of illness or injury with proper notice to the employer.

Obvious Misconduct - examples fighting or making physical threats stealing dishonesty in time or production reporting intentional or reckless damage gross negligence of duties harassing coworkers after warning

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Usually Misconduct - examples

unreported absence excessive absence or tardiness for

other than medical reasons (subjective) serious or repeated violation of known

policies insubordination or not heeding warnings

or instructions

NOT Misconduct - examples

unsatisfactory work production orquality due to inability.

errors in judgment if acting in good faith. mistakes or accidents not caused by

carelessness or indifference. absence due to illness or other unavoid-

able circumstance, if employer notified.

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Possible Misconduct -How to Respond…

Documentation: policy, warnings, absentee record, incident reports (not ancient history)

Firsthand statements vs. hearsay from H.R.

Give facts, not just conclusions or generalizations.

Clarity / Consistency, not a “Laundry List” or “Scattergun” approach. (No final incident?)

Describe the behavior, explain why it was serious, and how it was intentional or negligent.

Weekly Requirements –

Available for Work

Can accept work without delay, if offered.

Must be available for the usual hours and days of one’s occupation (child care needs or other personal circumstances notwithstanding)

Must be willing and able to commute a reasonable distance, using public or private transportation, car pool, etc.

Student must be willing to quit school to accept job, unless he is a dislocated worker in full time training.

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Weekly Requirements –

Able to Work (part of “Available”)

Physically and mentally.

Medical restrictions okay if seeking and willing to accept work that is available within the restrictions.

If medical restrictions prevent usual occupation, may seek other work.

Weekly Requirements –

Actively Seeking Work

If not being recalled, participation in orientationand assessment at WorkForce Center is required.

WorkForce Center develops reemployment plan with applicant, and provides resume and job seeking skills workshops & resources.

Applicant must complete actions of plan, and can be denied UI benefits for failing to participate.