Save Time, Money in Dealing With UI Claims

Improper payments of unemployment benefits may seem to concern only the government. In fact, it can be a costly and time-consuming problem for all  – the business community as well as government.

You can save your company money – and spare yourself hours of wasted time – simply and easily. Just pay careful attention to the Unemployment Insurance (UI) notices that you receive from the Employment Development Department (EDD) and, when asked, respond to them quickly and accurately.

Improper payments of UI benefits occur when an employer or a former employee provides inaccurate information to the EDD, or does not provide the information in a timely manner. When this happens, former employees may collect benefits they are not entitled to receive. These overpayments will be charged to your account and may increase your UI tax bill.

In three quick steps, you can stop this from happening:

First: When a worker leaves your employ, provide the EDD with complete and accurate separation information. This will help prevent overpayments and may save you from going through the appeal process.

Second: Respond promptly to the EDD’s request for verification of an employee’s weekly earnings. This will help us spot and prevent overpayments.

Third: Report all new hires promptly. This enables us to determine if someone is double-dipping – continuing to collect UI benefits while working in a new job. Payroll Masters can automatically report your new hires to the California Employment Development Department (EDD) electronically for an additional fee. Fines for not accurately reporting SSN on new hire reports can be considerable.

Consequences for UI claimants receiving overpayments are not surprising: they must repay the money, plus penalties and fines. They could also lose future eligibility for benefits and, in extreme cases, go to prison. If they do not repay the money, it may be withheld from their state and federal income tax refunds.

Employers can also face serious consequences for failure to comply with the UI laws. Their UI accounts can be charged for improper payments, thus increasing their UI tax burden, and they may face fines and penalties.

You can save time and money by paying careful attention to UI notices and responding timely with the necessary information. It’s simply good business.

Source: EDD  |  2015 © Copyright Payroll Masters

This document has been provided for informational purposes only and is not intended and should not be construed to constitute legal advice. Please contact your employment attorney in connection with any fact-specific situation in which you intend to take significant employment action. Readers agree that they will not hold Payroll Masters in indemnity and Payroll Masters assumes no liability. Payroll Masters is not engaged in rendering legal or accounting services. Therefore, Payroll Masters assumes no responsibility for claims arising from the use or implementation of the above information.