This weekend I read in The Wall Street Journal (Saturday/Sunday April 4-5, 2009 edition) that U.S. employers shed 663,000 jobs in March, pushing the nation's unemployment rate to its highest level since 1983. The article further went on to discuss "The jobless rate jumped to 8.5% from 8.1% - and many forecasters expect it to top 10% by later this year. The downturn, which started in December 2007, appears to be on track to surpass the two longest recessions since the Great Depression."

Pat Powell

For those of you who have read my bio, you will see that while I have been at TALX for a number of years, I have only been directly involved in the Unemployment business since May of 2008. Having been with TALX and having worked closely with the Unemployment Cost Management business leaders, I thought I knew what this business was all about. I mean seriously, a claimant files for unemployment, the employer responds with details about the circumstances behind the separation and the state decides. Simple - right?

Well maybe that is the general process, but it wasn’t until I started trying to really dig in to understand the business that I realized the error of my ways, or rather thoughts. On the surface, yes, the process is, claimant files, employer responds and state decides. However, how they file depends on the state in which they live, and what information the employer should provide depends on the state in which they operate. Whether or not the claimant will receive benefits for their particular situation depends, again, on the state.

Why so complex? Well, the states all run their own Unemployment Insurance (UI) programs. An employer pays taxes to both the Federal government and the State government. The Federal tax is used by the Department of Labor to, among other things, fund programs such as UI Modernization, make loans available to the states when their trust fund balances are low and provide incentives to encourage states to make certain legislative changes.

The state tax, the calculation of which again varies by state and is based on different factors by state, is used to pay benefits to claimants, cover administrative costs and cover socialized costs, which are benefits that are not directly charged against a specific employer. An example of a socialized cost would be unemployment benefits paid to former employees of a company that has gone bankrupt.

Given the complexity of the system, it is not surprising that claimants and employers are both confused. This confusion unfortunately adds to an already stressful situation. Whether you are a claimant or an employer, it is important to know the rules in your state. As a claimant, it could mean the difference between obtaining benefits or not. As an employer, not knowing the rules could result in paying unnecessary taxes. At the end of the day, the UI program is there to ensure that those claimants who are due benefits under the state’s program receive them and those claimants that are not due benefits under the state’s program do not.

Again, make sure you know the rules, your rights and your responsibilities.

Tammy Mullin

Well here goes my inaugural blog. With my many years of encouraging the delivery of HR services through technology, I picked this area for my blogging concentration. I might take a bend or two in the road, but my focus will be on the delivery of HR and payroll services. To me, leveraging technology to deliver HR services has always meant using technology to help HR teams better communicate with employees.

Recently I was preparing an update on 2009 HR trends (more on that in a coming blog) and in the midst of reviewing HR trends, I was overwhelmed with the fact that the strongest growing part of the workforce is the inactive workforce. Many are now speculating that we are headed to a 10% unemployment rate. With this dynamic in mind we really need to consider that the active employees still on the job need special attention.

Those remaining on the job are doing the work that had been done by others who are now part of the inactive ranks. Excellent delivery of HR services is essential to keeping these folks well-informed and engaged in the organization.

I was struck by a Stanley Bing article in the February 13th Fortune magazine.

http://money.cnn.com/2009/02/13/magazines/fortune/stanleybing/bing_column.fortune/index.htm

So what is the connection? It’s a great appeal to stay connected with those employees still doing the work.

Mike Smith

I-9/E-Verify

By: Dave Fowler

Welcome to the TALX blog focused on the Form I-9 and E-Verify. As you may know there are many changes occurring with the I-9 and E-Verify in 2009. On April 3, 2009 the new I-9 form went into effect. With this new form there are some big changes such as:

• The U.S. citizen and national citizenship statuses have been separated so there are now four citizenship statuses instead of three.
• Expired documents may not longer be used to complete the I-9.
• E-Verify is updated to not accept expired documents.

It is important to note that to update or reverify an I-9 completed on a previous Form I-9, you must complete a new I-9 using the new form.

The second major change scheduled to go into effect May 21, 2009 is the FAR rule that requires Federal contractors with a covered Federal contract to use E-Verify for all new hires and existing employees assigned to the contract. There is an option for the Federal contractor to submit all existing employees hired after November 6, 1986 to E-Verify. This option is very useful for employers who a) cannot easily track which employees work on covered Federal contracts and/or b) want to avoid employee tracking altogether and simply verify all existing employees and be done.

Here are some links for more information and to be kept up to date on changes to the Form I-9 and E-Verify. It is very handy to subscribe to the email notifications from these sites.

• http://www.dhs.gov/e-verify - This will take you to the U.S. Citizenship and Immigration Services site. Here you can sign up for email updates, access documentation about E-Verify, and read the FAQs.
• http://www.cis.org – This will take you to the Center for Immigration Studies site which covers immigration issues. You can sign up for email updates and read blogs.
• http://www.google.com – Sign up for email updates at Google News. You can use E-Verify as your key word to be kept up on E-Verify news and blogs.

I read today a notice issued by the IOWA Workforce Development which outlined the online tax filing procedures for the quarterly Employer’s Contribution and Payroll Report (Form 65-5300). This will be a time saver for employer that report employment in the state. Please note, effective January 1, 2009 Iowa increased the penalties and fees for late or insufficient quarterly Employer’s Contributions and Payroll Reports.

Click here for a PDF of the notice.

Pat Powell

The uncertainty in the economy surely has well-publicized ramifications for the private sector. But, those uncertainties also have created many questions with regard to the willingness and ability of federal, state and local officials to continue to offer tax credits and incentives to promote job creation and investment. Certainly, budget concerns can affect those decisions. However, we are seeing taxpayers and government officials paying a lot of attention to hiring tax incentives to try to stimulate job creation. We have many clients participating in the federal Work Opportunity Tax Credit program (WOTC). This long-standing program has been tweaked recently to further encourage hiring of targeted groups of individuals. Looking back to the late summer of ’08, we saw the extension of the Katrina WOTC category for those areas impacted by the devastating hurricanes in 2005. More recently, the Stimulus Package signed by the President in February, included the addition of two more eligibility categories to WOTC. Those are the disconnected youth category and the disabled veteran category. More information on the two new categories can be found here.

TALX has not seen a decline in interest in using tax credits and incentives to stimulate job creation and investment for targeted groups of people or in targeted areas. All the activity with WOTC gives us a dozen eligibility categories for this one popular federal tax credit program. In addition to the expansion of WOTC with the Stimulus Package, we saw in March ’09 the introduction of legislation to extend the Federal Empowerment Zone and Renewal Community tax incentives that are set to expire at the end of 2009. There are 40 Empowerment Zones in 20 states and 49 Renewal Communities in 29 states. The hiring credits available through these federally-designated zones are designed to encourage both job creation and job retention for the residents in those zones. (Link to Fed EZ/RC document here) If you want to find out if your business has an eligible address is in one of these zones, you can access a free website at http://egis.hud.gov/egis/cpd/rcezec/ezec_open.htm.

We also will be closely watching to see if the President’s budget proposing to extend ’09 tax provisions, including the extension of the WOTC Katrina category, will survive as it moves through the legislative process. Of course all this activity to expand, change or extend these programs also results in the need for administrative or regulatory changes within the agencies that regulate and monitor these programs. TALX is closely monitoring guidance as it becomes available from the Internal Revenue Service and the Department of Labor so that we can respond to the administrative changes. Taxpayers should be on the lookout for new IRS Form 8850’s to include the new categories of WOTC in the near future, as well as guidance on how to document eligibility for the new categories. So far, the response from the federal level has been to use the tax credit programs for what they are designed to do – promote targeted job creation.

Angela Lockman