An element of progressive discipline, warnings and corrective actions are an effective way of ensuring an employee understands what is expected of them. State agencies look for warnings, in most instances, to determine if the claimant was discharged for misconduct—a deliberate or willful violation of company rules.

It is the employer’s responsibility to ensure that all employees are aware of company, rules policies and procedures.

Guidelines:

• When your company issues an employee handbook or rules, retain an acknowledgement of receipt in the employee’s file.
• Special policies and procedures should, if possible, be posted.
• Be consistent: enforce rules and policies uniformly
• Be specific and objective when you counsel employees. Avoid using general statements, e.g., “poor performance,” to describe willful or deliberate violations of rules within the employee’s control. Permit the employee to respond in writing.
• Note witnesses, dates, time, etc. of documented incidents
• Request employees to sign all warning notices. Witnesses to warnings are recommended. If the employee refuses to sign, write on the notice that the employee refused to sign, and ask the witness to sign his/her name next to the statement. Remember, signing a warning notice does not mean the employee is admitting to the offense; it is simply an acknowledgement of receipt.
• Follow up. If you warn a suspended employee, document what is expected and note any important timeframes.

Although written warnings are better, notes or verbal warnings are important if documented.

Tammy Mullin

The Senate this morning passed (70-to-28) the $15-billion jobs package offered by Senate Majority Leader Harry Reid, D-Nev., which includes payroll tax breaks, bond-financing for state and local infrastructure projects, a small-business expensing provision, and an extension of federal highway programs.

Angela Lockman

Employers know the use of progressive discipline helps an employee understand that a performance problem or opportunity for improvement exists and helps the employee overcome those performance problems and satisfy job expectations. It is most successful when it assists an individual to become an effectively performing member of the organization.

Failing that, progressive discipline enables the organization to fairly, and with substantial documentation, terminate the employment of employees who are ineffective and unwilling to improve. Organizations whose managers follow recognized documentation best practices are in a much better position to protest unwarranted unemployment claims.

There are five elements to all effective documentation of progressive discipline:

1. Date of the infraction

2. Details of the infraction  

3. Explanation of corrective action needed

4. Statement of next disciplinary steps  

5. Signature of the employee

Tammy Mullin

On February 22, 2010, the Senate approved (62-to-30 margin) a motion to proceed with the $15-billion jobs package offered by Senate Majority Leader Harry Reid, D-Nev., which focuses on the immediate effect of hiring. The Senate passage of Hiring Incentives to Restore Employment (HIRE) Act (H.R. 2847) is an important step in the effort to put Americans back to work. The provisions of the bill include: a payroll tax holiday for certain new hires, an extension of the Build America Bonds program to existing tax credit bonds, an extension of highway authorizations, and a one-year extension of higher expensing thresholds.

On February 23, 2010, the Senate will convene at 10:00 AM. The Senate will then resume consideration of the post-cloture debate on the House Message to the Senate amendment of H. R. 2847 (Jobs for Main Street Act).  The Senate will recess from 12:30 – 2:15 for party caucuses. A final vote on the measure is expected within the next two days.

Following the vote Reid stated, by the end of February he would move to the remainder of the jobs bill introduced by Senate Finance Committee Chairman Max Baucus, D-Mont., and ranking member Charles E. Grassley, R-Iowa, that includes a package of tax extenders and other tax-related proposals to spur hiring and help stabilize the economy.

President Obama called the Senate vote "an important step forward" in job creation. The bill includes several of President Obama’s top priorities for job creation, including tax incentives for hiring and small business investment.

Angela Lockman

With the American Recovery and Reinvestment Act (ARRA) provisions set to expire, emergency unemployment benefits will end for millions of Americans. Senate action is required in order to extend the ARRA. Senator Reid has indicated that the Senate will take up the measure next week. With that in mind, the UI Coalition sent a letter to the members of the US Senate requesting that they consider the following:

• Extend the waiver of interest on loans to states to pay unemployment compensation through 2012.

• Waive the FUTA penalties on employers in states borrowing to pay unemployment benefits through 2011.

• Reduce the Federal Unemployment Tax.

• Provide $30 million in additional targeted administrative UI funding in fiscal years 2010 and 2011.

These provisions are designed to reduce the costs of unemployment to employers and enable them to create jobs thus aiding in the country’s economic recovery.

A copy of the letter as well as a more detailed explanation of each provision is attached.

This issue has been around since the very early years of the unemployment insurance (UI) program in the United States: Where do you report an employee’s wages if the employee works in more than one state or in a different state than the employing company is located?

While in general, workers’ wages are reported to the state where the work is performed, it became clear early on that many employers had workers that crossed state lines and they wanted to avoid duplicate taxation of these wages. Therefore, an agreement was signed between the states providing a methodology known as “localization of work” to determine where wages should be reported. The US Dept of Labor developed model legislation that was passed into law in every state during the 1940’s. An agreement between Canada and the United States was signed in 1947 to include Canada in the localization of work agreement to avoid duplication of taxation when workers crossed the border.

To insure uniform interpretation of the localization of work provisions, the US Dept of Labor issued an Unemployment Insurance Program Letter (UIPL) No. 291 on July 1, 1952. I had the distinct pleasure, as Chief of Tax for the US Dept of Labor, of updating and re-releasing this information on May 10, 2004, as UIPL No. 20-04. This UIPL still serves as a guide to the business community, all states, and Canada for determining where wages should be reported.

In a nut shell, localization of work provisions should be applied in the following sequence in order to determine where wages are to be reported:

(1) Is the individual's service localized in this state or some other state?

(2) If his/her service is not localized in any state, does he/she perform some service in the state in which his/her base of operations is located?

(3) If the individual does not perform any service in the state in which his/her base of operations is located, does he/she perform any service in the state from which the service is directed and controlled?

(4) If the individual does not perform any service in the state from which his/her service is directed and controlled, does the individual perform any service in the state in which he/she lives?

For further explanation and examples, UIPL No. 20-04 may be found in its entirety by following the link below:

http://wdr.doleta.gov/directives/corr_doc.cfm?DOCN=1565

Rett Hensley TALX Consultant

Click here for schedule and factor changes for 2009-2010 through 2/15/10.  Check back often for updates. 

If you are interested in getting more current information, along with notification for all legislation that could impact your unemployment tax rate, contact Pete Krieshok at PeteKrieshok@talx.com and ask about our Enhanced Rate Forecasting.  Tell him Tammy sent you.

Tammy Mullin

The Congressional Budget Office (CBO) has issued its budget and economic outlook for fiscal years 2010 through 2020. The report concludes, in part, that unemployment taxes will increase from $38 billion in 2010 to $75 billion by 2013 and continue to rise to $84 billion by 2020.

An employer’s unemployment rate is determined not only on the employer’s individual experience, but on the health of the state’s trust fund balance. As of this date 32 states (including Virgin Islands) have borrowed federal funds in order to pay unemployment benefits. A total of 12 states have borrowed in excess of $1 billion.

New Hampshire is adopting a Shared Work Program to join the other states mentioned in last week's blog Shared Work Programs.  It looks like public opinion is mixed with some worried that it will put pressure on an already over-burdened unemployment fund and others concerned that it is helping employers cheat their workforce. 

In order to qualify for these types of programs, the employer must show that work hours have been reduced, so they aren't really getting free labor as some may think.  Also, when all is said and done, the unemployment charges are charged back to the employer's unemployment account which they pay back eventually through unemployment taxes anyway. 

So, I don't believe employers see this as a way to cheat the system.  If anything, it benefits the employee, who is able to stay employed and will be better off when business turns around.  They can get back to full-time employment more quickly than folks involved in a straight layoff. 

As far as the burden on the unemployment fund goes, it should pretty much even out in the end.  If you have to cut labor in half, whether you do it by laying off full time workers or cutting everyone back to part time, the math should work out the same in the end. 

What do you all think?  Are shared work programs good for the employer, the employee or both?

Tammy Mullin

The following is part of a bulletin going out to our clients.  Since this is such a front of mind topic, I thought I'd post here as well so everyone can get an update.

Situation

With federal Unemployment Insurance (UI) extensions set to expire at the end of this month, the Senate Finance Committee introduced a legislative proposal on February 11, 2010, to reauthorize UI provisions. Included in the HIRE Act (Hiring Incentives to Restore Employment) proposal is a three month extension of federal Emergency Unemployment Compensation (EUC), Federal Additional Compensation (FAC), and federal funding of state Extended Benefits (EB). The estimated cost for these reauthorizations is $22 billion.

In addition, Senate Majority Leader Harry Reid (D-NV), has stated he will bring a smaller version of the Senate Finance Committee bill to the Senate floor on February 22, 2010.

What Employers Need to Know

The UI assistance measures originally implemented under the American Reinvestment and Recovery Act (ARRA) were extended through February 28, 2010, due to reauthorizations signed into law on December 19, 2009. A summary of UI provisions currently in effect are as follows:

Emergency Unemployment Compensation (EUC) – Persons who exhaust their 26 weeks of regular unemployment benefits may establish or augment eligibility for up to four tiers of EUC. The reauthorization does not add any additional weeks of EUC; it simply extends the date an EUC claim may be established. The program continues to be 100% federally funded from Treasury general revenue. The following table illustrates available EUC benefits.

State Extended Benefits (EB) Full Federal Funding – Normally, the funding for state EB is shared – 50% by the states and 50% by the federal government - but was temporarily changed to 100% federal funding under ARRA. The December 2009 reauthorization pushes back the expiration of full federal funding from Treasury general revenue to the end of February 2010.

Note: By law, government entities and Indian tribes are not covered under normal federally shared or temporary full funding of state EB, and will liable for any EB paid to their unemployed workers.

Federal Additional Compensation (FAC) – A $25 supplement continues to be added to all weekly UI benefits paid, be they regular, EUC or EB. The financing of FAC will continue to be 100% federally funded from Treasury general revenue.

Next Steps

The HIRE Act proposal will not change any of the core UI elements noted above. It will simply push back the expiration date to May 31, 2010.

Tammy Mullin