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# Saturday, October 23, 2010

If you report wages in Louisiana, please read the attached notification from the State Workforce Commission about penalties you may face if your payroll reports are not filed timely or accurately.

LA Mailer 10-14-10.pdf (52.66 KB)

Tammy Mullin

Saturday, October 23, 2010 2:33:55 PM (Central Daylight Time, UTC-05:00)  #    Comments [0] -
Unemployment Cost Mgmt
# Tuesday, October 19, 2010

The following was sent to TALX clients -


The state of South Dakota’s trust fund remains solvent. The balance in the trust fund as of September 30, 2010 was $27 million, which results in the elimination of the remaining surcharge of 0.1% that had been in place for the third quarter, 2010. The surcharge had decreased from 1.0% for the first and second quarters of 2010 to 0.1% effective with the third quarter, 2010. The surcharge has been eliminated for fourth quarter, 2010 as the trust fund balance exceeds $16.5 million at the end of the quarter.

The trust fund has been increasing as a result of the passage of SB186 and HB1018 during the 2010 legislative session. SB186 reduced the surcharge amount for 2010 and 2011, increased the taxable wage base and created a new tax rate table with higher rates for employers with negative account balances. HB1018 brought $11.7 million in federal funds to the trust fund while expanding benefits for workers in state-approved training for high-demand occupations.

What Employers Need to Know

This increase in the trust fund balance means employers’ tax rates for the fourth quarter, 2010 are decreased by 0.1%. The balance in the trust fund, as projected, increased above $16.5 million as of September 30, 2010 eliminating the surcharge all together.

The eliminated surcharge rate should appear as 0.0% on your paper quarterly unemployment report or when you file on the internet.

What You Can Expect

Through analysis and understanding of state unemployment tax changes, employers can be proactive in unemployment budget planning, impact studies and rate projections. In the event of an impending merger, acquisition, reorganization, or divestiture, additional employment tax planning and compliance issues should be examined.

Tammy Mullin


Tuesday, October 19, 2010 8:02:55 PM (Central Daylight Time, UTC-05:00)  #    Comments [0] -
Unemployment Cost Mgmt

I was traveling to the UI Directors Conference in Washington D.C. yesterday with a co-worker and we started talking about an article I read where a U.K. Job Seeker was crying foul about a Jobseeker Allowance (U.K. unemployment benefit program) requirement to participate in a training and skills program in order to keep his benefits.

The job seeker showed up for training thinking that he was going to be learning valuable job skills that could help him find a new career and instead was asked to wrap Christmas presents for a charity and make sandwiches. 

Well, the job seeker was understandably disappointed since he thought he was going to be getting career help, but the thought Joe and I kicked around was how great would that be if every unemployed individual decided to volunteer just one day a week to a charity.  A mandate is probably not feasible, but a well placed call to action might not be a bad idea. 

Plus, the hidden benefit for the job seeker is that more and more individuals are actually finding long-term gainful employment in organizations where they started out as volunteers. 

Sounds like a win/win to me…

Tammy Mullin

Tuesday, October 19, 2010 1:16:21 PM (Central Daylight Time, UTC-05:00)  #    Comments [0] -
Reemployment | Unemployment Cost Mgmt
# Monday, October 18, 2010

The following was issued to TALX clients -


The third quarter, 2010 contribution report filing deadline of October 31st falls on Sunday this year. We have contacted the state agency to determine if that deadline will be extended to the following business day.

What Employers Need to Know

According to Texas law, if the quarterly filing deadline falls on a Saturday, Sunday or a legal holiday, it is extended to the following business day. No penalty will be assessed as long as the report and payment are postmarked or filed electronically before midnight CST the next business day. That date is Monday, November 1st for this quarter.

Since the computation date for employer’s 2011 rate calculations is September 30, 2010, another section of the law applies. Only taxable payroll from reports filed and paid by October 31, 2010 is included in the 2011 rate calculation. That date is NOT extended; therefore, employers should plan on filing and making payment by October 31, 2010 to ensure proper credit in their rate calculation. Not getting credit for the third quarter taxable payroll could have a detrimental effect on the 2011 rate assignment.

Any unreported wages or unpaid taxes that remain delinquent as of October 31, 2010 will also not be included.

Tammy Mullin

Monday, October 18, 2010 4:51:12 PM (Central Daylight Time, UTC-05:00)  #    Comments [0] -
Unemployment Cost Mgmt
# Thursday, October 14, 2010

HR Service Matters

By: Mike Smith


During our Fall Client Advisory Board (CAB) meeting two breakout sessions generated a lot of interesting, thought provoking discussion.  One breakout centered on onboarding issues while another tackled the workforce issues being driven by the current economic conditions. 


Generally CAB members placed a high priority on improving the onboarding process currently in place at their organization.  One of biggest issues that everyone is facing is getting the onboarding solutions to communicate directly and seamlessly with the established HRMS.  The goal of speeding the impact of new employees by having them ready on day one was common to nearly everyone.  Many pointed out that the current forms in use in their organization don’t necessarily lend themselves to an electronic form.  Being careful to be on the lookout for terminology on the forms that the new employee will not be familiar with is also important.  Electronic onboarding brings a lot of leverage but careful planning and a close review of how things are being done with the manual methods are keys to success.


From the group’s discussions on the current economic situation it is clear most organizations are putting a significant amount of energy into keeping the best talent with the organization.  From directing the small pools of raises to top performers to making sure managers are providing regular feedback through performance reviews, HR teams are striving to help their organizations make sure that the top talent stays with the organization.  By and large most organizations have lost all of the people they could afford to lose and are focusing now on holding steady and managing attrition to lower levels.


I was reminded onced again that Client Advisory Boards are terrific ways to share common issues and bring fresh ideas to the table.  If you are not involved in a Client Advisory Board I would encourage you to consider joining one to bring more value to your HR team.  Plus, you can have direct input on your HR service provider’s offerings.

Thursday, October 14, 2010 7:53:43 AM (Central Daylight Time, UTC-05:00)  #    Comments [0] -
HR & Payroll

TALX recently held a webcast regarding the employment tax impacts of mergers and acquisitions. By understanding the complex nature of compliance requirements and planning strategies available, employers have the opportunity to minimize tax liability and payroll tax risk associated with potential noncompliance exposures at the federal, state and local levels.

The attached information is a summary of this event, for a link to the archive for a replay of this event please contact Pete Krieshok at 314-214-7325 or pkrieshok@talx.com.

October 2010 Webcast.pdf (214.41 KB)

Thursday, October 14, 2010 2:54:33 AM (Central Daylight Time, UTC-05:00)  #    Comments [0] -
Employer Tax Services
# Monday, October 11, 2010

Here’s some more great insight from our Client Relationship team.  While geared toward and sent to TALX clients, I thought our blog readers might find some useful information in the following as well.


10 Ways to Minimize Your Unemployment Costs


Unemployment taxes are one of the few taxes employers can directly control and tiny fluctuations in an employer’s tax rate can have large monetary effects. Like other taxes, unemployment taxes represent additional overhead, however most business taxes are fixed by law. Unemployment tax rates fluctuate based on the employer’s payroll and its ability to control the unemployment benefits charges against its account. An employer’s unemployment taxes go into a fund specifically for unemployment. The amount that is withdrawn from that account is what determines an employer’s tax rate. Therefore every unemployment claim that is not protested or lost has the potential to directly affect an employer’s tax rate.


Employers may directly impact their bottom line with a few strategic approaches to reducing unemployment costs. While perhaps these practices may be old news, they bear repeating since controlling all costs is critical, now more than ever, in the current economic climate.


1. Document, document, document


Effective documentation is crucial. Many times employers may have the burden of proof with the state agency. Documentation may help in matters outside UI such as EEOC matters and employment litigation. Documentation in discharges and voluntary quit situations is different. Reference TALX’s separation checklists illustrating best practices. Your CRM can provide additional copies. In the majority of cases involving discharge, documentation (meeting the burden of proof) is the only means an employer may have to back up the decision to terminate. Retain documents for at least 18 months. Provide policies to employees and obtain a signed acknowledgement of policies or any changes to policies.


2. Compose effective written warnings


Warnings are an aspect of progressive discipline that effectively ensures an employee understands what is expected of them. State unemployment agencies look for warnings, in most instances, to determine if the claimant was discharged for misconduct and effective, clear, non judgmental warnings help the employer meet the burden of proof in discharges. Elements of a good written warning include the violation, expected action to improve, the consequences if the standard is not met, employee’s action plan and comments, signature of employee, signature of witness, signature of issuer.


3. Manage your human resources wisely


Practices include performing detailed reference checks. Consistently use progressive discipline. Enforce rules and policies uniformly. Follow an employee’s progress from the moment they are hired. In addition, thorough talent assessment before hire will alleviate problems down the road. The TALX talent assessment division, pan, which delivers employee acquisition, evaluation and development solutions for corporate and government clients worldwide is a content aggregator with hundreds of assessments from more than 50 of the industry’s top test publishers. Pan can help reduce costs in the hiring and recruiting process as well as decrease turnover and its related costs. Please see http://www.panpowered.com/ 


4. Utilize your TALX partnership to full advantage


TALX is your partner and works with you at every stage of the unemployment process—claims, appeals, hearings, charge audits, best practices, unemployment reports and client education. Don’t hesitate to ask any questions of your service team or Client Relationship Manager. Insight web reporting provides the tools to stay abreast of unemployment activity and costs. TALX.com (http://www.talx.com) features ongoing blogs, e-seminars and industry highlights. Your contract may offer guidance, preparation and participation in hearings from contracted hearing representatives who will assist you in winning the appeal. Providing timely information and sufficient information to TALX, especially at the initial level of the claim, can help you avoid penalties, loss of appeal rights and being charged for benefits collected.


5. Track unemployment costs and budget appropriately


Use TALX reports and services to track claims, monitor potential liability and review past history to foresee budgets for unemployment taxes. Be familiar with the base period and benefit year in your states and use tax information provided by TALX to ensure budgets are adequate.


6. Know the difference between voluntary resignations, discharges and lack of work claims


A voluntary resignation, especially for non-compelling reasons, is usually disqualifying but there are significant exceptions. States may allow benefits for a quit with good cause.  In a voluntary quit, the burden of proof rests with the former employee. A discharge for misconduct is defined as willful misconduct connected with the work which resulted in a tendency for damage to the employer’s interests. A discharge in which the employer initiates the termination puts the burden of proof on the employer. In discharges avoid the use of unsatisfactory performance in cases where the employee is able to perform the job and is negligent of performing their duties. In discharges due to misconduct be prepared to provide the final incident which led to the discharge. Lack of work claims provide benefits to individuals who are separated from work due to no fault of their own and are the reason unemployment insurance was created. A claimant must be able to work, available for work and actively seeking work.


7. Be prepared for hearings


Hearings require first-hand testimony as to the facts and events under consideration. Hearsay evidence is generally not persuasive and may not be considered at all. Depending on your contracted services, provide all information to your TALX hearing representative when they contact the individuals at your organization to prepare for a hearing. Have all documents readily available during the hearing.


8. Appeal when warranted


An appeal is your request to the state to assign a hearing officer to review the facts of a particular case because you believe the eligibility rules have not been properly applied. Appeal if you disagree with a decision allowing the claimant benefits. You must be prepared to present facts and evidence.


9. Weigh the consequences of partial employment, layoffs and independent contractors


Know when employees are eligible for partial weeks of unemployment. Your CRM can provide you with a listing of state-specific guidance. In the case of layoffs, helping severed employees find jobs benefits the employer and employee. Independent contractors may file for unemployment and the employer needs to be able to prove he or she is not an employee of your company.


10. Consider reemployment strategies


Helping transitioning employees find another job rapidly after a staff reduction, position elimination, or other involuntary, non-misconduct separation can help control the duration of non-protestable claims – the claims that normally result in the longest duration and highest total benefit payout. TALX Reemployment Services can help by providing faster reemployment through one-on-one job coaching, e-learning, and other key outplacement elements. Visit http://www.talx.com/Solutions/Compliance/UnemploymentTax/  for more information.


Tammy Mullin 

Monday, October 11, 2010 8:40:48 AM (Central Daylight Time, UTC-05:00)  #    Comments [0] -
Unemployment Cost Mgmt
# Wednesday, October 06, 2010


By: Dave Fowler

Information, misinformation, and gossip travel quickly over any industry grapevine and the world of immigration is no exception. Sometimes the information on the grapevine is correct and sometimes it’s not. It’s difficult to discern.  Here is some grapevine fodder to consider regarding the recent $1 million fine assessed on clothing retailer Abercrombie & Fitch for violations of the employer's obligation to verify the employment eligibility of its employees. According to the grapevine, a faulty audit trail for electronic Forms I-9 may be to blame.

The final electronic Form I-9 rule does not require the employer to retain audit trails of each time a Form I-9 is electronically viewed. However, the employer must retain an audit trail when a Form I-9 is created, completed, updated, modified, altered, or corrected. Generally, an audit trail is a record showing who has accessed a computer system and the actions performed within or on the computer system during a given period of time. The employer must ensure that whenever the electronic Form I-9 record is created, completed, updated, modified, altered, or corrected, a secure and permanent record is created that establishes the date of access, the identity of the individual who accessed the electronic record, and the particular action taken.

The kicker is that, according to the electronic I-9 rule, the employer must establish the authenticity and integrity of the Forms I-9 such as audit trails and insufficient or incomplete documentation (e.g., a non-compliant audit trail) is a violation of section 274A(a)(1)(B) of the Act. So, according to the grapevine, the issue may have been that since the audit trail was not compliant, all Forms I-9 completed electronically were considered invalid and therefore, the employer was deemed to have violated the regulations by not having Forms I-9 on file for the employees.

So, when developing your own electronic Form I-9 process or evaluating a third-party product, take the time necessary to evaluate all aspects of the product to make sure it complies with the final regulation regarding electronic Forms I-9.

October 12, 2010 Update:

ICE fines Abercrombie & Fitch based on its electronic I-9 system (Seyfarth Shaw LLP)

Wednesday, October 06, 2010 1:15:16 PM (Central Daylight Time, UTC-05:00)  #    Comments [0] -
# Tuesday, October 05, 2010

Due to the unprecedented burden placed on the unemployment system , states have depleted unemployment trust funds and as of August 12, 2010, thirty-two (32) states (including the Virgin Islands) are currently taking Title XII loans from the federal government to pay unemployment benefits. As a result, states are looking to increase tax revenues through legislative actions, mandatory increases already built into tax statutes and aggressive collections efforts.

However, there are certain unemployment tax planning strategies that can be utilized which may have a substantial impact on unemployment tax rate reductions. A voluntary contribution is a tax technique that should be reviewed annually for tax savings opportunity. The attached Tax Intelligence was recently sent to our employers.

Tax Intelligence August 2010.pdf (384.78 KB)


Tuesday, October 05, 2010 1:37:22 PM (Central Daylight Time, UTC-05:00)  #    Comments [0] -
Employer Tax Services

Several months ago, the US DOL proposed changes to the Final Rules on Title XII Cash Flow Interest Free Borrowing. These rule changes were finalized on September 17, 2010.

The significance of the new regulation is that “cash flow loans”, interest free Title XII loans to state UI trust funds, are going to be harder to get in the future. Prior to this ruling, if an agency borrowed under Title XII, no interest was due if the borrowing occurred after January 1st of a calendar year and the loan was repaid by September 30 in the same year and the agency avoided further borrowing through the balance of the rest of the same calendar year.

With the new ruling, beginning in 2014, a state applying for a Title XII advance will have to demonstrate that trust fund reserves were at least at the 0.50 AHCM level in one of the past five years prior to applying for the advance. This standard will increase in 0.10 increments each year until the required AHCM level reaches 1.0 in 2019. Second, the state will have to demonstrate that no reduction in taxation effort occurred during the period that the AHCM was met and the date of the request.

Not stated in the regulation, however, is a third important change. You will recall that AHCM or Average High Cost Multiple is essentially a measure of UI trust reserves equal to a one year payout of benefits based upon the average yearly payout of the last three most severe recessions in the past 20 years. Up until this recession, that level of funding had remained fairly constant. When this recession is officially declared over, it will replace one of the three in the current average. In other words, a AHCM of 0.50 – 1.0 will be much more in 2014 than those same values in 2008.

The average AHCM for the US, reported in the Q3/2009 USDOL UI Data Summary was 0.40. Since then, the agency has not reported a AHCM value as Title XII advances have exceeded net total cash reserves in state UI trust funds since Q4/2009. The AHCM value for the US was 0.52 at the onset of the present recession.

The action taken by the agency is in line with the report issued by the GAO in May, 2010. That report indicated that UI financing at the state level was directly responsible for the trust fund insolvencies that occurred in this recession. By making cash flow loans more difficult to obtain and giving significance to the AHCM measure as well as future tax increases, the USDOL has accomplished some of the objectives set out in the GAO report calling for more forward funding (higher reserves) in state UI trust funds. You’ll also recall that the GAO strongly recommended a significant increase in the FUTA wage base which would also impact state taxable wage bases. More to follow…

Steve Carter
Assistant Director
Government Relations - Tax

Tuesday, October 05, 2010 1:33:42 PM (Central Daylight Time, UTC-05:00)  #    Comments [0] -
Employer Tax Services

IRS CIRCULAR 230 DISCLOSURE: Any tax advice in this communication is not intended or written by TALX to be used, and cannot be used, by a client or any other person or entity for the purpose of (i) avoiding penalties that may be imposed on any taxpayer or (ii) promoting, marketing, or recommending to another party any matters addressed herein.

<October 2010>
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