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Unemployment Compensation

Unemployment Compensation: Employer Services

PA Open for Business, http://www.paopen4business.state.pa.us/portal/server.pt/community/online_business_registration/8778

Find out how and when to file
and pay UC taxes

What's New in UC

March 2012

2012 Unemployment Contribution Rate Notice Mailing

The department's Mailing of Pennsylvania Unemployment Contribution (UC) rate notices for 2012 was completed March 1, 2012. Unfortunately, some employers who should not have received a delinquency rate received one in error. Read more

SHARED-WORK PROGRAM

In March 2012, Pennsylvania implemented a new Shared-Work Program. The Shared-Work program allows an employer to temporarily reduce the work hours of a group of employees as an alternative to a lay-off. Employees covered by the plan receive a percentage of their UC Weekly Benefit Amount, or WBA, while they work the reduced schedule, if they are otherwise eligible for UC.

The percentage by which each employee's work hours are reduced is called the "reduction percentage." The employer determines the reduction percentage. It must be at least 20 percent and cannot exceed 40 percent. The reduction percentage must be the same for all employees participating in a Shared-Work plan. For example, if an employee normally works 40 hours per week, and the reduction percentage is 20 percent, then the employee's hours are reduced by 20 percent and he or she would work 80 percent of 40 hours, or 32 hours per week. If an employee in the same unit works 30 hours per week, then he or she would work 80 percent of 30 hours, or 24 hours per week.

For each week included in the plan, an employee receives a percentage of his or her UC WBA equal to the reduction percentage. For example, if the employee's WBA is $400 and the employee's hours are reduced by 20 percent under the plan, the employee would receive 20 percent of $400 or $80 in Shared-Work UC.

The employer implementing a Shared-Work plan will be charged 100 percent of the UC paid to participating employees within the effective period of the plan.

If you have questions regarding this program, please contact 877-785-1531.

Forms:

February 2012

Reduction of FUTA Credit

Important Information Regarding Federal Unemployment Compensation Taxes

The Federal Unemployment Tax Act (FUTA) imposed tax is 6.2 percent on wages paid through June 30, 2011 and 6 percent of wages paid during the remainder of the calendar year. The FUTA tax is imposed on the first $7,000 of wages paid to each employee per calendar year. Normally, employers may claim a credit against their FUTA tax for contributions paid under the state Unemployment Compensation statute, up to an amount equal to 5.4 percent of wages paid.

However, on Jan. 1, 2011 the commonwealth marked the second consecutive year with an outstanding loan balance to the federal government, currently at $3.123 billion. This outstanding debt causes an automatic FUTA credit loss of .3 percent for payments relating to 2011 wages. Therefore, employers will see their FUTA tax liability go from .6 percent to .9 percent on Jan. 1, 2012. An additional .3 percent in FUTA credit will be lost every year until the commonwealth eliminates its outstanding debt to the federal government.

The additional FUTA tax for 2011 will be collected in January 2012 with the filing of your annual federal Form 940 tax return.

Questions regarding the reduction of the FUTA credit can be directed to the IRS website at www.irs.gov/businesses. You may also call the IRS Business and Special Tax Line at 800-829-4933.

Changes to Credit Week Reporting

On June 17, 2011, Governor Corbett signed into law SB 1030, designated as Act 6 of 2011. Act 6 changed the definition of "credit week." Beginning with the fourth quarter of 2011, any calendar week in which an employee earns $100 or more must be reported as a credit week for the employee.

Prior to Act 6, a credit week was any week in which an employee earned at least $50.

Only one credit week may be reported for each calendar week.

Mandatory Electronic Filing Delayed

Because the new Unemployment Compensation Management System, or UCMS, is not yet available, employers and employer representatives should continue to file quarterly reports — including reports for the quarter ending March 31, 2012 — using magnetic media or e-TIDES at www.etides.state.pa.us until further notice.

Note: New e-TIDES registrations for Unemployment Compensation are no longer being accepted by the Department of Labor & Industry. The Department is accepting paper UC-2/2A forms and magnetic media for UC-2A wage information.

All employers and their representatives will be notified when the new UC system becomes available. At that time, paper forms will be phased out and employers will be able to register to file quarterly UC wage and tax reports electronically. This supports the efforts of the new UC tax system to standardize the collection of wage data and employer contributions, increase employers' self-service options, improve the accuracy of data and make processing more efficient and less expensive to employers and the commonwealth.

For more information on the new UC tax system, please visit the UCMS Web page, or call the UC Employer Contact Center toll-free at 866-403-6163 or within the Harrisburg area 717-787-7679. Employer questions regarding the new UC tax system should be submitted in an e-mail to uc-news@pa.gov.
Employer Information Form (UC-1609P) - This simple form can prevent delays and wrong financial determinations, and save your company money and time.

Important information for employers on Emergency Unemployment Compensation (EUC) and Extended Benefits (EB)

Emergency Unemployment Compensation

Claimants who established a UC benefit year that ends on or after May 1, 2007, may have qualified for federal Emergency Unemployment Compensation (EUC). EUC benefits may be paid at the same rate that regular UC was paid. EUC benefits are 100 percent federally funded and are not charged to employers.

The number of tiers of EUC authorized and total amount of EUC payable is dependent on Pennsylvania's Total Unemployment Rate, or TUR, effective at the time. Pennsylvania's future TURs are currently unknown and will be determined later. The number of weeks available during the designated time periods is based on the claimant having already started the particular tier during that time period.

Due to improving economic conditions in Pennsylvania, the TUR has dropped below 8.5 percent and Tier 4 benefits are no longer available to claimants who exhaust Tier 3.

The last week payable under the EUC program is Dec. 29, 2012.

This chart represents weeks available to individuals with 26 weeks of regular UC

	Week ending May 26, 2012	Week ending June 2, 2012 through week ending Sept. 1, 2012	Week ending Sept. 8, 2012 through week ending Dec. 22, 2012
Tier 1
Weeks	20	20	14

Tier 2
Weeks	14	14	14

Tier 3
Weeks	13	13	9

The availability of these tiers is dependent on Pennsylvania's unemployment rate which must meet a certain threshold mandated by law. Once you begin a tier, a drop in the unemployment rate will not affect the number of weeks you may receive.

No tier can begin after the week ending Dec. 22, 2012.

After week ending Dec. 29, 2012, EUC benefits are not payable regardless of any remaining balance on the claim.

Extended Benefits

Extended Benefits (EB) are additional weeks of unemployment compensation payable to qualified workers when certain adverse economic conditions exist in Pennsylvania. These conditions are based upon the state's unemployment rate reaching a certain level prescribed by the Pennsylvania UC Law. When these conditions exist statewide, the Department of Labor and Industry declares an EB period. Starting with the week ending Feb. 21, 2009, a state Extended Benefit period began in Pennsylvania.

Regular EB

The total amount of regular EB that a claimant may receive is 50 percent of the amount of regular UC the claimant was financially eligible to receive on the claimant’s most recent claim for regular UC. If the claimant was financially eligible for 26 weeks of regular UC, the claimant may be financially eligible for 13 weeks of regular EB, and if the claimant was financially eligible for 16 weeks of regular UC, the claimant may be financially eligible for 8 weeks of regular EB. However, EB may only be paid for weeks ending during an EB period.

EB is expected to trigger off during late April 2012, and end three weeks later during May. The last payable week of regular EB is expected to be week ending May 12, 2012.

"HUP" EB

The Pennsylvania UC Law was amended to increase the maximum amount of EB a claimant may receive if Pennsylvania enters a "high unemployment period," or HUP. A HUP occurs when Pennsylvania's total unemployment rate reaches 8 percent.

As a result of the HUP, if a claimant is financially eligible for 13 weeks of regular EB, the claimant’s financial eligibility is increased to 20 weeks. If the claimant is financially eligible for 8 weeks of regular EB, the claimant’s financial eligibility is increased to 12.8 weeks.

This increased amount of EB, called HUP EB, applies only to weeks within the HUP.

Claims for HUP EB are filed in the same way as claims for regular EB.

Pennsylvania's unemployment rate has decreased to a level insufficient to authorize Pennsylvania to pay HUP EB benefits. The last payable week of HUP EB was the week ending Feb. 18, 2012

Private Sector Employers

Normally, private sector employers, including non-profit employers, pay 50 percent of the cost of EB. The American Recovery and Reinvestment Act (ARRA) temporarily changed the cost allocation for EB for private sector employers. ARRA provides that the federal government will pay for 100 percent of the cost of EB for weeks of unemployment through the week ending Jan. 7, 2012.

State and Local Government Employers