Crack-down coming on new-hire reporting
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November 2, 2011 |
Only about 30 percent of Idaho employers comply
with the 1997 law requiring them to report newly
hired workers to the Idaho Department of Labor
within 20 days.
While the complying businesses are the largest
in the state and employ two-thirds of Idaho’s
workers, the failure of all employers to report
undermines the law’s purpose to identify people
who owe child support so their wages can be
garnished and the money recovered to support
their children. Since the law was passed, child
support collections through wage withholding
have jumped from less than a third to more than
half, and nearly 1,200 parents who have ignored
child support orders are being identified and
garnished every month.
But new hire reporting does more than help
reduce demand for welfare support. It also helps
the Department of Labor track down unemployment
insurance overpayments. Without 100 percent
compliance with the reporting requirement, it
can take months to identify claimants who have
continued collecting benefits after they have
returned to work. After that long, it becomes
increasingly difficult to actually recover any
of the overpayments.
The department’s compliance staff cross-matches
unemployment benefit recipients with the new
hire reports every week and will be doing that
cross-match every day by year’s end. This
cross-matching process prevents further benefit
payments to claimants who have returned to work
without alerting the department and triggers
investigations by department staff into why
these workers were still trying to collect
benefits. The department has recovered more than
$3 million in overpayments since the recession
began in December 2007.
Beefing up compliance with the new hire
reporting law is part of a long-range plan by
the department to crack down on benefit fraud
and overpayments. A special departmental task
force is being put together to implement this
strategic plan.
The department is stepping up education about
benefit and tax responsibilities for claimants
and employers; increasing staff training to
better assist claimants in complying with
unemployment benefit requirements; developing
new messaging services for employers to obtain
real-time information on employee separations;
linking directly to the IRS to recover
overpayments from federal tax refunds and
creating a new computer system for benefit and
tax payments to replace the existing system that
is over 30 years old.
In addition, the department is refocusing its
employer audits to detect misclassification of
workers as independent contractors and cases
where workers are being paid under the table to
avoid the unemployment insurance – and other –
taxes.
“Unemployment benefits play a critical economic
role in Idaho, ensuring that workers laid off
during severe recessions like this last one get
some assistance in paying their bills so they’re
still here when the economy picks up and
employers need them,” Department of Labor
Director Roger B. Madsen said.
“But the Department of Labor is committed to
making sure that benefits go only to those who
legitimately deserve them and in the amounts
they deserve,” Madsen said. “This integrity
initiative builds on the department’s already
solid record of controlling overpayments and
ensuring employers pay the unemployment taxes
they legitimately owe.”
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