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Changes to Pennsylvania's Unemployment Compensation Law: How They May Affect You

March 21, 2012
Act 6 of 2011 was signed into law on June 17, 2011. The new law makes significant changes to Pennsylvania's Unemployment Compensation Law. Many of these changes may affect you if you are separated from your employment.

First, Act 6 ensures the continuation of a federally funded, 13-week extension of unemployment compensation benefits. This prevents approximately 45,000 unemployment compensation claimants in Pennsylvania from losing their eligibility to collect an additional 13 weeks of benefits as of June 11, 2011. It also enables an additional 90,000 claimants in Pennsylvania to remain eligible throughout the remainder of the calendar year to collect the additional 13 weeks of extended benefits.

Though the new law extends unemployment benefits in Pennsylvania for an additional 13 weeks, it also makes it more difficult for new claimants to qualify for such benefits and reduces the amount of benefits claimants may draw if they do so qualify.

Act 6 freezes the maximum weekly benefit rate at $573 per week until the end of 2012, and allows only marginal increases in the maximum weekly benefit rate until 2018, or until Pennsylvania’s Unemployment Compensation Fund is no longer in financial distress.

The new law also increases the minimum weekly qualifying benefit rate from $35 to $70, preventing claimants whose weekly benefit rate is less than $70 from drawing unemployment benefits. A claimant’s weekly benefit rate is calculated based on the wages s/he was paid in his/her base year.

In order to qualify for unemployment benefits, claimants also must have worked a sufficient number of “credit weeks” during the previous base year. Current law provides that a credit week is any week in which claimants had earnings of $50 or more. Act 6 requires that claimants earn at least $100 for every credit week until December 31, 2014, and at least 16 times the Pennsylvania minimum wage rate for every credit week after January 1, 2015. The new law doubles the minimum credit week requirement through 2014, and at a minimum, quadruples it in 2015, which will prevent many claimants who would currently qualify for unemployment benefits from qualifying for such benefits in the future. The new law also increases the number of credit weeks necessary to qualify for benefits from 16 to 18.

In addition, Act 6 requires that claimants now undertake an active work search for suitable employment in order to qualify for benefits. Currently, there is no job search requirement for the regular 26-week state unemployment compensation program. To meet the new active work search requirement, claimants must:

Register for the employment search services offered by the Pennsylvania CareerLink system, or its successor agency, within 30 days of their initial application for benefits;
Post a resume on the system's database, unless they are seeking work in an employment sector in which resumes are not commonly used; and
Apply for positions that offer employment and wages similar to those they had prior to their unemployment and which are within a 45 minute commuting distance.

The work search requirements do not apply to claimants whose employers have laid the claimants off due to lack of work, and have advised the claimants of a date on which the claimants will return to work.

In addition to changes in the law’s eligibility provisions, Act 6 also includes a severance pay offset and provisions mandating automatic relief from charges for employers under certain circumstances. The Act delays the beginning of unemployment benefits until the exhaustion of severance pay exceeding 40 percent of the annual average wage. Current law does not address severance pay in the computation of benefits.

Under the Act, severance pay is defined as “one or more payments made by an employer to an employee on account of separation from the service of the employer, regardless of whether the employer is legally bound by contract, statute or otherwise to make such payments.” Severance pay does not include payments for pension, retirement, or accrued leave, or payments of supplemental unemployment benefits.

The severance pay offset is calculated by subtracting 40 percent of the “average annual wage” from the total severance pay amount. Currently, 40 percent of the average annual wage is approximately $18,000. Therefore, claimants may receive up to $18,000 in total severance pay before their unemployment compensation benefits are affected. Claimants receiving more than $18,000, however, will not be permitted to draw unemployment benefits until they have exhausted the amount exceeding $18,000. The amount of severance pay attributed as an offset in any given week will equal the claimant's regular full-time daily or weekly wage, and will begin with the first week immediately following the claimant's separation from employment.

For example, let’s assume a claimant whose regular full-time weekly wage is $500 is separated from his/her employment and receives severance pay unrelated to pension, retirement, or accrued leave in the amount of $20,000. The amount exceeding 40 percent of the current average annual wage of $18,000 is $2,000. Therefore, the claimant will not be permitted to draw unemployment benefits until four weeks ($2,000 divided by the claimant’s regular full-time weekly wage of $500) after his/her separation from employment.

The effective date of the Act’s offset provision is January 1, 2012. Severance agreements reached between an employer and employee in 2011 should not impact the employee's unemployment compensation benefits, even if the severance pay continues into 2012.

In addition to allowing an employer to offset severance pay against its obligation to pay workers' unemployment benefits, Act 6 also allows employers automatic relief from charges for ineligible claims, without the need for filing a written request with the Department, where a claimant is ultimately determined to be ineligible for benefits.

Act 6 also establishes shared work program. The program allows employers to voluntarily avoid layoffs by reducing the number of hours worked by employees in a specifically defined unit, which, in turn, allows employees in the affected unit to receive partial unemployment benefits for the reduced hours. The Act provides, however, that if any employee in an affected unit is covered by a collective bargaining agreement, the shared-work plan for that unit must be approved in writing by the employee’s collective bargaining representative prior to its implementation.

Finally, Act 6 permits either party to an unemployment compensation benefit appeal hearing to testify (at the hearing) via telephone, without regard to the distance of the hearing location. Currently, the law provides that parties may request telephone testimony; that referees may or may not grant the request; and that the requesting party must reasonably demonstrate an inability to personally testify due to compelling employment, transportation or health issues.

Although the law generally makes it more difficult for claimants to qualify for unemployment, it could have been worse, and would have been if not for efforts by labor to protect the rights of claimants seeking unemployment benefits. Act 6, in its original form, included provisions to not only increase many of the law’s minimum eligibility requirements, but also to disqualify claimants who voluntarily quit for reasons not attributable to employment, or for ordinary misconduct or negligence, rather than willful misconduct as currently provided.
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Changes in Pennsylvania Unemployment Benefit Law!!!!!!!!!!!!!!!!!!

Act 6 of 2011, which was signed into law on June 17, 2011, amended the Pennsylvania Unemployment Compensation Law in a number of ways. These changes include for the first time a severance pay offset against unemployment compensation benefits. Under the new law, "severance pay" is defined as:

one or more payments made by an employer to an employe on account of separation from the service of the employer, regardless of whether the employer is legally bound by contract, statute or otherwise to make such payments. The term does not include payments for pension, retirement or accrued leave or payments of supplemental unemployment benefits.

The offset is calculated by subtracting 40 percent of the "average annual wage" under the Unemployment Compensation Law from the total severance amount. Currently, this "40% of the average annual wage" calculation equals $17,853, which means that claimants can receive up to $17,853 in total severance pay before their unemployment compensation benefits are affected. The amount of the severance attributed as an offset in any given week will equal the claimant's full-time daily or weekly wage, and the offset begins with the first week immediately following the claimant's separation from employment.
The effective date of the Act's severance pay provision is January 1, 2012.

Can the determination of my Pennsylvania eligibility for benefits be appealed?

Yes. Either the Pennsylvania Unemployment claimant or the employer can appeal a determination by requesting a hearing before a Pennsylvania Unemployment UC Appeals Referee within 15 calendar days of the mailing date of the original determination.

The Referee’s decision may be appealed to the Pennsylvania Unemployment UC Board of Review within 15 calendar days of the mailing date of that decision. Any appeal of a UC Board of Review decision must be filed with the Commonwealth Court.

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Information supplied by the employer is used to determine if the claimant meets all of the non-financial requirements of the Law. Information will be reviewed and a written determination provided where an eligibility issue has been found. Benefits may be denied if a claimant:

voluntarily quit without necessitous and compelling cause;
is fired for willful misconduct;
is unable to work or unavailable for work;
has failed to apply for or accept suitable work;
is involved in a labor dispute other than a lockout;
is receiving unemployment benefits from another State or the Federal government;
has failed to report to file claims in a timely manner; or
is convicted and incarcerated.

In cases where a claimant voluntarily terminates his/her employment, the burden of proof is on the claimant to show the existence of necessitous and compelling reason(s) for quitting. If the separation is due to alleged misconduct, the employer is requested to provide a statement from an individual who has direct firsthand information concerning the incident(s) which caused the separation. The burden of proof is on the employer to prove that an act of willful misconduct was committed by the claimant in connection with the employment.

The next step is an Appeal - call us and we can explain everything

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Here is why it is SO VERY important to at least file an appeal with the 15 day time period!

The fifteen-day time period to appeal unemployment compensation determinations is mandatory and must be strictly applied. Renda v. Unemployment Compensation Board of Review, 837 A.2d 685 (Pa. Cmwlth. 2003). If an appeal from an unemployment compensation determination is not filed within fifteen days of the date the determination was mailed, the determination becomes final and the Board does not have jurisdiction to address the merits of the appeal. Id.

The Board’s regulations at 34 Pa. Code §101.82 provide the means for determining the date on which an appeal was filed. Pursuant to 34 Pa. Code.

6 Claimant also asserts that the referee refused to accept his sworn affidavit and that doing so was an error of law. However, we consider this argument to be moot, as the certified record reflects that the referee marked the affidavit exhibit C-1 and entered it into the record as evidenced below:

R. [Referee] Okay. Is there any additional testimony you wish to offer as to why your appeal should be considered a timely filed appeal?

C. [Claimant] That’s pretty much it. I have a – I did an Affidavit with everything, with the dates and everything else, and the mailbox that I put it in, and everything else.

R. Now this is basically an Affidavit based on the same testimony you just provided?

C. Yeah. Yeah. Just, you know . . .

R. Okay.

C. …just so it’s on paper, just stating the facts and everything.

R. All right. Well, this document is being marked as C-1. And C-1 is entered into the record.

(N.§101.82(b)(1), the filing date of an appeal sent via the United States Postal Service, is determined to be:

(i) The date of the official United States Postal Service postmark on the envelope containing the appeal, a United States Postal Service Form 3817 (Certificate of Mailing) or a United States Postal Service certified mail receipt.

(ii) If there is no official United States Postal Service postmark, United States Postal Service Form 3817 or United States Postal Service certified mail receipt, the date of a postage meter mark on the envelope containing the appeal.

(iii) If the filing date cannot be determined by any of the methods in subparagraph (i) or (ii), the filing date will be the date recorded by the Department, the workforce investment office or the Board when it receives the appeal.

Appeals can also be filed via common carrier, fax, other electronic communication, or personal delivery to a workforce investment office of the Board. 34 Pa. Code §101.82(b)(2)-(5).

The date of an appeal filed via fax transmission is considered to be:

(A) The date of receipt imprinted by the Department, the workforce investment office or the Board’s fax machine.

(B) If the Department, the workforce investment office or the Board’s fax machine does not imprint a legible date, the date of transmission imprinted on the faxed appeal by the sender’s fax machine.

(C) If the faxed appeal is received without a legible date of transmission, the filing date will be the date recorded by the Department appeal office, the workforce investment office or the Board when it receives the appeal.

34 Pa. Code §101.82(b)(3).

Here, the Department never received the appeal Claimant alleges he mailed; thus, the record contains no postmark, certificate of mailing, certified mail receipt, or postage meter mark to date the appeal. The only date of filing discernible under the regulations is January 12, 2011, the date the Department received Claimant’s faxed copy of his appeal. This date is well after the fifteen-day appeal period expired, and, therefore, there is no question that the appeal was untimely.

Claimant relies on Bass v. Commonwealth, 485 Pa. 256, 401 A.2d 1133 (1979) and Cook v. Unemployment Compensation Board of Review, 543 Pa. 381, 671 A.2d 1130 (1996) to support his argument that his appeal should be accepted nunc pro tunc.

In Bass, a secretary for the attorney who was to file an appeal from this Court to our Supreme Court fell ill on the day she was supposed to take the appeal to the courthouse. She left work early and was out of the office all of the next week, requiring treatment by a physician. Upon her return to the office, she saw that the appeal had not been filed, immediately took steps to correct the situation, and filed the appeal one day late. Our Supreme Court held that under such circumstances, where there was a ―non-negligent failure to file a timely appeal which was corrected within a very short time, during which any prejudice to the other side of the controversy would necessarily be minimal,‖ the appellant’s petition to file the appeal nunc pro tunc (―now for then‖) would be granted. Id., 485 Pa. at 260, 401 A.2d at 1135-36. Bass was not an unemployment case; rather, it was a lawsuit against prison officials filed by a woman whose husband was murdered by a furloughed prisoner.

In Cook, an unemployment claimant’s appeal was due on May 8, 1992. Cook had an appointment with an attorney scheduled for May 5, but on May 3, he collapsed and was hospitalized until May 9. His appeal was filed one day late, on May 9. The referee dismissed the appeal as untimely. The Board and this Court both affirmed, reasoning that Bass allowed a nunc pro tunc appeal only where the delay

was caused by non-negligent conduct of the appellant’s lawyer or his staff. However, our Supreme Court reversed, expanding its holding in Bass to unemployment appeals and to instances involving non-negligent conduct by the appellant. The Court held that:

where an appeal is not timely because of non-negligent circumstances, either as they relate to appellant or [appellant’s] counsel, and the appeal is filed within a short time after the appellant or [appellant’s] counsel learns of and has an opportunity to address the untimeliness, and the time period which elapses is of very short duration, and appellee is not prejudiced by the delay, the court may allow an appeal nunc pro tunc.

Id., 543 Pa. at 384-85, 671 A.2d at 1131.

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PENNSYLVANIA BOARD OF REVIEW APPEALS

I LOST MY PENNSYLVANIA UNEMPLOYMENT HEARING, WHAT CAN I DO NOW?

We receive many calls from folks that have lost their Unemployment Hearing before an Unemployment Referee, who would like to appeal that decision to the Pennsylvania Unemployment Board of Review. Here are 7 things to understand about appeals the the UCBOR:

WHAT IS THE PA UNEMPLOYMENT COMPENSATION BOARD OF REVIEW?

The UCBOR is made up of 3 people. These 3 people consider every single appeal filed by anyone contesting a decision made by a Referee following an Unemployment Hearing. There are many such appeals, and the overwhelming majority are rejected with limited discussion (if any discussion at all).

HOW DOES THE PA UNEMPLOYMENT COMPENSATION BOARD OF REVIEW DECIDE CASES?

Every Unemployment Hearing is recorded. Once an appeal is filed, a transcript of the proceedings is produced. The UCBOR reviews the transcript, and all exhibits that were introduced at the Hearing. Both parties have a right to file a brief explaining why they believe the Referee's decision is incorrect/correct. Any such briefs will be considered as well.

The UCBOR has reviewed thousands of appeals, and recognize nearly every fact pattern and legal issue presented. Referee's are similarly knowledgeable about fact patterns and the law; that is why a very low percentage (say less than 15%) of Referee decisions are overturned. The rate for the Unemployment Help Center is much higher – closer to say 70% winners.
If you did not have a skilled representative representing you at the Hearing, the percentages are lower. Why? Because the Board only considers legal issues that were raised before the Referee at the Hearing. So? Most reversals are due to legal arguments (as opposed to reversing credibility determinations made by the Referee), and attorneys best understand how to raise and preserve legal issues for an appeal,

WHAT CAN THE UNEMPLOYMENT COMPENSATION BOARD OF REVIEW DO WITH AN APPEAL?

Typically, it can 1) affirm the Referee's decision (just about always); 2) reverse the Referee's decision (rarely, but sometimes); or, 3) send the case back to the Referee to obtain evidence or to hold a new Hearing (very rare).

DOES THE UNEMPLOYMENT COMPENSATION BOARD OF REVIEW CONSIDER NEW EVIDENCE ON AN APPEAL?

Almost never. The parties on appeal are "stuck" with whatever testimony and evidence was presented at the initial Hearing before the Referee.

The only exception I have seen? Where an employee, after the Hearing, discovers evidence that he or she could not possibly have discovered prior to the Hearing that proves that the employer perjured itself at the Hearing. Don't count on this happening in your case -- it is very rare.

DOES THE PENNSYLVANIA UNEMPLOYMENT COMPENSATION BOARD OF REVIEW HOLD HEARINGS?

Never. All Pennsylvania Unemployment Hearings are held by Referees. The UCBOR rarely if ever considers new evidence on an appeal, and never conducts its own Hearing.

WHAT DO I DO IF THE UNEMPLOYMENT COMPENSATION BOARD OF REVIEW DENIES MY APPEAL?

You may appeal to the Pennsylvania Commonwealth Court. Unless you have been represented by counsel throughout your unemployment claims process, the likelihood of finding an attorney who will handle such an appeal for you is very low - any any such attorney will likely seek a substantial fee. Why? Because, again, any reversals are going to be based only on legal issues that were raised at the Hearing (and argued before the UCBOR), and attorneys are best suited to raise and preserve such arguments.

WHAT TYPES OF CASES ARE GOOD TO APPEAL TO THE UNEMPLOYMENT COMPENSATION BOARD OF REVIEW IN PA?

Typically, cases that were incorrectly decided via a misapplication of the law. In such cases, filing a legal brief can be very helpful.

Trying to prove that the Referee misunderstood facts, that he/she was wrong in making credibility determinations or that the Referee unfairly favored one side of the other are usually rejected out of hand by the UCBOR.
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**New Unemployment Case Law: Pennsylvania Commonwealth Court Upholds * Unemployment Board of Appeal's Ruling – Claimant was terminated and did not quit.**

In Baskin's Auto, Inc. v. Unemployment Board of Review the Pennsylvania Commonwealth Court upheld a ruling by the Pennsylvania Unemployment Board of Review finding that the Claimant was terminated and did not quit as the employer alleged. Here, the employer contended that Claimant quit his job when he did not return to work – NOT SO said the Unemployment Board of Review – the Employer said that that the claimant abandoned his position and that continuing work was available. The Board believed the Claimant that he was told to “go find other work>’ This was a termination not a quit

The law used for this case says:

Whether a termination of employment is voluntary is a question of law subject to this Court’s review. The failure of an employee to take all reasonable steps to preserve employment results in a voluntary termination. Westwood v. Unemployment Compensation Board of Review, 532 A.2d 1281 (Pa. Cmwlth. 1987). Good cause for voluntarily leaving one’s employment results from circumstances which produce pressure to terminate employment that is both real and substantial and which would compel a reasonable person under the circumstances to act in the same manner. Philadelphia Parking Authority v. Unemployment Compensation Board of Review, 654 A.2d 280 (Pa. Cmwlth. 1995).

We at the Unemployment Help Center run into this situation all the time. Our client was clearly fired (or terminated) yet the employer insists that the Claimant quit. If this is your situation you need to contact us today! Use the form below or call 610-972-6610

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