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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.
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.
- 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.
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.
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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