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Unemployment Compensation Cost Control Best Practices from the Experts at Equifax

Set up to assist out of work individuals, unemployment compensation began long ago with the Social Security Act of 1935. The premise seems simple: the state of Georgia grants benefits to individuals who find themselves out of work through no fault of their own. Then why do these situations become so complex for cities? Through appeals and hearings, cities often find themselves on the losing end of a termination and have to pay out benefits.

Marci Beatty and Donny Phillips from Equifax Workforce Solutions recently talked with GMA about unemployment compensation cost control and reduction best practices and why cities need to use GMA’s program to protect themselves—and their budgets.  

Be Clear About What Kinds of Termination Require You to Pay Benefits 
Many cities assume that a good termination and denial of unemployment benefits are the same. However, from the state of Georgia’s perspective a good termination means termination for willful misconduct. The onus is on the city to prove willful misconduct. That means a good business termination doesn’t always mean that the employee is going to be disqualified.

Performance-related cases cause the most issues and frustration for cities. Simple work performance ineptitude (which can be very vague and subjective) will still lead to the terminated employee getting unemployment benefits. For the majority of discharge issues, the state of Georgia places a lot of weight upon the final incident that led to the termination. The state will want to see prior write-ups and warnings for specific issues, unless the termination was based on a singular event so egregious such as physical violence.

Because the employer has the burden of proof, here are some best practices that help put the city in the best position to prove willful misconduct in appropriate cases. These best practices assume the city is partnering with GMA and communicating with its Equifax Workforce Solutions representative. 

  • Document everything about the employee’s work history and termination. When a city discharges an employee, it needs to make sure it documents prior warnings, supporting information, and especially any information about the final incident. Equifax can provide that information to the state to defend the city’s case. This documentation is crucial for establishing willful misconduct to state adjudicators.
  • Work with Equifax first to provide any additional requested details before communicating with the state of Georgia. When Equifax receives the unemployment claim, the city’s claim representative will reach out to the city for details behind the separation. Cities should not directly communicate with the state without first having its Equifax claim representative involved. If Equifax is not brought into the loop at the very beginning, it makes it more challenging for them to step in either at the appeal point or further into the life of the claim.
  • Direct all ongoing unemployment compensation documentation to Equifax. City members should consult with their Equifax claim representative on additional documentation or anything they have supporting an unemployment claim. In the instance that an unemployment claim is sent directly to a city, it’s imperative that that claim is also directed to the Equifax claim representative. This ensures that Equifax captures all supporting documentation to help potentially protest an unemployment claim if needed.
  • Work with Equifax to create a game plan. Reach out to the Equifax claims representative to talk about the case or strategize about what the process may look like concerning a given separation. Per case, the process varies drastically. Consider talking to Equifax even before a termination is completed and how to process that termination.
  • Keep in constant communication with Equifax throughout the life of a claim. Communication with Equifax allows cities to make sure they are on top of everything, especially since sometimes things change from the state’s perspective or new legislation is introduced that may affect unemployment compensation.
The Process: How Equifax Assists Cities With Unemployment Claims
Cities benefit from the expertise of Equifax Workforce Solutions to help with much of the heavy lifting related to unemployment claim management and cost reduction. So that cities know how Equifax assists as part of GMA’s member service, here’s an overview of the process from when the individual files an unemployment claim.
  1. After the claim is loaded into Equifax’s system, Equifax looks to see if there are any separation details available. If Equifax lacks separation details associated with the claimant’s social security number, Equifax reaches out to its points of contact at the city to get more details behind the unemployment claim.
  2. If it’s a protestable claim, Equifax can file the protest on a city’s behalf. Once filed, Equifax needs all information and supporting documentation that the city has to support the case at the initial protest level.
  3. Ideally, the claim will be denied at the initial level. If so, the claimant still has the opportunity to appeal the case.
  4. If the claimant is able to collect, and if a city decides to appeal, then the Equifax claim representative will discuss the merits of the case with the city. Equifax will let the city know if it’s not likely to win the appeal and offers suggestions if there is any chance to win the appeal.
  5. If it’s determined that a city wants to appeal, then Equifax will file the appeal on the city’s behalf. At that point, a hearing should be scheduled.
  6. When the hearing is scheduled, Equifax will notify the city about any hearing details, offer pre-hearing consultation, and review details with any witnesses.
  7. After the hearing decision is rendered, Equifax would still be involved if there was a choice to file a second appeal at the board level.
At that point, Equifax basically just reviews what transpired and makes sure that everything was handled correctly.

Long-Term Unemployment Compensation Cost Control Best Practices
While claims seem to be the most important activity related to unemployment compensation cost control, it’s helpful to also look at some long-term best practices to help cities manage their costs.
  • Send quarterly charge statements to Equifax. When Equifax receives those charge statements, they will audit them line by line to make sure the city is being billed appropriately. That entails confirming that Equifax received and processed a claim, that the individual was awarded benefits, and that they’re being paid out accurately. If Equifax sees something that is questionable or shouldn’t be there, they’ll go back to the state and contest those charges until it’s resolved. These quarterly charges – along with any historical data the city can provide -- also enables Equifax to offer some level of budgeting assistance.
  • Take advantage of online technology tools and services. As part of GMA’s service, Equifax offers Case Builder, a user-friendly web-based application where members can proactively enter separation details, respond to an unemployment claim, upload supporting documentation, create reports, and check to make sure they are compliant with all laws and regulations. A member can also use Case Builder as another way to connect with their claim representative with any questions.
  • Proactively calculate costs for projected individual claims. Obviously, if a termination or layoff occurs, Equifax can help forecast costs. But many cities don’t even consider unemployment compensation claims in their budget. When there is a layoff or termination, cities are completely unprepared—especially when they lose a claim. Cities should budget for at least one claim a year for maximum potential liability and allowable benefits per claim (which in Georgia is $6600).
Cities Are Reimbursable Employers: So What Does That Mean?
For those city staff used to the world of business, they might assume that cities are contributory employers—paying a quarterly Unemployment Insurance Tax based on historical unemployment data. But cities are generally reimbursable employers, and that process works entirely different from the typical contributory employer tax.

Reimbursable employers do not pay a quarterly tax. Instead, they are billed quarterly whenever unemployment benefits are given by the state of Georgia to a former city employee or employees. This bill must generally be paid within 30 days or the city will be charged additional interest. Being a reimbursable employer might seem better than paying the regular quarterly taxes of a contributory employer. Many cities assume they make a good termination and think they’ll win an appeal, but they don’t. Then, they’re angry when they receive a bill from the state. Cities generally don’t budget for these reimbursable benefits, and that means the city must then pay thousands of unbudgeted dollars.

As a best practice, cities must budget for unemployment claims even if they are reimbursable employers. See the tips in the article “Unemployment Compensation Cost Control Best Practices from the Experts at Equifax” to help understand what cities should do to have the right processes and budgeting best practices as reimbursable employers.
CONTACT US ABOUT THE Unemployment Compensation Cost Control Best Practices from the Experts at Equifax
The bottom line results:
  • In 2016, Equifax Workforce Solutions processed 452 unemployment claims for program members taking advantage of the Unemployment Compensation Cost Control service.
  • GMA program participants save approximately $100,000 each year in potential unemployment payments to former employees.
  • Georgia cities win over 80% of the protestable claims filed by terminated employees.