Ohio unemployment updates

Fraud update

In the wake of the COVID-19 pandemic, there have been significant increases in the number of unemployment claims being filed which are overrunning many state systems. The increased claim volumes, in conjunction with the additional benefits granted through the CARES Act and the Consolidated Appropriations Act of 2021, have resulted in a significant increase in identity theft and fraudulent unemployment claims.

Read more from our unemployment team on this topic in recent blogs: 

• Unemployment taxes, fraudulent claims and identity theft
• Unemployment fraud hits home – Be aware of fake claims

In an effort to prevent improper benefits from being paid on fraudulent claims, the Ohio Department of Job and Family Services (ODJFS) is asking employers and victims to begin reporting fraud via their newly designed fraud portal. The portal can be found at:  www.unemployment.ohio.gov. To report fraud, click the “REPORT IDENTITY THEFT” button and provide the information requested. By using this online portal, the claim will be flagged as a fraudulent claim and stop future benefits from being paid in error. The state is requesting that both the employer and the victim report the fraud via the portal.

1099-G forms

Some victims are first becoming aware of that a fraudulent unemployment claim was filed in their name when they receive a 1099-G form from ODJFS. If an employee has received a 1099-G from ODJFS and they did not file for unemployment benefits, advise them to report the identity theft immediately to ODJFS via the fraud portal mentioned above. Upon validating the claim was indeed fraudulent, ODJFS will issue an amended 1099-G. 

Note: Taxpayers should follow IRS guidelines regarding identity theft. Here is a link to the section of the IRS’s website that offers guidance to taxpayers regarding unemployment related identity theft:  https://www.irs.gov/newsroom/irs-offers-guidance-to-taxpayers-on-identity-theft-involving-unemployment-benefits

Fraud chargeability

Benefits paid out in claims that have been deemed to be fraudulent will not be charged directly to tax-paying employers. The costs will be mutualized and not directly impact an employer’s unemployment tax rate.

However, reimbursing employers (cities, counties, public school districts, townships, other public entities and non-profits that elected to become reimbursing for unemployment) will be charged for any fraudulent benefits until ODJFS recoups the funds, either from the perpetrator or the bank. As a result, it is extremely important to notify the state of fraudulent claims as soon as possible in order to prevent benefits from being issued.

COVID-19 claims update

During the pandemic, ODJFS had been mutualizing benefit charges for contributory (taxable) employers, thus relieving tax paying employers of charges. This practice will be discontinued for new unemployment claims filed with an effective date on or after 11/29/2020. Therefore, ODJFS will return to its normal practice of proportionately charging claim costs to base period employers. 

Any benefits paid in claims that were filed between the start of the pandemic up through 11/29/2020 will continue to be mutualized for the life of the claim.

If you have any questions please send them to: unemploymentsecureemail@sedgwick.com.

American Rescue Plan Act of 2021 

The President signed the American Rescue Plan Act of 2021 (ARPA) on March 11, 2021 which extended many of the unemployment-related provisions originally passed in the Coronavirus Aid, Relief and Economic Security Act (CARES Act) and the Consolidated Appropriations Act (CAA) through September 2021. Below is a summary of extensions and amendments:

Employer provisions:

The ARPA continues 100% funding of Short Time Compensation/Shared Work benefits through September 6, 2021. Short Time Compensation programs provide employers with an alternative to laying off employees. Employees' jobs are preserved with a reduction in hours and those employees are eligible for partial unemployment benefits.

ARPA also extends the federal funding of benefits paid by reimbursing employers (governmental entities and nonprofit organizations) through September 6, 2021. The ARPA also increases the reimbursement rate to 75% of benefits for weeks beginning after March 31, 2021 through weeks ending on or before September 6, 2021. Note: Under the CARES Act, the reimbursement rate was 50%.

The Act continues the federal funding of the first week of unemployment benefits at the rate of 50% of benefits. 

Pandemic Unemployment Assistance (PUA):

PUA provides unemployment benefits to individuals who are not eligible for regular unemployment compensation or extended benefits. It covers individuals who are unable to work due to COVID-19 related reasons, self-employed individuals, as well as individuals with insufficient work history to qualify for regular unemployment benefits. PUA benefits will continue to be funded by the federal government. The ARPA extended benefits from 50 weeks to 79 weeks and through the September 6, 2021.  

Pandemic Emergency Unemployment Compensation (PEUC):

PEUC provides federally funded extended benefits to those individuals that have exhausted regular state benefits. The ARPA grants an additional 29 weeks of benefits over the 24 weeks that were granted in the CARES Act and the CAA, for a total 53 weeks of benefits. The eligibility period was extended from March 14, 2021 to September 6, 2021.

Federal Pandemic Unemployment Compensation (FPUC):  

FPUC grants individuals that are collecting unemployment benefits an additional $300.00 per week. FPUC benefits are fully funded by the federal government and will cover weeks of unemployment beginning after December 26, 2020 and ending on or before September 6, 2021.  

If you have any questions regarding any of these provisions, please contact us at: unemploymentsecureemail@sedgwick.com.