Unemployment Insurance in Missouri: Should Employers Respond to Claim Notices?

New regulations require Missouri employers to respond timely to information requests regarding unemployment insurance compensation. The federal Trade Adjustment Assistance Extension Act (“TAAEA” or the “Act”) of 2011 requires, among other things, that states increase employers’ duties regarding unemployment compensation claims. Specifically, the Act provides that states must require employers to respond timely and adequately to Claim Notices, information requests from state agencies relating to unemployment benefit compensation claims. It also requires states to charge the unemployment accounts of employers that repeatedly fail to respond to Claim Notices for unemployment benefits paid to ineligible former employees.

In Missouri, an employee that satisfies all the unemployment insurance benefit eligibility requirements may still be disqualified from receiving benefits for voluntarily quitting without good cause or for being discharged for work misconduct. Once a terminated employee files a claim for unemployment benefits, the Missouri Division of Employment Security (“DES”) mails the former employer a Claim Notice, which requires a response within 10 days. The Claim Notice permits the employer to protest an unemployment benefits claim because the former employee quit voluntarily or was discharged for misconduct. If the claim is not in dispute, the employer must still respond to acknowledge the claim.

Some employers routinely fail to respond to Claim Notices. They may systematically choose not to respond to Claim Notices to avoid becoming involved in a former employee’s benefits appeal. Or they may already be paying unemployment taxes at the highest rate. Due to this lack of responsiveness, the federal government is using the TAAEA in an attempt to shift the burden of unemployment benefits paid to ineligible employees to the accounts of those employers responsible.

Missouri House Bill No. 611 was designed to make Missouri compliant with the TAAEA. However, because it included additional changes to the state’s Unemployment Insurance program, Governor Jay Nixon vetoed the bill in July 2013. Missouri became one of only a few states that failed to pass a law complying with the TAAEA, which went into effect on October 21, 2013. The Act indicates that states which fail to comply with the new federal mandate may lose federal subsidies for benefits.

Fortunately, to avoid such penalties, the Missouri Department of Labor and Industrial Relations (“DOL”) enacted an emergency rule to comply with the federal requirements. On October 1, 2013, the Missouri DOL implemented Emergency Regulation 8 C.S.R. 10-4.210 to make Missouri’s unemployment insurance program TAAEA compliant. This emergency regulation requires the Missouri DES to charge the accounts of employers that repeatedly fail to respond to Claim Notices regarding unemployment benefits paid to ineligible former employees on or after October 1, 2013 and brings Missouri’s unemployment insurance into compliance with the TAAEA.

Under the emergency regulation, when an erroneous payment is made to a terminated employee from the unemployment compensation fund beginning October 1, 2013, Missouri will not charge the employer if:

(i)      the employer or agent responded timely or “adequately” to a written request from the division for information and

(ii)    the employer or the employer’s agent did not engage in a “pattern of failing” to respond “timely” or adequately to requests.

Explanation of Terms:

• Adequately: “Including sufficient facts for the deputy to reach the conclusion ultimately and finally made in regard to the claim”
• Pattern of filing: “The number of failures during the year prior to the request is fewer than two (2) or less than two percent (2%) of the requests, whichever is greater”
• Timely: “The information must be postmarked or received by the division on or before the date provided in the request for information”

Posted by Attorney Ruth A. Binger. Binger serves both emerging and mature businesses concentrating in corporate law, intellectual property and technology law, digital media law, and labor and employment law. Her commitment to the success of small to medium-sized businesses, and her understanding of multi-faceted issues inherent in operations, are what distinguish Binger’s practice.