Automatic Data Processing, Inc. · NASDAQ:ADP

Automatic Data Processing — UCMHR.com Webinar: Take Control of Unemployment Costs (February 2012)

56 slides from Automatic Data Processing's conference presentation, Feb 16, 2012

  1. Slide 1: Take Control of Unemployment Costs

    Take Control of Unemployment Costs Learn How to Turn Unemployment Compensation into a Competitive Advantage An ADP ® Webcast February 16, 2012 3 PM Eastern The information and materials provided in this webinar are for informational purposes only and not for the purpose of providing legal advice. Fu

  2. Slide 2: Housekeeping

    Housekeeping  This is one of a number of complimentary webinars that ADP offers to finance and HR professionals each year.  Today’s webinar will last for 60 minutes, ending at 4pm Eastern.  The last 10 minutes of today’s program have been reserved for Q&A.  A PDF copy of today’s slides is availa

  3. Slide 3: About ADP

    About ADP Over 570,000 clients worldwide Pays 1 out of 6 in the U.S. 33M worldwide Founded in 1949 Went public in 1961 45,000 Associates  Revenues of approximately $10 Billion In 60+ Countries 1 of 4 AAA Rated U.S. Industrial Companies Electronically ‘moving’ (by Standard & Poor’s & Moody’s) $1 Tri

  4. Slide 4: Credit

    Credit  Are you planning to apply for CPE and/or RCH credits for attending today’s webinar? A. CPE Credit Only D. No B. RCH Credit Only E. Not Applicable C. Both CPE & RCH Credits NASBA® (National Association of State Boards of Accountancy) and APA (American Payroll Association) requirements for re

  5. Slide 5: What Are Our Goals For Today?

    What Are Our Goals For Today?  National Unemployment Trend  Effect of Economy on Unemployment Factors  Unemployment Tax Administration  UI Integrity  Understanding Separation Issues  Unemployment Basics  The Unemployment Process  Understanding the Board of Review 5 © 2012 ADP, Inc.

  6. Slide 6: National Unemployment Trend

    National Unemployment Trend 6 © 2012 ADP, Inc.

  7. Slide 7: Total Unemployment Rate Second Quarter 2011

    Total Unemployment Rate Second Quarter 2011 0.0% - 3.9% TUR (0 Jurisdictions) 4.0% - 5.9% TUR (4 Jurisdictions) 6.0% - 7.0% TUR (6 Jurisdictions) 7.1% - 9.9% TUR (28 Jurisdictions) 10.0% ≥ TUR (14 Jurisdictions) The Total Unemployment Rate (TUR) Source: is the rate computed by dividing Total U.S. De

  8. Slide 8: Unemployment Compensation – Weekly Benefit Review

    Unemployment Compensation – Weekly Benefit Review Traditional Unemployment Benefits 26 13 - 20 = 46 weeks Maximum Weeks in most states State Extended Benefits Emergency Unemployment Compensation Program (EUC 08) 26 13 13 - 20 = 59 weeks EUC 08 Program (Amended) – The Extension Act 26 13 7 13 13 - 20

  9. Slide 9: Effect of Economy on Unemployment Factors

    Effect of Economy on Unemployment Factors 9 © 2012 ADP, Inc.

  10. Slide 10: Polling Question #1

    Polling Question #1  How many billions of TITLE XII loans are outstanding as of 2011? A. $157B B. $15B C. $37.7B D. $85B E. Not Applicable/Don’t Know NASBA® (National Association of State Boards of Accountancy) and APA (American Payroll Association) requirements for receiving CPE and/or RCH Credit:

  11. Slide 11: Unemployment Trust Fund Solvency

    Unemployment Trust Fund Solvency $37.7 Billion in Outstanding Title XII Loans Assessment as of December, 2011 Solvent Trust Funds (23 Jurisdictions) Insolvent Trust Funds (28 Jurisdictions) At Risk Trust Funds (2 Jurisdictions) * Jurisdictions include 50 U.S. States, DC (Solvent), PR (Solvent), and

  12. Slide 12: Federal Unemployment (FUTA) Tax Review

    Federal Unemployment (FUTA) Tax Review  Federal tax used for administration of state unemployment programs  Since 1976, employers pay 0.8% of the first $7,000 each employee earns in a calendar year up to $56 per employee. As of July 1, 2011 employers will now pay 0.6% of the first $7,000 or $42 pe

  13. Slide 13: Unemployment Tax Administration

    Unemployment Tax Administration 13 © 2012 ADP, Inc.

  14. Slide 14: Unemployment Tax and Benefit Review

    Unemployment Tax and Benefit Review 14 © 2012 ADP, Inc.

  15. Slide 15: Unemployment Tax Cost – State Example

    Unemployment Tax Cost – State Example Illinois 2011 Merit Rating 8.4% $12,740.00 $1,070.16 Employer Rate $89.18 $13,806.00 * *$17,258 with Extended Benefits 0.7% 15 © 2012 ADP, Inc.

  16. Slide 16: The Tax Cost of One Rate Bracket

    The Tax Cost of One Rate Bracket  Taxable Wage Base in Illinois is $12,740  XYZ pays taxes only on the first $12,740 that each employee in Illinois earns in a calendar year  XYZ has 1000 employees in Illinois for a total of $12,740,000 in taxable wages  XYZ’s unemployment tax rate in 2011 was 2.

  17. Slide 17: UI Integrity

    UI Integrity 17 © 2012 ADP, Inc.

  18. Slide 18: UI Integrity – Purpose

    UI Integrity – Purpose • Improve Program Efficiency Primary • Reduce UI Overpayment Rates • Accuracy Purpose • Compliance • Modernize UI Tax and Benefit Systems Goals • Prevent, Detect, and Recover UI Overpayments 18 © 2012 ADP, Inc.

  19. Slide 19: Polling Question #2

    Polling Question #2  How much of the nearly $38B in outstanding TITLE XII loans are projected to have been paid to claimants in error ? A. $11.2B E. Not Applicable/Don’t Know B. $17.5B C. $9.8B D. $15.1B NASBA® (National Association of State Boards of Accountancy) and APA (American Payroll Associat

  20. Slide 20: Overpayments by State FY10

    Overpayments by State FY10 20 © 2012 ADP, Inc.

  21. Slide 21: UI Integrity History

    UI Integrity History  Federal UI Integrity provisions continue to be reviewed year over year – 2006 – Federal proposal requiring states to amend UI Law to prohibit non-charging of an employer for overpayments resulting from untimely or insufficient claim responses – 2007 – Federal proposal prohibit

  22. Slide 22: Federal UI Integrity Includes…

    Federal UI Integrity Includes…  States retain up to 5% of recovered overpayments and contributions collected due to employer fraud & misclassification to use for integrity activities  15% penalty required for amounts overpaid due to claimant fraud  Requires charging employers if overpayment due t

  23. Slide 23: UI Integrity States

    UI Integrity States  UI Integrity assists in controlling claimant overpayments caused by insufficient and untimely responses from employers/agents – When claimants are overpaid, those benefits are often socialized & paid from a “general fund” which causes higher tax rates for all employers to reple

  24. Slide 24: Technology

    Technology  States needed a resolution for some of the challenges they were facing, including: – Lack of resources – Increased workloads – Staff reduction – Legacy systems needed modernization  UI SIDES is the Answer!  ADP has been involved with UI SIDES from the beginning 24 © 2012 ADP, Inc.

  25. Slide 25: History of SIDES

    History of SIDES  Initial Eligibility Determinations – USDOL, States, Employers and Third Party Administrators very interested in improving timeliness and quality of information regarding reasons for job loss information – National Association of State Workforce Agencies, Unemployment Insurance Com

  26. Slide 26: What is SIDES

    What is SIDES  State Information Data Exchange System  Web based data exchange between state Unemployment Insurance agencies and employers & third party administrators  Computer to computer exchange  Website and Web services Secure exchange  Authentication Certificates  Encrypted records and f

  27. Slide 27: SIDES Operational Status – Initial Eligibility

    SIDES Operational Status – Initial Eligibility States States in Pending States in Development: Production: Production: • Arizona • Rhode Island • Alabama • Nevada • Colorado • New York • Delaware • New Hampshire • Georgia • Florida • North Dakota • Michigan • Iowa • North Carolina • Mississippi • Id

  28. Slide 28: Advantages of SIDES

    Advantages of SIDES  Secure Electronic Exchange  Single point of contact for both states and employers  Standard format for data w/ edits and validations  Error handling / confirmation of receipt  Quality and timely information  Electronic storage and retrieval  Significant % of determination

  29. Slide 29: Polling Question #3

    Polling Question #3  Given the current economic situation which factors do you think can be controlled by employers ? A. FUTA Tax Credit B. State Taxable Wage Base C. SUI Tax Rates D. State Legislation E. Not Applicable/Don’t Know NASBA® (National Association of State Boards of Accountancy) and APA

  30. Slide 30: The Basics of Unemployment

    The Basics of Unemployment 30 © 2012 ADP, Inc.

  31. Slide 31: The Unemployment Process

    The Unemployment Process • Resignation Claimant • Discharge • Lay off • Prepare UI Claims Unemployment • Make Determination Office • Conduct Appeal Hearing • Provide Separation Details Management • Provide Supporting Documentation • Obtain Separation Information / Documentation Employer’s • Consult

  32. Slide 32: Best Practices – Discharge

    Best Practices – Discharge Types of Summation of Prior Documentary Company Discharges Final Incident Warnings Evidence Policy • Violation of Policy • Incident(s) that Led • Verbal Warning • Witness • Page(s) from • Attendance to Discharge • Written Warning Statements Handbook • Isolated Incident • D

  33. Slide 33: Best Practices – Voluntary Quit

    Best Practices – Voluntary Quit Types Evidence of Identifying Key Elements More Key of Quits Quit Witness(es) to Consider Elements • Resignation • Copy of • Discussions • Was Continuing • Express without Notice Resignation Leading to Employment Concerns • Job Letter Resignation Available Prior to Qu

  34. Slide 34: Differences Between Voluntary Quit and Discharge

    Differences Between Voluntary Quit and Discharge  Burden of Proof  Voluntary Quit – Claimant  Discharge – Employer  Key Elements – Voluntary Quit  Claimant must prove good cause attributable to the employer  Claimant must prove he/she exhausted all available alternatives – Discharge  Employer

  35. Slide 35: Understanding Lack of Work and No Misconduct

    Understanding Lack of Work and No Misconduct Lack of Work and Savings No Misconduct Opportunities • Job Elimination • Severance Pay • Assignment Completed • Vacation Pay • No Work Available • Wages in Lieu of Notice • Employer Reduced Hours • Holiday Pay • Temporary Lack of Work • Refusal of Suitabl

  36. Slide 36: The Claims Process

    The Claims Process • Issue Claim State Agency • Expecting response compliant with UI Integrity mandates Employer’s • Access reported separation information • Request any Required Details/missing Representative information Employer’s • Responds to State Agency with detailed information Representative

  37. Slide 37: Unfavorable Determinations

    Unfavorable Determinations • Determines Claimant Eligible for Benefits State Agency • Mail Determination to Employer Employer’s • Review Determination and Consult with Managers Representative • Compose Letter of Appeal File Appeal • Send Letter of Appeal to Agency in Compliance with State Law • Stor

  38. Slide 38: Favorable Determinations

    Favorable Determinations • Determines Claimant is Ineligible for Benefits State Agency • Issues Determination Employer’s • Store Permanent Record of Determination • Results Available on Insight Reports Representative • Monitor for Claimant Appeal • Recover Pre-Determination/Decision benefit payments

  39. Slide 39: Unemployment Hearing

    Unemployment Hearing When Do Why Who What We Start Prepare Should Should We Preparing? Early? Attend? Present? Limited Notice First Hand Personnel File Upon Filing an Witness Minimize Last Supporting Appeal Start Minute Custodian of Documentation Preparing Preparation Records Company Policy 39 © 201

  40. Slide 40: Hearings – Employer’s Representative Role

    Hearings – Employer’s Representative Role Submit In-depth Coach Witness Discussion Provide Expert Distribute Name(s) and Prepare Regarding Consultation Provide Documentation Phone Witnesses Merits and on Case Representation to All Parties Number(s) for Participate Jurisdictional Presentation Telepho

  41. Slide 41: Hearings – Your Role

    Hearings – Your Role First Hand In-person Telephone Be Prepared to Be Prepared to Be Prepared to Witness Hearings Arrive Hearings Answer Basic Discuss Explain Participation at least 15 Leave Phone Employment Separation In- Contents of and Testimony Minutes in Line Open Questions Depth Documentation

  42. Slide 42: Hearing Representation

    Hearing Representation Responsibilities Prior To Hearing Responsibilities During Hearing - Prepare and Consult with - Appear In-person/Telephone Witnesses - Direct and Cross Examine - Review and Prepare Claimant and witnesses Documentary Evidence Employer’s Representative - Submit all necessary copi

  43. Slide 43: Unemployment Process Review: Board of Review

    Unemployment Process Review Board of Review Consultation Limitations Appeal Develop • Factual and Legal • Cannot Raise • Appeal Solely Argument Strength of Issues That Were Based on Factual • Opportunity To Hearing Decision Not Raised At or Legal Errors Present Written or Hearing Oral Argument • Boa

  44. Slide 44: Understanding the Board of Review

    Understanding the Board of Review 44 © 2012 ADP, Inc.

  45. Slide 45: Board of Review – Basics

    Board of Review – Basics 3 - 5 Member Legal Scope of State Panel Reviews Question Review Anomalies Transcript • Is ALJ’s Decision • Review is limited to • Hawaii has no • Typed Transcript “Clearly the hearing record Board of Review • Tape Recorded Erroneous?” • New evidence or • Minnesota Review Tra

  46. Slide 46: Success at the Board of Review

    Success at the Board of Review At The Hearing After The Hearing Procedural Errors • Take Detailed Notes • Review Notes Against • Did ALJ Fail to Swear • Testimony Findings of Fact Someone In? • Questions From ALJ • Make Certain All • Did ALJ Refuse to Call a • Possible Procedural Substantive Testimo

  47. Slide 47: Credibility Determinations v. Judicial Error

    Credibility Determinations v. Judicial Error Credibility – ALJ • Most credible witness in “He-said, She-said” Situations • Tie Goes to the Side that Doesn’t Bear the Burden of Proof • Board of Review Does not have Discretion to Substitute Own Credibility Determination Judicial Error • Error in Fact

  48. Slide 48: Weight and Sufficiency

    Weight and Sufficiency Preponderance of Evidence • 51% Rule • Most Relevant Evidence • Best First Hand Testimony Policies/Warnings RELATED to Final Incident • Incident Report • Verbal/Written/Final Warning • Company Policy Firsthand Testimony • Employee Witness • HR Witness • Non Employee Witness 48

  49. Slide 49: Hearing / BOR Participation

    Hearing / BOR Participation Business Needs Emergencies Impossibility • Generally Not • Illness • Traveling on Considered Good • Uncontrollable Business, etc. Cause Event/Circumstance • Newly Discovered • Weigh Your Options • Obtain Documented evidence (post- • Liability vs. Proof for Use in hearing)

  50. Slide 50: Summary

    Summary Unemployment Insurance is more than just an organizational expense. It is a tax, and like other taxes, it reduces profits. However, unlike other taxes, it is controllable!

  51. Slide 51: Controllable Areas

    Controllable Areas • Personnel Practices • Consultation & Training • Claims Administration • Hearing Representation • Audits & Tax Reviews • Management Reports

  52. Slide 52: Three Choices...

    Three Choices... Passive Participation Create an In-house Program Use a Third Party Administrator... 52

  53. Slide 53: Questions

    Questions 53 © 2012 ADP, Inc.

  54. Slide 54: Thank You for Joining Us Today

    Thank You for Joining Us Today  For information on any of the ADP products or services referenced during today’s webinar: – Phone 800-CALL-ADP or visit www.adp.com  For a complete listing of ADP webinars and webinar recordings, go to: – adp.com | tools & resources | events | webinars 54 © 2012 ADP

  55. Slide 55: Please Tell Us How We’re Doing

    Please Tell Us How We’re Doing Your input will be used to improve and plan future webinars ADP is committed to assisting businesses with increased compliance requirements resulting from rapidly changing legislation. Our goal is to help minimize your administrative burden so that you can focus on run

  56. Slide 56: Thank You for Attending.

    Thank You for Attending. 56 © 2012 ADP, Inc.

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