In this issue:

• Clock is running for state workforce agencies to obligate UI integrity funds
• Legislation to improve fairness and efficiency in UI system
• USDOL publishes final rule to codify unemployment compensation policy
• California agency catches two large UI benefits scams
• Payroll manager charged with stealing $2.8 million in mail fraud scheme
• Kentucky combats fraud with Aware
• Mousepad inserts available for 2007 calendar

Welcome to the February 20, 2007, issue of BullsEye, the On Point Technology newsletter. Our goal is to keep you up-to-date on the latest unemployment insurance news and developments at On Point Technology.

Clock is running for state workforce agencies to obligate UI integrity funds

State Workforce Agencies have approximately seven months to obligate the funding for unemployment insurance (UI) integrity programs that was distributed via UI Field Memoranda 12-05 and 13-05. These funds have to be obligated by September 30, 2007, and it is On Point Technology's understanding that they are subject to recovery if the obligation deadline is not met. We further understand that extensions of time are approved only as it regards to the liquidation deadline of December 30, 2007.

Several states have committed these funds to acquire On Point Technology's package software applications Aware, Barts, and Recover. Not only do the products meet the requirements established by the United States Department of Labor's Employment and Training Administration for the use of these funds, but because they are package software, they can be installed in as little as four months for Aware, six months for Barts and eight months for Recover.

For more information about these products please call Bob Yokavonus at 908-526-0426 or e-mail robert.yokavonus@onpointtech.com.

Legislation to improve fairness and efficiency in UI system

The Washington Employment Security Department (ESD) is seeking legislative approval of a proposal that would improve equity and efficiency in the unemployment insurance system.

The bills propose the following measures be taken to improve fairness and efficiency in their UI system.

• Holding employers more accountable for their own unemployment-related costs, rather than passing those costs on to other employers. Instead of "socializing" the costs incurred by an employer inaccurately reporting information by spreading it across all employers, the Department proposes to hold individual employers responsible for the costs. From 2003 through 2005 employer errors were responsible for an average of $1.17 million a year for these types of overpayments.
• Holding corporate officers accountable for taxes owed. When a corporation is dissolved, the Department proposes to hold the corporate officers personally liable for unpaid taxes, interest and penalties if it is proved that the officers willfully failed to pay the taxes.
• Establish claimant fines for UI fraud. Even though claimants who fraudulently collect unemployment benefits are responsible for repaying the entire benefit amount, the Department would like to add a monetary fine on top of that amount. They also propose to increase the number of weeks that a claimant is disqualified from receiving benefits as an additional deterrent for repeat offenders.
• Treat all corporate officers the same when it comes to unemployment coverage. Since for-profit corporations can elect unemployment coverage for their corporate officers, some corporations pay less in taxes than is paid out in benefits. The Department proposes to make corporate-officer coverage mandatory, as well as not allowing officers to collect unemployment benefits while the corporation is still in operation.
• Require PEOs to report employees under the clients' accounts. The Department proposes to clarify that the client company is the employer for unemployment-tax liability, not the PEO. They would also like to see that the experience rating of a client company is not lost when contracting with a PEO.

Other sections of the ESD proposal would close loopholes that open the door to inconsistent treatment of employers and abuse.

Employment Security Commissioner, Karen Lee, said the measures will improve the unemployment system and make Washington an even better place to do business.

For more details on this proposed legislation, please visit the News and Events section of the On Point Technology Web site at www.onpointtech.com/Industry-News.htm.

USDOL publishes final rule to codify unemployment compensation policy

Since 1935 the United States Department of Labor has enforced a longstanding policy requiring unemployment compensation beneficiaries to be able and available to work, but it wasn't until earlier this year that they published a final rule in the Federal Register codifying it.

Assistant Secretary of Labor for Employment and Training, Emily Stover DeRocco, states "This rule represents our sustained effort to safeguard the integrity of state unemployment insurance systems, so that eligible unemployed workers receive the correct benefits and can quickly get back to work."

The rule does not require states to amend their laws or regulations nor does it change the eligibility requirements for unemployment compensation beneficiaries.

To view the Department of Labor ruling in its entirety, visit the News and Events section of the On Point Technology Web site at www.onpointtech.com/Industry-News.htm.

California agency catches two large UI benefits scams

Two scams totaling more than $1.7 million in fraudulent UI benefits claims filed with the California Employment Development Department have been successfully prosecuted.

In both instances, the scams involved the use of stolen identities and multiple addresses and post office boxes under the control of the perpetrators. In all, the two scams were carried out by a dozen people, all but one of whom has pleaded guilty–and one is still at large. In one case, the stolen identities were obtained from a car dealership where one of the perpetrators worked for 16 years. As part of their sentence, the defendants are responsible for repaying the entire amount stolen and if any of them fail to meet their obligation, their amount becomes the responsibility of the other repaying defendants.

Did you know that On Point's Technology's package software application, Aware, can help your Agency find UI claims being filed using stolen or false identities? For more information contact Bob Yokavonus at 908-526-0426 or robert.yokavonus@onpointtech.com.

Payroll manager charged with stealing $2.8 million in mail fraud scheme

A former payroll manager for a Long Island, New York, company has been charged with stealing $2.8 million through a complex scheme involving the data processing of payroll accounts for unemployment insurance (UI) tax reporting. The charges center around mail fraud.

Allegedly, the defendant deliberately inflated his company's UI tax rates so that the third-party provider, who processes the company's UI tax work, would overpay the State's UI tax funds. The State would then refund the overpayment to the third-party provider, who would then remit the money back to the defendant's company. The defendant apparently convinced the third-party provider to issue the refund checks in his name, citing a new company policy regarding bank accounts. The defendant then deposited the checks into a personal account, informing the bank's branch manager that the checks were for bonuses and commissions.

Kentucky combats fraud with Aware

The Commonwealth of Kentucky's Department for Workforce Investment, Office of Employment and Training (OET) just stepped up the fight against fraud by installing On Point Technology's package software product, Aware. Recognizing the growing trend towards organized crime against the unemployment insurance (UI) program nationally, Kentucky took a proactive step in combating fraud by working with On Point Technology to utilize the Aware product with the agency's UI data.

Aware is designed for sophisticated ad hoc workforce reporting, identity theft prevention, organized fraud and internal theft prevention, and detection of State Unemployment Tax Act (SUTA) dumping. Two tools form the foundation of all the Aware modules: FraudIT (Fraud Investigation Tool) and Workforce Reporter. Aware provides the ability for fraud within Kentucky's UI program to be immediately detected, protecting the assets of the program, and keeping tax rates lower. More than 20 Kentucky staff persons received training in FraudIT's one-click audits, in addition to the ad hoc query tool Workforce Reporter. OET staff now have the ability to independently investigate fraud scenarios from their desktops.

On Point Technology is the only company solely dedicated to providing software solutions to the UI program across the nation. "Kentucky has taken a forward step in protecting both the employers' UI reserve accounts and the integrity of the UI program as a whole," said On Point Technology President Mike Lorsbach.

Mousepad inserts available for 2007 calendar

Several people who picked up On Point Technology's calendar-mouse pad combination at various meetings and conferences have inquired about inserts for the 2007 calendar year. These inserts are now available. If you are interested in receiving one, contact Bob Yokavonus at 908-526-0426 or robert.yokavonus@onpointtech.com.