False Separation Notices
Some employers have recently received Separation Notices from the DE UI for employees who have NOT filed a claim for unemployment, and may, in fact, still be working (either for the employer or at another company). These standard looking notices show the employee’s full, correct Social Security number and show the Claimant’s Stated Reason for Separation. The employer is required to verify the employee’s dates of employment and reason for separation.
WHAT YOU SHOULD DO:
- Confirm with the employee (or terminated employee) that they filed a claim with the DE UI.
- Promptly respond to the Notice. Fill in your contact information. If the employee did not file a claim, write on the form that it is fraudulent and that you’ve confirmed the employee did not file a claim.
- Fax the form to the DE UI and keep a receipt showing the fax went through.
The employee may receive a notice from the DE UI saying that they qualify for $xxx per week in unemployment benefits, or they may receive a Form 1099-G for 2020 for Delaware unemployment benefits they did not receive.
WHAT THEY SHOULD DO:
- File a police report right away for identity theft.
- Contact the Unemployment Insurance Fraud Hotline at 302-761-8397 or 302-761-8207 or visit delaware.gov/divisions/unemployment-insurance/ui-fraud
Late Filing/Penalty Charges for Not Filing a Quarterly Tax Return or for Late Payment of Taxes (even though it was timely filed and/or paid)
Some employers have received a late filing/penalty charge ranging from $100 to $450 – mostly for late filing and late payment of taxes in the third quarter of 2020, although other quarters may also be affected.
The DE UI had an issue with some third quarter tax forms and tax payments, causing them to be processed two weeks late. Before the DE UI was aware of this, from the DE UI’s perspective, these employers failed to file their third quarter 2020 unemployment tax returns and pay the required taxes. This caused delinquency notices (including assessment, interest, and penalty charges) to be sent out, even though employers filed and paid on time.
WHAT YOU SHOULD DO:
- If you use a third party to prepare your payroll and pay your taxes, please contact them.
- If you prepare your company’s payroll tax returns, write a letter and attach a copy of the Delinquent Notice stating that you filed and paid on time. Include the date you filed the return, the date you paid the taxes, and include a copy of your cancelled check if you have it.
Increased DE UI Rate for 2021 Due to Late Filing/Payment Noted Above
When the DE UI started to calculate the 2021 tax rates, they were not aware that a number of employers had filed their third quarter returns and paid timely. Therefore, some employers’ tax rate increases may be related to this issue.
WHAT YOU CAN DO:
- If you believe the reason for your rate increase is related to this error, you have the right to appeal the increase. You can send an email to DOL_UI_Employer_Tax_Questions@delaware.gov stating, for example, “We formally request an appeal to the 2021 tax rate. EmployerName received a delinquency notice for third quarter returns and taxes. However, EmployerName filed all 2020 UI tax returns and paid all UI taxes on time.”
Massive Unemployment Claims in 2020 Related to COVID-19 DO NOT Play a Part in Employers’ 2021 Rates
When the DE UI calculated new employment rates for 2021, they excluded from the calculation any claims that were certified COVID-19 related. The balance of claims that remained were still higher than those paid in 2019. Therefore, if an employer had increased unemployment claims that were NOT COVID-19 related, they may see a slight increase in their 2021 rate.
Dealing with any of these issues on a timely basis is critical. If you need assistance, please contact Linda Pappajohn, Director of HR Consulting Services, at 302.737.6200 or Lpappajohn@santoracpagroup.com.
