Crack-down coming on new-hire reporting
November 2, 2011
Only about 30 percent of Idaho employers comply with the 1997 law requiring them to report newly hired workers to the Idaho Department of Labor within 20 days.

While the complying businesses are the largest in the state and employ two-thirds of Idaho’s workers, the failure of all employers to report undermines the law’s purpose to identify people who owe child support so their wages can be garnished and the money recovered to support their children. Since the law was passed, child support collections through wage withholding have jumped from less than a third to more than half, and nearly 1,200 parents who have ignored child support orders are being identified and garnished every month.

But new hire reporting does more than help reduce demand for welfare support. It also helps the Department of Labor track down unemployment insurance overpayments. Without 100 percent compliance with the reporting requirement, it can take months to identify claimants who have continued collecting benefits after they have returned to work. After that long, it becomes increasingly difficult to actually recover any of the overpayments.

The department’s compliance staff cross-matches unemployment benefit recipients with the new hire reports every week and will be doing that cross-match every day by year’s end. This cross-matching process prevents further benefit payments to claimants who have returned to work without alerting the department and triggers investigations by department staff into why these workers were still trying to collect benefits. The department has recovered more than $3 million in overpayments since the recession began in December 2007.

Beefing up compliance with the new hire reporting law is part of a long-range plan by the department to crack down on benefit fraud and overpayments. A special departmental task force is being put together to implement this strategic plan.

The department is stepping up education about benefit and tax responsibilities for claimants and employers; increasing staff training to better assist claimants in complying with unemployment benefit requirements; developing new messaging services for employers to obtain real-time information on employee separations; linking directly to the IRS to recover overpayments from federal tax refunds and creating a new computer system for benefit and tax payments to replace the existing system that is over 30 years old.

In addition, the department is refocusing its employer audits to detect misclassification of workers as independent contractors and cases where workers are being paid under the table to avoid the unemployment insurance – and other – taxes.

“Unemployment benefits play a critical economic role in Idaho, ensuring that workers laid off during severe recessions like this last one get some assistance in paying their bills so they’re still here when the economy picks up and employers need them,” Department of Labor Director Roger B. Madsen said.

“But the Department of Labor is committed to making sure that benefits go only to those who legitimately deserve them and in the amounts they deserve,” Madsen said. “This integrity initiative builds on the department’s already solid record of controlling overpayments and ensuring employers pay the unemployment taxes they legitimately owe.”