Are You Getting Charged by UC for COVID-19 Claims?

Employers and employees know all too well of the sizable impact that COVID-19 has had on the Unemployment Compensation system.  More than 2.1 million new claims have been filed in the last three months, resulting in the Office of Unemployment Compensation nearly doubling the size of its workforce and putting in more than 150,000 overtime hours since that time. 

This tidal wave of claims has resulted in significant changes to the Unemployment Compensation system.  As a result of Act 9 of 2020, which was enacted in late March, the Department of Labor & Industry has stated that contributory employers (i.e., those who pay taxes based on a contribution rate and a taxable wage base paid to each employee each calendar year) who were temporarily closed due to COVID-19 will be granted relief from charges and their tax rate will not be increased due to COVID-19-related claims.  L&I has also noted that contributory employers will receive automatic relief from charges for employees whose UC claims are due to the COVID-19 outbreak or public health officials’ efforts to contain and prevent the spread of COVID-19.  Plainly stated, contributory employers do not have to apply for relief from these COVID-19 related charges.

Nevertheless, there has been some confusion created by Monthly Notice of Compensation Charged (Form UC-640) received in recent weeks by employers.  This week, the Office of Unemployment Compensation issued a statement clarifying certain issues regarding relief from charges for COVID-19:

We are aware that employers’ UC-640 charge statements are indicating that employers are being charged for all benefits.  All charges which are a result of separation due to COVID-19 will receive credits, retroactively.  You do NOT need to contact us and you do NOT need to send in any paper work.  The department is working on the programming needed to grant automatic relief from charges.  Benefit charging will resume after the governor declares an end to the pandemic disaster.  The UC-640 charge statement shows you all the individuals you would otherwise be charged for if they continue filing benefits after the disaster is ended.

Governor Wolf signed Act 9 of 2020 into law on March 27, 2020, which provided for temporary amendments to the PA Unemployment Compensation Law as a result of the COVID-19 pandemic.  Pursuant to these emergency provisions related to COVID-19, contributory employers and reimbursable employers who have paid the 2020 solvency fee will receive automatic relief from charges for those employees whose UC claims are due to the COVID-19 outbreak or public health officials’ efforts to contain and prevent the spread of COVID-19.  Reimbursable employers who have not paid the solvency fee will continue to pay their full charges but will receive reimbursement for 50% of their COVID-19-related charges, per the federal CARES Act.

If you have any questions about a UC-640 statement that you have recently received or any other labor and employment topic, please do not hesitate to contact the attorneys at Hoffman & Hlavac. To stay updated on the key labor and employment law developments that affect your workplace, subscribe to our blog and follow us on social media.

George Hlavac