Unemployment Compensation Roundup: Review of Recent Legislation, Cases, and Concerns

The Legal Intelligencer

(by Alex Farone)

The COVID-19 pandemic has broadly affected nearly every state’s unemployment compensation (UC) system in one way or another, and Pennsylvania is no exception. From extended appeal deadlines to an uptick in UC fraud claims, this article sets forth four of the most recent changes or proposed changes to Pennsylvania’s UC system that have arisen due to COVID-19.

  1. Appeal Deadlines: Extension and Refresher

The process for employees seeking UC benefits can involve several steps and multiple appeals. The first step involves the recently separated employee filing an application for benefits. Applications are processed by one of several UC Service Centers across the Commonwealth. These Service Centers are tasked with making an initial determination on claimants’ applications. The Service Centers’ determinations may be appealed by either the claimant or their former employer to a UC Referee, who will conduct an evidentiary hearing on the merits of the application. The decision of the UC Referee may then be appealed by either party to the UC Board of Review (Board).

Until recently, applicants and employers had just 15 days to appeal initial determinations and referees’ decisions. On June 30, 2021, Governor Tom Wolf signed Act 30, formerly H.B. 178, into law, extending the time period allowed for appeals of UC Service Center determinations and UC Referee decisions from 15 days to 21 days.

Act 30 does not impact the deadlines to file appeals with either the Pennsylvania Commonwealth Court or the Supreme Court of Pennsylvania. An appeal to the Pennsylvania Commonwealth Court from the Board is an appeal as of right, but any further appeal to the Pennsylvania Supreme Court must be specifically permitted by that Court in response to an appellant’s petition for allowance of appeal.

  1. Commonwealth Court Signals Possibility of “Untimely” UC Appeal Acceptance Due to COVID-19

On August 31, 2021, the Pennsylvania Commonwealth Court issued its opinion in Barsky v. Unemployment Compensation Board of Review, remanding the matter back to the Board and opening the door for consideration of untimely appeals due to COVID-19’s impact. No. 948-CD-2020 (Pa. Commw. Ct. Aug. 31, 2021).

In Barsky, the claimant lost his job in March 2020 when Governor Wolf mandated the closure of non-essential businesses due to the COVID-19 pandemic. Mr. Barsky applied for and received unemployment benefits, until the UC Service Center terminated benefits due to an alleged overpayment. His last day to file a timely appeal to the UC Referee was June 3, 2020, but his appeal was not received until June 4, 2020. The UC Referee held a hearing regarding the timeliness of his appeal and dismissed it as untimely. The Board affirmed.

On appeal to the Commonwealth Court, Mr. Barsky alleged that his representative mailed his appeal documents on time and offered evidence of a U.S. Postal Service (USPS) receipt indicating the documents were mailed on June 1, 2020. He also argued a health condition that placed him at risk of contracting COVID-19 in public spaces, as well as the USPS backlog of mailing operations due to COVID-19, caused his otherwise timely mailing to be delivered after the appeal deadline, and therefore his appeal should have been permitted nunc pro tunc, as if it been delivered timely. Recognizing that an appeal nunc pro tunc (“now for then”) is warranted where the filing delay was caused by non-negligent circumstances, the Commonwealth Court remanded to the Board to consider whether the USPS tracking number on the envelope received by the UC Service Center was filed timely and warranted an appeal.

The effects of the Commonwealth Court’s Barksy decision are significant for both claimants and employers when arguing timeliness of UC appeals and requests for nunc pro tunc relief. Though the safest options for ensuring timely appeals are to e-mail or fax the appeal for verifiable, same-day receipt, or mailing the appeal from a USPS office via certified mail, Barksy indicates that COVID-19-related disruptions to USPS operations may be sufficient to allow an appeal nunc pro tunc where the appellant can demonstrate they mailed the appeal documents in sufficient time to reach the UC Center under traditional circumstances.

  1. New Proposed Legislation: Lowering Aid and Limiting Repayment Requirements

Two bills proposed this year in the Pennsylvania House of Representatives illustrate some of the Commonwealth’s attempts in balancing unemployment needs with transitioning Pennsylvanians back to work.

Proposed H.B. 508 would phase out Pennsylvania’s participation of federal COVID-19-related UC programs established through the 2021 American Rescue Plan Act, which are currently enhancing and extending benefit payments to Pennsylvania UC claimants. If signed into law, the bill would also provide for a back-to-work bonus program to incentivize UC claimants to promptly seek and maintain employment. This program would provide a $300 bonus to former UC claimants who are employed by a single employer for four consecutive weeks. An additional $300 would be available if the former claimant remains with the same employer for an additional four weeks (a total of eight consecutive weeks). On June 9, 2021, this bill was recommitted to the Pennsylvania House Appropriations Committee.

Proposed H.B. 1027 would prohibit Pennsylvania’s Department of Labor and Industry from seeking repayment of UC benefit overpayments made through no fault of the claimant. Exceptions to the repayment prohibition would apply if the overpayments were made due to a claimant’s false or fraudulent statement, or a failure to disclose pertinent information. On March 26, 2021, this bill was referred to the Pennsylvania House Committee on Labor and Industry.

  1. Be Suspicious of Scams and Fraud Schemes

As recently recognized by the Pennsylvania legislature in proposing the repayment exceptions within H.B. 1027, employers and the Pennsylvania Department of Labor and Industry have recently been faced with an uptick of attempted fraud by supposed UC claimants seeking overpayments or identity thieves seeking UC benefits. As of March 2021, at least 50,000 reports of UC fraud have been made to the Pennsylvania Department of Labor and Industry since the COVID-19 pandemic began. Over 300 complaints of UC fraud during the pandemic have been reported to the Pennsylvania Office of the Attorney General, which led to at least 29 arrests.

It is important for employers to remain vigilant regarding UC documents they receive that may indicate an instance of attempted fraud. Common red flags include receiving UC documents for employees whose employment was never interrupted, receiving multiple UC documents for a single claimant, or receiving UC documents for former employees where the personal information such as birth date or social security number appears to be inaccurate.

Employers should not hesitate to verify a UC form’s legitimacy with the UC Service Center if its accuracy is in doubt. For example, some recently issued (and otherwise legitimate) documents omitted the claimant’s name. Employers can verify the legitimacy of a form because each includes a unique UC code that can be verified with the UC Service Center upon receipt by calling 833-728-2367.

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Reprinted with permission from the September 16, 2021 edition of The Legal Intelligencer© 2021 ALM Media Properties, LLC. All rights reserved.