Thursday, November 3, 2016

Determination of Financial Eligibility Under Pennsylvania's Unemployment Law - Simple Explanations of a Base Year, a Benefit Year, a Credit Week and Appealing a Notice of Financial Determination

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How Can I Figure Out My Financial Eligibility for Benefits Under the Pennsylvania Unemployment Compensation Law?

If you have been in the workforce as a w-2 employee for more than a few years, you probably will have an easy time figuring out your weekly benefit rate if you are determined to be eligible for unemployment compensation (i.e. your employment ended through no fault of your own or you had a good reason to resign under the law).

I Was Quit, Resigned, Was Terminated or Was Laid Off from My First Full-Time Job in Pennsylvania – How Can I Figure Out if I am Financially Eligible for Unemployment Benefits?

However, if you are being separated from the full-time job you have ever had in Pennsylvania – or the first such job you have had in years (maybe you took time off for the family, moved back home after years out West or decided that the great American Dream of self-employment was not for you), calculating your financial eligibility for benefits is a bit more challenging

How Does Pennsylvania’s Department of Labor Determine Whether I Have Earned Enough Money Over a Long Enough Time-Period When Determining My Financial Eligibility for Pennsylvania Unemployment Compensation Benefits?

Immediately upon receipt of an application for unemployment benefits filed by a recently separated employee (i.e. a “claimant”), the Pennsylvania Department of Labor’s Unemployment Service Center does two things: a) it sends the employer a “Notice of Application” wherein it informs the employer of the application and asks the employer to provide information concerning why the employee was separated; and, b) it calculates the claimant’s financial eligibility for benefits.

NOTE: Once the financial eligibility calculations are complete, which usually takes a week or so, the Service Center mails the claimant a Notice of Financial Determination.

In calculating the claimant’s “Weekly Benefit Rate,” the Service Center determines the claimant’s "Benefit Year,” the claimant's “Base Year,” and the claimant’s “Base Year Wages,” and the claimant’s “Credit Weeks.”  We will explain these terms below.

What is My “Benefit Year” Under the Pennsylvania Unemployment Law? 

The 52 weeks following an application for benefits – 43 P.S. §753(b).

EXAMPLE:  Sally is terminated on December 24, 2016, and files an application for benefits on December 31 2016. 

Sally’s Benefit Year will be December 31 2016 through December 31 2017.

Once the Benefit Year is established, the claimant’s “Base Year” is determined.

What is My “Base Year” Under the Pennsylvania Unemployment Law? 

A claimant’s "base year" is the first four of the last five completed calendar quarters. 43 P.S. §753(a).  I find this a little confusing, but applying the statute as follows makes it a little eerier to figure out the claimant’s Base Year:

·       Go back 5-quarters (i.e. 15-months) from the first day of the Benefit Year;

·       Eliminate the quarter (i.e. 3-months) immediately preceding the date of application (i.e. the start of claimant’s Benefit Year);

·       The 12-months that are left are the first four of the last five completed calendar quarters, i.e. the claimant’s Base Year.

EXAMPLE:  Sally is terminated on December 24, 2016, and files an application for benefits on December 31, 2016.  Sally’s Benefit Year starts December 31, 2016.

Counting back 5 quarters from December 31, 2016 brings us to September 30, 2015 - which will be the start of Sally’s Base Year. 

Sally’s Base Year will be September 30, 2015 to September 30, 2016.

What Are “Credit Weeks” Under the Pennsylvania Unemployment Law? 

A credit week is any calendar week during the Base Year in which the claimant earns
remuneration of $50 or more. 43 P.S. §753(g)(1).

EXAMPLE:  Sally Recentcollegegrad secured her first full-time job ever on August 1, 2016, receiving a salary of $800 per week.  Unfortunately, Sally is laid-off on December 24, 2016.

Sally files an application for benefits on December 31, 2016.  Sally’s Benefit Year starts December 31, 2016.  Sally’s Base Year starts September 30, 2015 and ends on September 30, 2016.

Sally’s Credit Weeks are determined by figuring out the number of weeks during Sally’s Base Year that she worked full-time and earned more than $50 per week. 

Sally therefore has 8 Credit Weeks, i.e. every week she worked beginning when she took the job on August 1, 2016 through the last week of her Base Year, September 30, 2016. 

How Many “Credit Weeks” Do I Need to Work During My Base Year in Order to Be Financially Eligible for Benefits Under the Pennsylvania Unemployment Law? 

A claimant with less than 16 Credit Weeks during his/her Base Year is ineligible for any unemployment benefits.  43 P.S. §804(e).

If claimant has 16 or 17 credit weeks, then he/she will be eligible for 16-weeks of benefits. If claimant has 18 or more credit weeks, then he/she will be eligible for the full 26-weeks of benefits provided for under the law. 

NOTE:  In the final EXAMPLE above, Sally would have to work to until at least February 21, 2017 in order to be potentially eligible for up to 16-weeks of benefits, and to at least March 7 to secure the maximum allotted 26-weeks.  

What Are My “Base Year Wages” Under the Pennsylvania Unemployment Law?  Can I Win Unemployment Benefits if I am Misclassified as an Independent Contractor? 

How Do I Calculate My Weekly Benefits Under Pennsylvania’s Unemployment Compensation Law?

In a post I wrote in July of 2012, I illustrated in what I hope is a clear and straightforward fashion how to determine your weekly benefit rate.  Little math is required!

How Can I Appeal and Incorrect Notice of Financial Determination?

Determining financial eligibility is in most cases a matter of simple math completed by a computer; consequently, most claimants do not have reason to dispute or appeal a Notice of Financial Determination

There are, however, two situations of common dispute where NSFs are concerned: a) situations where the claimant has no reported earnings because he/she was misclassified as an independent contractor; and, b) where a large, lump sum payment (a bonus, large commission, etc.) skewers the Base Year calculation.  See e.g. 43 P.S. §801(a) (if 20% or more of claimant’s base year earnings were earned during a single quarter claimant may be deemed financially ineligible in whole or in part).

Does a Notice of Financial Determination Mean That I am Eligible for Benefits Under the Pennsylvania Unemployment Law? 

No.  Everyone gets a Notice of Financial Determination, even if they were fired after being caught on camera stealing money from the cash register, and admitted to the deed in a sworn statement moments before being escorted out of work. That is so because one’s financial eligibility is calculated by a computer without regard to the circumstances relating to the employee’s separation from employment.

What is a Notice of Determination, and How Long Does it Take for Unemployment to Send Me Notice as to Whether I am Eligible for Unemployment Benefits in Pennsylvania? 

While financial eligibility issues are only infrequently the subject of dispute, the determination of whether an employee was terminated through no fault of her/her own (i.e. did not engage in willful misconduct or quit without a necessitous and compelling reason) is often far more contentious.

The Service’s Center’s decision on that issue is made after an investigation by the Service Center Representative, who will often take a statement over the phone from each party, along with sending out a Claimant Questionnaire and an Employer Questionnaire.

The Service Center’s findings are set forth in a Notice of Determination, which is often issued at months after the Notice of Financial Determination.   

Appealing from the Notice of Determination, the Unemployment Referee Hearing in Pennsylvania

The party who is “aggrieved” by the Notice of Determination (i.e. the claimant if benefits are denied, and vice-versa) has 15-days to appeal.  Late appeals will not be allowed absent extraordinary circumstances

When asked to set forth the basis for the appeal, it is wise to simply state “I disagree with the Determination.”  That is so because, no matter what is said on the appeal, a Referee Hearing will be scheduled. You do not want to unwittingly write something that can be used against you at the Hearing!

Employers are of course far more familiar with such Hearings than the average claimant, and frequently consult with counsel in order to prepare for same (and sometimes bring counsel to the Hearing.  Hence, it is wise to consider retaining counsel for representation at the Hearing.

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John A. Gallagher is an employment lawyer who represents employees who need an employment lawyer in Southeastern Pennsylvania, including those working in Philadelphia County, Delaware County, Montgomery County, Bucks County, Chester County, Berks County and Lancaster County.

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