TITLE 16. LABOR AND EMPLOYMENT

VIRGINIA EMPLOYMENT COMMISSION

Fast-Track Regulation

Title of Regulation: 16VAC5-32. Required Records and Reports (amending 16VAC5-32-20).

Statutory Authority: §§ 60.2-111 and 60.2-115 of the Code of Virginia.

Public Hearing Information: No public hearing is currently scheduled.

Public Comment Deadline: June 19, 2024.

Effective Date: July 4, 2024.

Agency Contact: Ashley Ervin, Director of Policy and Legislative Affairs, Virginia Employment Commission, 6606 West Broad Street, Richmond, VA 23220, telephone (804) 774-2713, or email ashley.ervin@vec.virginia.gov.

Basis: Section 60.2-111 of the Code of Virginia authorizes the Virginia Employment Commission to adopt, amend, or rescind such rules and regulations as it deems necessary or suitable to carry out the commission's duties and powers. Section 60.2-115 of the Code of Virginia requires the commission cooperate with the U.S. Department of Labor to the fullest extent consistent with the provisions of Title 60.2 of the Code of Virginia, including requiring such reports in such form and containing such information as the U.S. Department of Labor requires.

Purpose: The notification by employers is required by federal law. This notification is intended to make those individuals who become unemployed aware of the availability of unemployment benefits. The notice provides information to potential claimants regarding the process for claiming unemployment benefits. The regulation will require employers to personally provide this information to those who are separated from employment, whereas the regulation currently only requires the information be posted within the employer's offices. The regulation protects the public welfare of the Commonwealth by informing citizens of the availability of Unemployment Insurance assistance.

Rationale for Using Fast-Track Rulemaking Process: The action is not expected to be controversial as the Virginia Employment Commission currently has the requirement of a mandatory posting for employers that explains how employees who have been laid off may file for unemployment insurance benefits. The amendments to the regulation will simply require employers to physically provide the same information to employees at the time of their separation from employment.

Substance: The amendments require an employer to provide separated employees the notice providing information about the process for claiming unemployment benefits physically or via email at the time of separation from employment.

Issues: The advantages to private citizens will be to provide citizens with helpful information for filing for unemployment benefits. The advantages to employers will be that employees may have more accurate and timely unemployment claims for determining their eligibility for benefits. The advantage to the agency will be to have more timely and accurate claims for unemployment, which could result in better decisions and fewer appeals regarding unemployment claims or decisions. There are no disadvantages to the public or the Commonwealth.

Department of Planning and Budget's Economic Impact Analysis:

The Department of Planning and Budget (DPB) has analyzed the economic impact of this proposed regulation in accordance with § 2.2-4007.04 of the Code of Virginia and Executive Order 19. The analysis presented represents DPB's best estimate of the potential economic impacts as of the date of this analysis.¹

Summary of the Proposed Amendments to Regulation. In order to comply with the federal Emergency Unemployment Insurance Stabilization and Access Act of 2020, the Virginia Employment Commission (VEC) proposes to require employers to provide a notification about unemployment benefits and the claim process to workers at the time of separation.

Background. Currently, the Notice to Workers (form VEC-B-29)² must be posted at the workplace by every employer subject to Virginia unemployment compensation laws. The notice advises an employee when they are eligible for unemployment insurance benefits and how to apply for those benefits. The proposal would require employers to provide a copy of the notice to the employee at the time of separation from employment in addition to the current posting requirement at the workplace.

According to VEC, the notification by employers is required by federal law. During the pandemic, the first legislation passed by Congress was the Families First Coronavirus Response Act. Within this legislation was the Emergency Unemployment Insurance Stabilization and Access Act of 2020, which required states, as a condition of the grant award, to have employers provide notice of unemployment services to employees at the time of separation from employment. This notification is intended to make those individuals who become unemployed aware of the availability of unemployment benefits and to provide information to potential claimants regarding the process for claiming unemployment benefits. In this action, VEC proposes to require employers to provide this information to those who are separated from employment.

Estimated Benefits and Costs. According to VEC, employers would be expected to either hand deliver or send the form (electronically or by mail) to the employee at the time of separation. VEC intends to use the current form (form VEC-B-29), which would be available to download, free of charge, from the VEC website and all employers would be provided a link to the form. Additionally, VEC plans to include the notice of the requirement and the form in the new employer packets that are sent out when new employers register with VEC. Employers would not have to provide an original; a copy would be sufficient.

The cost of compliance with the proposed requirement appears to be small because an existing form would be used, delivery of a copy to separated employees would suffice for compliance, and electronic delivery would be acceptable. Also, the proposed change has already been implemented, but there are currently no penalties assessed or audits conducted for failure to comply.

The main benefit of the proposal is compliance with federal laws and ensuring that federal grant funding is not recouped by the federal government. As noted above, the provision of this notice is a condition of the grant award, thus failure to ensure compliance places the $13.4 million, which has already been paid to claimants, at risk of recoupment. Other benefits include an increase in the likelihood that separated employees would be informed about filing for unemployment benefits; that employers may have more accurate and timely unemployment claims for determining eligibility for benefits; and that VEC may have timelier and more accurate claims for unemployment, which could improve decision-making and reduce the number of appeals regarding unemployment claims or decisions.

Businesses and Other Entities Affected. The proposed changes would require employers to provide a copy of the Notice to Workers (form VEC-B-29) to separated employees. Based on the U.S. Bureau of Labor Statistics, VEC reports that the total number of separations (quits and discharges) in Virginia was approximately 1.9 million in 2023. No employer appears to be disproportionately affected.

The Code of Virginia requires DPB to assess whether an adverse impact may result from the proposed regulation.³ An adverse impact is indicated if there is any increase in net cost or reduction in net benefit for any entity, even if the benefits exceed the costs for all entities combined.⁴ As noted, the required delivery of the Notice to Workers is not likely to introduce significant compliance costs on individual employers. Thus, an adverse impact is not indicated.

Small Businesses⁵ Affected.⁶ Although some of the affected employers are likely small businesses, the proposed amendments do not appear to adversely affect them.

Localities⁷ Affected.⁸ The proposed amendments do not introduce costs for localities nor disproportionately affect them.

Projected Impact on Employment. As discussed, the required delivery of notification may result in more timely and accurate claims for unemployment benefits, but no direct and significant impact on total employment is expected.

Effects on the Use and Value of Private Property. No impact on the use and value of private property or on real estate development costs is expected.

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¹Section 2.2-4007.04 of the Code of Virginia requires that such economic impact analyses determine the public benefits and costs of the proposed amendments. Further the analysis should include but not be limited to: (1) the projected number of businesses or other entities to whom the proposed regulatory action would apply, (2) the identity of any localities and types of businesses or other entities particularly affected, (3) the projected number of persons and employment positions to be affected, (4) the projected costs to affected businesses or entities to implement or comply with the regulation, and (5) the impact on the use and value of private property.

² https://www.vec.virginia.gov/sites/default/files/documents/vecb29eng Revised.pdf

³Pursuant to § 2.2-4007.04 D: In the event this economic impact analysis reveals that the proposed regulation would have an adverse economic impact on businesses or would impose a significant adverse economic impact on a locality, business, or entity particularly affected, the Department of Planning and Budget shall advise the Joint Commission on Administrative Rules, the House Committee on Appropriations, and the Senate Committee on Finance. Statute does not define "adverse impact," state whether only Virginia entities should be considered, nor indicate whether an adverse impact results from regulatory requirements mandated by legislation.

⁴Statute does not define "adverse impact," state whether only Virginia entities should be considered, nor indicate whether an adverse impact results from regulatory requirements mandated by legislation. As a result, DPB has adopted a definition of adverse impact that assesses changes in net costs and benefits for each affected Virginia entity that directly results from discretionary changes to the regulation.

⁵Pursuant to § 2.2-4007.04, small business is defined as "a business entity, including its affiliates, that (i) is independently owned and operated and (ii) employs fewer than 500 full-time employees or has gross annual sales of less than $6 million."

⁶If the proposed regulatory action may have an adverse effect on small businesses, § 2.2-4007.04 requires that such economic impact analyses include: (1) an identification and estimate of the number of small businesses subject to the proposed regulation, (2) the projected reporting, recordkeeping, and other administrative costs required for small businesses to comply with the proposed regulation, including the type of professional skills necessary for preparing required reports and other documents, (3) a statement of the probable effect of the proposed regulation on affected small businesses, and (4) a description of any less intrusive or less costly alternative methods of achieving the purpose of the proposed regulation. Additionally, pursuant to § 2.2-4007.1 of the Code of Virginia, if there is a finding that a proposed regulation may have an adverse impact on small business, the Joint Commission on Administrative Rules shall be notified.

⁷"Locality" can refer to either local governments or the locations in the Commonwealth where the activities relevant to the regulatory change are most likely to occur.

⁸Section 2.2-4007.04 defines "particularly affected" as bearing disproportionate material impact.

Agency's Response to Economic Impact Analysis: The Virginia Employment Commission concurs with the economic impact analysis prepared by the Department of Planning and Budget.

Summary:

The amendment adds the requirement for employers to provide notification to workers at the time of separation of the availability of unemployment compensation.

16VAC5-32-20. Required reports.

A. Each employer, as defined in § 60.2-210 of the Code of Virginia, shall report to the Virginia Employment Commission (commission) for each calendar quarter all the information concerning the number of workers subject to the Virginia Unemployment Compensation Act (the Act) (§ 60.2-100 et seq. of the Code of Virginia) and the total wages payable with respect to employment in all pay periods ending within each such quarter. Upon request, each such employer shall furnish the commission additional information revealing the wages earned by an individual in his the individual's employment during the time between the last pay period for which wages were paid in any quarter and the end of such quarter.

B. Each employer shall report quarterly, not later than the last day of the month following the end of the calendar quarter, the following information in the format prescribed by the commission:

1. Employer's name, address, and any registration number assigned to him the employer by the commission;

2. The quarterly period covered by the report;

3. The social security account numbers of the workers;

4. The full legal names of workers, with surnames last; and

5. Each worker's total wages paid for the quarter.

Such reports shall be submitted for each calendar quarter of each year.

C. An employer shall immediately notify the commission of the filing of any voluntary or involuntary petition in bankruptcy or other proceeding under the Federal Bankruptcy Code, the commencement of any receivership or similar proceeding, or of any assignment for benefit of creditors, and any order of court under the laws of Virginia with respect to the foregoing.

D. Each employing unit shall make such reports as the commission may require and shall comply with instructions of the commission pertaining to the preparation and return or submission of such reports.

1. Any employing unit which that becomes an employer shall give notice to the commission of that fact within 30 days. The notice shall contain the employer's name, home address, business address, and name of business, if any.

2. Any employer who terminates his the employer's business for any reason or transfers or sells the whole or any part of his the employer's business or changes the name or address, or both, of his the employer's business, shall within 30 days of such action give notice of such fact in writing to the commission. The notice shall contain the employer's name, address, and account number, along with the name, address, and account number of any new owner or part owner.

E. Every corporation shall file with the commission a verified list of its officers and registered agent. Where it is claimed that any of the officers are not in the corporation's employment, a complete statement of the reasons shall be presented with said list.

An officer of a corporation, to be considered as being in the employment of a corporation, shall perform services, and these services shall be performed either (i) for remuneration or (ii) under a contract of hire.

F. At the time of separation from employment, an employer shall provide a copy of the required Separation Notice to Workers regarding availability of unemployment compensation to any employee who is separated from such employer. Such notice shall be provided in person or electronically to the individual at the time of separation or mailed to the individual's last known address.

FORMS (16VAC5-32)

Delinquent Notice-Quarterly, T-COL-001 (rev. 4/2022)

Employer's Quarterly Tax Report, T-FC20 (rev. 8/2018)

Voluntary Election Notice, T-COL-009 (rev. 9/2021)

Report to Determine Liability, T-FC-27 (rev. 10/2015)

Annual Tax Rate Notice, T-RAT-001 (rev. 12/2021)

Combined Amended Quarterly Tax and Wage Report, FC-34 (rev. 7/2012)

Partial Transfer of Experience for Partial Acquisitions, T-MRG-007 (rev. 5/2022)

Waiver of Experience Rate Transfer, T-MRG-001 (rev. 2/2021)

501(c)(3) Voluntary Election Notice, T-REG-004 (rev. 2/2021)

Account Registration Notice, T-REG-011 (rev. 2/2022)

Notice to Appear in Lieu of Summons, T-COL-008 (rev. 3/2021)

Account Update Notice, T-PRO-001 (rev. 11/2019)

Missing Information Notice, T-PRO-002 (rev. 8/2020)

Virginia Employment Commission Notice to Workers, VEC B-29 (eff. 3/2024)