APA Requests That Illinois Waive By Curtis Tatum, Esq.
In August, the APA sent a letter to Jay Rowell, Director of the Illinois Department of Employment Security (IDES), requesting that he exercise his authority to waive penalties assessed against employers that have unintentionally failed to comply with the new monthly wage reporting requirement. The letter was drafted by members of the Government Relations Task Force (GRTF) Subcommittee on Unemployment Insurance. The subcommittee is aware of several instances in which IDES has imposed harsh fines and is concerned about the potential impact on smaller employers that became subject to the reporting requirement earlier this year.
History of the Monthly Wage Reporting Requirement
On June 14, 2012, Illinois Governor Pat Quinn signed the Save Medicaid Access and Resources Together (SMART) Act, which included a mandate for employers with 250 or more employees to file monthly wage reports. Since then, the reporting requirement has systematically been extended to employers with as few as 25 employees. Beginning in January 2013, employers with 250 or more employees were required to file monthly wage reports. In July 2013, the requirement was extended to employers with 100-249 employees, and in January 2014, the requirement was further extended to employers with 50-99 employees. The final phase-in period occurred in July and applied to employers with 25-49 employees.
Difficulty Accommodating the Reporting Requirement
APA's letter points out that wage reporting has traditionally been performed on a quarterly basis and explains some of the technical difficulties created by the new wage reporting requirement, noting, "virtually all payroll software systems have been designed to accommodate a quarterly reporting cycle."
The letter continues, "employers have been faced with tough technical hurdles to reengineer their payroll systems that were designed to meet longstanding federal, state and local quarterly reporting requirements."
APA also noted that "even the Illinois Department of Employment Security (IDES) was unable to meet the legislative deadlines for implementation, and had to delay it."
Employer Compliance and Penalty Waivers
Illinois employers have faced two issues regarding the new reporting requirement. First, while employers are always responsible for knowing the reporting requirements, they must receive proper notice when requirements change. Second, even when employers had proper notice, they faced technological hurdles or at least had to develop new reporting protocols. If an employer has attempted to comply but was unable to do so because of technical reasons or has remained in compliance once informed of the new requirements, a fine will not serve to promote future compliance. The July 21, 2014, edition of the CATA Bulletin, published by the Chicago Automobile Trade Association, provides an example of a suburban car dealership that was fined only after it began reporting on a monthly basis. The article notes that "the dealership began submitting reports in January, not knowing its filing requirements actually began six months earlier. The fine notification came after the store's reporting began."
APA concluded with a request that IDES waive the penalties for employers that have unintentionally failed to comply with the monthly wage reporting requirement: "Given the uniqueness of the law, its recent application to significant populations of employers, and the difficulty of implementation by employers, the APA requests that you use your discretion to waive penalties for violations of the new monthly reporting requirement. We further ask that you work with stakeholders to adjust the penalties so that they promote compliance without harshly penalizing businesses that have unintentionally failed to report timely."
APA Subcommittee Members Prep for ACA ImplementationBy Ronald Moser, CPP
In the August-September issue of PAYTECH magazine, Ronald L. Moser, CPP, covered some of the unique aspects of the government sector regarding healthcare reform. The Supervisor, Payroll/Benefits, at Kenmore-Town of Tonawanda Schools reviewed a meeting of the APA Government/Public Sector Best Practices Subcommittee of the Strategic Payroll Leadership Task Force (SPLTF) on the topic.
The article covered how to determine if a company is an applicable large employer (ALE) covered by the Employer Shared Responsibility (ESR) provisions regarding employee health coverage.
Here are some of the specific actions committee members have taken in their places of work:
Rita Coventry of the City of Fontana, California, has been working with each of her departments to set up monitoring systems. They have built a buffer in the hiring of their part-time employees by setting a limit of 25 hours per week. This helps in those situations where a special situation occurs for extra hours. All departments are required to provide an explanation of the extra hours and her payroll department is ready to provide the department with whether the extra hours will expose the individual from a part-time status under the ACA to full-time.
Some additional comments by the committee centered on the idea that in working with the departments, we need to not only educate them on ACA but perhaps charge back to them in their budgets the additional expense of the ESR penalty. Again, this creates additional work for the payroll department but assists in making sure the departments understand that the cost factor of additional hours is more than the hourly rate.
Trina Adams of the County of Walworth, Wisconsin, has built a scheduling program with system alerts when someone has been scheduled for more than 29 hours per week. Trina states this was to assist departments such as healthcare facilities with scheduling decisions. Normally, scheduling was looked at very casually but, now one single decision can cost the county thousands of dollars.
At Miami Dade College, Rachel Mumford explains that ACA has impacted policies. Miami Dade College has used a 25-hour-per-week cap. In particular, many individuals have multiple part-time jobs, which has changed the college's policy on hiring individuals for multiple positions.
This policy change created a communication problem. Now human resources needed to not only communicate with each department but get those departments communicating with each other. They needed to share each other's needs when hiring the same individual. Part of the solution was for departments to report every pay period the hiring being done. This way if human resources found some possible violations of the new policies, the head of human resource could directly communicate and coordinate a solution to all departments affected.
Of course, if you have a union contract in this type of situation you may be prevented from stopping and controlling the scheduling. In these types of situations management may have to go back to the negotiation tables.