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Illinois Governor J.B. Pritzker recently signed Illinois Senate Bill 0508 into law. This new law amends the already existing E-Verify law by adding protection for employees experiencing negative results from E-Verify. The new requirements go into effect on January 1, 2025, but employers should expect some clarification surrounding the process from the Illinois Department of Labor, (IDOL), prior to that date. The law states that it does not require any employer to enroll in any electronic verification system, including E-Verify, but also contains some confusing language that appears to limit usage in the state by saying “an employer shall not impose work authorization verification or re-verification requirements greater than those required by federal law.” This wording will likely be officially clarified before the effective date, as the intent is to allow voluntary participation while adding specific guardrails. While the law restates some previous E-Verify requirements, such as not taking adverse employment action based on a notification of discrepancy alone, it adds provisions for notifications to employees in the event the employer receives a “Notice of Inspection.” A new template for a posting providing the required information is currently in development at the IDOL. Additionally, employers are now required to provide notice to employees within a specified timeline when discrepancies are identified. Employers must provide notice within a specified timeline of 5-7 working days depending on the nature of the discrepancy. There are penalties associated with violating this act, and if such a violation is deemed to include intent, penalties can range from $2,000-$5,000 for a first offense. We expect clarification on the poorly worded sections of the amendment as well as possible legal challenges for any E-Verify infringements prior to the effective date of January 1. Stay tuned for updates on this situation.
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Navigate the challenges of state tax withholding for remote employees with our comprehensive guide, ensuring compliance amid the rapid growth of remote work.
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Unemployment benefits are designed to help workers temporarily overcome difficulties caused by a loss of employment that came about due to no fault of their own. Some people find themselves with reduced hours or are only able to find part-time employment, while others work as farmers, gardeners, tourism workers, fishermen, or in retail with their services only required during certain peak seasons. A key to managing employer tax costs is understanding seasonal and part-time workers' unemployment benefits eligibility. As seasonal and part-time workers typically work less over the course of a year, they are more likely to experience financial instability, yet they are not eligible for certain benefits that are available to full-time employees. However, in some situations, they may qualify for unemployment benefits, which can help improve their financial situations significantly during the off-season or before they find a full-time job. Unemployment tax rates for employers vary from state to state, but the more claims filed and paid against a business’s unemployment tax account, the higher their unemployment tax rate. Employers can reduce unemployment tax costs by properly categorizing employees as seasonal and part-time workers. Eligibility for unemployment benefits may change depending on this and can financially impact an organization. Summary Seasonal workers are employees hired for a specific season or standard of time during the year, and are hired knowing their employment term has a specific duration. A part-time worker is an employee who performs tasks on a reduced schedule compared to full-time staff. The IRS defines a full-time worker as an employee who works at least 30 hours per week or 130 hours per month. Eligibility for unemployment benefits for part-time and seasonal workers varies by state but typically depends on factors like employment duration, employee earnings and the circumstances surrounding the separation from employment. Employers can control unemployment tax costs by only hiring qualified employees for each position, monitoring unemployment insurance claims, and reviewing the employment information of each claimant to ensure it’s accurate. Differences Between Seasonal and Part-Time Workers As the name implies, seasonal workers are hired for a specific season or a standard time period during the year when an employer needs additional bandwidth to meet their production demands. Although these individuals are hired knowing their job is for a specific duration, this does not prohibit them from filing and potentially drawing unemployment benefits. While there is no standard definition of part-time employment, typically, a part-time employee is a worker who performs tasks on a reduced schedule compared to full-time employees. The Fair Labor Standards Act (FLSA) does not define what is considered a part-time employee or what constitutes part-time hours. On the other hand, the Internal Revenue Service (IRS) acknowledges a full-time employee as someone who works an average of at least 30 hours per week or 130 hours per month. Part-time employees are those who work less than 30 hours per week or 130 hours per month. According to the U.S. Bureau of Labor Statistics (BLS), part-time workers work between one and 34 hours per week, meaning that people who work over 34 hours a week are full-time employees. While the federal definitions of seasonal and part-time workers apply consistently across all states when it comes to receiving federal unemployment benefits, it’s important to note that state definitions for seasonal and part-time workers may differ when it comes to eligibility for state unemployment insurance, highlighting the importance of staying current on the latest state-by-state unemployment benefits regulations. Unemployment Benefits Eligibility State unemployment insurance laws generally do not disqualify individuals based on their classification as seasonal and part-time workers. Eligibility for unemployment compensation is based on several factors, including the duration of employment, the employee’s earnings in their base period, and the circumstances that led to the separation from employment or reduction in hours. If seasonal or part-time workers lose work through no fault of their own and there is simply no more work for them, they may be eligible for benefits, and the employer may or may not be chargeable. The requirements that seasonal workers must meet in order to qualify for unemployment benefits vary from one state to another. However, seasonal workers must meet the requirements of their states for wages earned and time worked during a certain length of time, which is typically the first four of the previous five calendar quarters before they file their claims. This means their employment duration directly impacts their eligibility for unemployment benefits. States also consider the reasons for unemployment when deciding whether to pay unemployment benefits to seasonal workers. At the end of a seasonal worker’s job assignment, the unemployment agencies consider it a lack of work situation in the same manner as a full-time employee who has been laid off. While they are eligible for unemployment benefits based on their reason for separation, they also must be able and available for work, and actively seeking further employment. State guidelines for part-time workers also vary. For example, in Georgia, workers who have lost a full-time job, but are working part-time and earn less than their weekly benefit amount are eligible. Workers who have lost a part-time job or whose hours were reduced may also qualify to collect unemployment. On the other hand, Texas’ weekly unemployment insurance benefit amount is 1/25th of an employee’s earnings in the highest quarter of their base period, capping out at 47.6%, which can result in a weekly benefit range of $73 to $577. Most states provide partial benefits to individuals whose work hours have been reduced through no fault or choice of their own or employees who have lost their full-time jobs and have partially replaced the lost income with one or more part-time jobs. State-Specific Guidelines and Their Impact When looking at unemployment benefits for part-time workers, it’s crucial to understand the state-by-state unemployment benefits guidelines. As stated, each state has its own guidelines that need to be followed in order to receive UI benefits. California, for example, calculates its weekly benefit amount using a benefits chart based on your earnings in the highest quarter of the previous four quarters. With that, the weekly benefit amount for an unemployed worker in California is $40 and maxes out at $450. Additionally, unemployed Californians who collect income while receiving unemployment benefits will have either $25 or 1/4th of their earnings, whichever is greater, disregarded. New York, on the other hand, calculated weekly benefit amounts by taking between 1/25th and 1/26th of an individual’s earnings in the highest quarter of their base period. New York’s weekly benefits range falls between $104 per week to $504 per week, and if income is collected while receiving unemployment benefits, New York state will disregard none. Unemployment insurance in Illinois is also different. The weekly benefit amount for eligible employees is calculated by taking the sum of earnings in the two quarters of their base period when they earned the most, taking 47% of that total, and dividing the result by 26. For unemployed Illinoisans, the maximum weekly benefit they can collect is $484 per week. Whether you’re an employer or employee, understanding state-by-state unemployment benefits requirements is crucial to ensuring you’re adhering to compliance guidelines and receiving the full amount you’re eligible for. You can review unemployment benefits by state here. Controlling Unemployment Tax Costs There are many reasons employers hire seasonal and part-time workers instead of full-time workers. For example, hiring seasonal and part-time workers can reduce the cost of paying full-time salaries and other expenses, alleviate workforce stress by getting extra help, fill positions that don’t require a full-time worker and serve as a test to see if employers want to hire the employee full time. However, if employers decide to hire seasonal and part-time workers, they must examine each state's unemployment compensation law and determine the eligibility requirements or any specific exclusions from benefits for these workers. The best way for employers to reduce unemployment tax costs is to hire only those employees whom they really need and who are qualified for the job. Also, they should monitor all unemployment insurance claims, review the employment of each claimant and ensure the proper information relating to their employment is provided to the state agency. They should also be prepared to contest any claims they believe to be improper. Given that this takes a lot of time and effort, employers can outsource managing unemployment claims. For example, correctly understanding seasonal and part-time workers unemployment benefits eligibility is important but takes additional knowledge for varying state guidelines. With the necessary expertise and resources, they can ensure responses and forms are completed on time, and efficiently deal with unemployment claims from the very beginning to effectively reduce unemployment tax costs. At Experian Employer Services, our unemployment cost and claims management services help to reduce the risk, cost, and burden of managing unemployment claims and remaining compliant. Contact us today to book a demo and see how you can recover overpayments, receive hearings representation, and remain compliant with regulatory changes. Improve your unemployment claims management with an automated solution and achieve high efficiency, cost savings, and support while navigating the complex unemployment insurance process.
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Employers who have employees working in a large number of states have to manage a number of complexities to ensure tax withholding compliance. Employee Tax Withholding Allowances Over 40 states in the U.S. collect state income tax directly from workers’ paychecks. The Form W-4, used to determine the amount of tax to withhold, underwent significant changes in 2020, leading many states to develop their own forms or adjust their tax tables. Not all workers need to submit a new state form, but it’s recommended to check the state tax agency website for more information. Employer Responsibilities Employers must maintain federal and state tax forms for each worker. If a worker doesn’t provide a complete, signed federal Form W-4, the employer must withhold federal income tax as if the worker were single or married filing separately. Most states follow the same rule for state income tax. Exemptions Some workers may claim exemption from federal and state income tax withholding. Each state has its own rules about exemption from state income tax and the form a worker must file to support the exemption. Nonresident Military Spouses The federal Military Spouses Residency Relief Act (MSRRA) allows a servicemember’s spouse to designate a different state as their domicile and pay taxes to that state. The Veterans Benefits and Transitions Act of 2018 (VBTA) modified the law to allow spouses of servicemembers to choose to use the servicemember’s domicile for state taxation, irrespective of the marriage date. Recordkeeping Requirements Most state income tax withholding laws have similar recordkeeping requirements to those of the IRS for federal income tax withholding. These requirements typically include keeping track of returns and statements filed with the state revenue agency, dates and amounts of tax deposits, the total number of employees subject to withholding, and more. Compliance in these areas is crucial to avoid potential penalties and ensure accurate tax withholding. Employers should stay updated on changes to tax laws and forms, maintain thorough records, and ensure they’re withholding the correct amount of tax for each employee. It’s also important to respect exemptions and understand the specific rules for nonresident military spouses. By doing so, employers can ensure they’re meeting their legal obligations and providing accurate information to their employees. Here are some recent legislative updates regarding tax withholding that employers should be informed about. Updates effective 7/1/2024 Georgia G-4 Form Update: The state of Georgia has released an updated version of the Georgia G-4 form. The update specifically affects Line H, where the value has been increased from $3,000 to $4,000. This change is effective from July 1, 2024. For more details, please refer to the official form. Learn more Addition of Blanchester Village, Ohio: Effective from July 1, 2024, Blanchester Village in Ohio has been added. For more information about this update, please visit the official page. Learn more Addition of College Corner Village, Ohio: College Corner Village in Ohio has been added effective from July 1, 2024. More details can be found on the official page. Learn more Addition of Glenmont Village, Ohio: Glenmont Village in Ohio has been added effective from July 1, 2024. For more information, please visit the official page. Learn more Addition of Holmesville Village, Ohio: Holmesville Village in Ohio has been added effective from July 1, 2024. More details can be found on the official page. Learn more Vermont Child Care Contribution Tax: The state of Vermont has added the Child Care Contribution tax effective from July 1, 2024. For more information about this new tax, please refer to the official document. Learn more Please note that it’s always a good idea to consult with a tax professional or the respective tax authorities for the most accurate and up-to-date information.
