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May 28, 2013

New unemployment info system shortens process

By Lori Valigra

Earlier this month, Maine's Department of Labor launched a new, secure website that lets employers report unemployment information in a timely manner to comply with new federal requirements that take effect this Oct. 20.

The new State Information Data Exchange System (SIDES) E-Response free website lets employers and third party administrators file separation and wage information about workers who have left their jobs and who may file for unemployment.

The online system falls in line with Gov. Paul LePage's mission to save the state, and businesses, time and money.

"One of my priorities is making it easier and less costly for businesses to comply with government regulations," he said in a written statement. "The E-Response program is a good example of how we can use technology to make government more responsive to the needs of job creators."

Congress is requiring all states to have laws in place by Oct. 20 that would penalize employers who fail to respond to separation and related requests in a timely manner. The SIDES E-Response system aims to make it easier for employers to file the information more quickly.

Separation requests include information on whether the employee quit voluntarily, was fired for misconduct, or was laid off or if there was a lack of work. The latter two are eligible for unemployment, whereas quitting and firing for misconduct are not.

Another unemployment system called SIDES has been in place since 2012, but that is typically used by multi-state employers and payroll companies. The SIDES E-Response is better suited to small companies, explains Julie Rabinowitz, spokesperson for Maine DOL. Currently, small employers in Maine are filling out the information by hand or over the telephone.

Potential penalties aren't straightforward, explains Rabinowitz. LD 1311, the act to amend unemployment compensation, is proposing the minimum penalty that is required in the federal legislation. The penalty will vary from employer to employer, she says.

The timing for responses is triggered by a former employee filing a claim. Employers are then sent requests for separation information and are given a specific date (around two business weeks) by which to respond, she says.

She adds that 47 employers enrolled in SIDES E-Response in the first week.

Unemployment insurance data exchanges, at a glance

SIDES and SIDES E-Response have the potential to significantly improve the unemployment insurance information exchange process. The best option depends on the specific needs of an employer.
How they work:
  • SIDES E-Response is a free website through which employers and third party administrators may submit electronic responses to unemployment insurance information requests. Employers and third party administrators participating in SIDES E-Response will receive a request for unemployment insurance information from the participating state agency by mail or secure email. The request will include an authorization code that permits the employer or TPA to log on to SIDES E-Response and enter the requested information in a standard format.
  • SIDES is an automated computer-to-computer interface for employers and TPAs to receive and respond electronically to unemployment insurance information requests. Requests from participating states are in the same standard format, and responses from employers and TPAs are in a standard format. SIDES produces performance metrics and provides audit controls.
What it requires:
  • SIDES E-Response only requires a working Internet connection and an employee who will enter the requested unemployment insurance information. No programming is required to implement SIDES E-Response, and there is no charge for its use.
  • SIDES needs to be integrated into internal IT systems by employers and TPAs, although technical support is available. There are no other costs for using SIDES.
Best suited for:
  • SIDES E-Response is designed for employers and TPAs with a limited number of annual unemployment insurance claims.
  • SIDES is best suited for employers and TPAs that typically handle a large volume of unemployment insurance requests. While SIDES requires more up-front integration resources, it has the potential to streamline the response process, reducing paper work while saving time and money.
Source: U.S. Department of Labor

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