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Unemployment Benefits May be Extended, Increased Enforcement Likely


Earlier this year, as part of the economic stimulus package, several programs were enacted that extended and expanded unemployment insurance (UI) benefits. While these programs are set to expire by the end of this year, new legislation has been proposed in the Senate which would extend three of these programs until the end of 2010:

• The Emergency Unemployment Compensation program extends UI benefits by an additional 33 weeks beyond state benefits.

• The Extended Benefits program provides up to another 13 to 20 weeks of UI benefits in states with unemployment rates at 6 to 8 percent.

• The Federal Additional Compensation program requires states to increase their regular UI benefits by $25 per week.

As we continue to see record unemployment rates, it is likely that we will also see a continued extension of UI benefits. We are also very likely to see increased enforcement action against employers who misclassify employees as independent contractors to avoid paying payroll taxes. When just one of these employees seeks to collect UI benefits (which may be after the employee worked for subsequent employers), it may trigger an audit. As a result, employers may be hit with back taxes, interest and penalties not just for that one employee, but for all misclassified employees.

Brody and Associates regularly advises management on complying with state and federal employment laws including wage and hour laws. If we can be of assistance in this area, please contact us at info@brodyandassociates.com or 203.965.0560.