PA Unemployment Guide for Employers: Compliance & Cost

Companies need to understand Pennsylvania's unemployment information in order to comply with state law. Unemployment benefits in PA are there to serve as a safety net for workers when they lose their jobs. Organizations must stay up-to-date on changes to unemployment laws, otherwise they could wind up facing fines and penalties for violations. Here's a closer look at employer responsibilities for unemployment in PA.

Overview of Pennsylvania’s Unemployment Compensation (UC) Program

The unemployment compensation (UC) program is administered by the Pennsylvania Department of Labor & Industry (DLI). Employers make direct contributions to the UC program and employees do so through their withholdings. If an eligible employee loses their job, they can receive unemployment payments for up to 26 weeks, so long as they are actively looking for a new job. Employers are required to register with the DLI and maintain certain employment records to stay in compliance with the UC rules and regulations.

Eligibility for Unemployment Benefits in Pennsylvania

Pennsylvania's unemployment eligibility is consistent with that of most other states. To qualify for unemployment benefits, a worker must meet the following guidelines:

• Must be able to work and available for work
• Must meet certain earnings thresholds and weeks worked
• Must be unemployed through no fault of their own or unemployed due to a work stoppage
• Must apply for unemployment benefits
• Must wait one week after applying to receive benefits
• Must file claims each week they are unemployed.

An employee can lose their unemployment benefits for failing to stay in compliance with Pennsylvania's requirements.

How Employers Can Prepare for Unemployment Claims in PA

Documentation and Recordkeeping

The reality is that many employees end up getting fired for something that is their fault. Sometimes these individuals will still try to apply for unemployment benefits, even though their on-the-job conduct precludes them. To properly dispute these claims, employers should maintain accurate records of employee performance and conduct.

Responding to Claims

When an employee files for unemployment compensation, the employer will receive a Notice of Application and Request for Separation Information from the DLI. Employers have four days to respond to these requests. This process has been streamlined through the DLI's E-Response website, where employers can submit paperwork and respond to claims quickly. Once the employer submits a response to a claim, the E-Response system creates a PDF of the response that can be saved or printed.

Appealing Unemployment Decisions

The unemployment decision will be sent to the employer with a final date by which they can file an appeal. A Petition for Appeal form must be filed with the UC Board of Review if the employer disagrees with the decision.

The employer can hire an attorney for the appeal hearing, although it's not required.

The Board of Review may hold a hearing in which both the employer and former employee can explain their side of the story. The employer should bring documentation on the employee's performance and conduct to back up their dispute claims. The Board will then review the evidence and make a final decision.

PA Employer Contribution Rates and Responsibilities

The employer contribution rates for UC in Pennsylvania depend on how long an organization has been in business and the type of business they are operating. New employers have to contribute a higher rate of 3.822 percent for non-construction employees. New construction companies, which tend to have higher turnover, pay a rate of 10.5924 percent. Established employers pay a rate between 1.419 and 10.3734 percent.

One of the penalties that employers can face for non-compliance in Pennsylvania is a higher UC rate. The DLI can impose a new contribution rate anywhere from 4.695 to 14.4684 percent on delinquent employers.

Employers can reduce their unemployment costs over time by using employee retention strategies. Once an organization has proven itself to not have a high turnover rate, the state will lower its contribution limit for UC. Following proper termination procedures is another way to keep the contribution rate lower.

Recent Changes or Updates to PA Unemployment Law

Pennsylvania's employer contribution rate and rules were mostly unchanged for 2024. One new rule passed by the state legislature was HB 1481, an amendment to the Unemployment Compensation Law in Pennsylvania. This law expanded unemployment eligibility in Pennsylvania to include labor union members who find themselves temporarily unemployed due to a work stoppage.

Best Practices for Managing Unemployment Costs

It makes sense to minimize your Pennsylvania unemployment claims because it means you will be paying a lower contribution rate over time. Proactive employee management is one way to reduce turnover and new claims. Conducting regular performance reviews and engaging in conflict resolution will help prevent unnecessary terminations and unemployment claims.

You might want to consider outsourcing your HR support services to Exact Payroll. We can help you manage unemployment insurance compliance and employee relations. Retaining employees and paying a lower contribution rate to the UC program are both good ways to improve your bottom line.

Navigating Unemployment in PA as an Employer

The more often you lose employees, the more often you'll be dealing with Pennsylvania unemployment claims. This can be a time-consuming process and losing too many employees can result in paying a higher contribution. Non-compliance with Pennsylvania's unemployment laws can result in even higher rates and penalties.

Have questions about unemployment claims or compliance in Pennsylvania? Contact Exact Payroll for expert guidance and solutions to help you navigate the unemployment process smoothly.