2013 Iowa Law Change on Unemployment Insurance

By Ann Holden Kendell

Effective July 1, 2013, there was an amendment to Iowa Code Section 96.3(7), "Recovery of overpayment of benefits."  The amendment marks a significant change regarding unemployment insurance.  Formerly, if an employer missed the fact-finding interview and later successfully challenged an award of unemployment benefits, the employer's account was credited for the overpayment.  With the amendment, if the employer does not participate in the fact-finding interview and challenges an award of benefits and wins, the business is still responsible for the overpayment to the former employee - the employer's account is no longer credited.  Further, the amendment also indicates that if an employer fails to "adequately" respond to the department's request for information, this can also result in the employer's responsibility for an overpayment.  Therefore, if the employer participates in the fact-finding interview and loses, but ultimately prevails on a challenge to the award of benefits, there is still a possiblity that the overpayment will not be credited back to the employer's account. 

The underlined language below shows the new language to the statute:

Section 1. Section 96.3, subsection 7, paragraph b, subparagraph (1), Code 2013, is amended to read as follows: (1) (a) If the department determines that an overpayment has been made, the charge for the overpayment against the employer’s account shall be removed and the account shall be credited with an amount equal to the overpayment from the unemployment compensation trust fund and this credit shall include both contributory and reimbursable employers, notwithstanding section 96.8, subsection 5. The employer shall not be relieved of charges if benefits are paid because the employer or an agent of the employer failed to respond timely or adequately to the department’s request for information relating to the payment of benefits. This prohibition against relief of charges shall apply to both contributory and reimbursable employers.

To make sure that there is an “adequate” response, Iowa employers should not only participate, but provide all documents to support the termination to Iowa Workforce Development in advance of the fact-finding interview and have those documents available during the fact-finding interview.  The employer should also have the appropriate witnesses participate in the fact-finding interview.

If you have questions regarding unemployment claims, you should contact your BrownWinick employment law attorney.