To: Deans, Directors, Heads of Schools, Divisions, Departments, and Offices

Re: BUSINESS OFFICE MEMORANDUM NO. 146

Unemployment Compensation Policy and Responsibilities

INTRODUCTION

As announced in the 1 July 1971 Business Manager and Assistant Treasurer's memorandum, Unemployment Compensation coverage has been extended to employees of Purdue University, effective 1 January 1972; however, benefit claims against Purdue University employment will not be paid out until after 1 July 1972. The coverage applies to all staffs except students. Current estimates are that the cost of this new coverage will run about $250,000 per year, which of course comes at a time when we can ill afford cost increases. The exact costs will depend in large measure on how well all of us administer the program and manage our operations to minimize them.

The University has elected the option to reimburse the actual cost of benefits paid instead of making payments under the State's normal tax provisions. Under the "pay-as-you-go" option, the University reimburses the State dollar-for-dollar, on a monthly basis, for any unemployment benefits charged against the University's account.

Funding and charging procedures for Unemployment Compensation are being developed. Current plans are to establish two accounts for the Lafayette Campus and one for each of the Regional Campuses that will be used to reimburse the State for Unemployment Compensation claims. At the Lafayette Campus, departments will be designated "high-risk" or "low-risk", thus allowing departments with the potential of fewer claims to be assigned a lower rate.

The rates charged will be a percentage of the first $4, 200 of salary paid to covered staff. The designation of accounts as "chargeable" or as "charges absorbed by the general fund" will approximately parallel the procedures currently used for handling the Workmen's Compensation charges. The first charges will be made with the 3 January 1972 payroll.

ASSIGNMENT OF RESPONSIBILITIES

All department heads and supervisors are responsible to control the costs of unemployment benefit claims for their areas of responsibility. The total cost of these claims will in large measure reflect how well this responsibility is carried out. In order for department heads and supervisors to handle this problem they will need to have an understanding of:

1. eligibility of employees and former employees for benefits;

2. the amount of benefit an individual may receive;

3. the importance of holding interviews when an employee leaves work;

4. the need for immediate termination reports to the Department of Personnel Administration; and

5. the planning and scheduling of work to provide constant levels of employment and reduce layoffs and terminations.

The Comptroller will be responsible for the development and implementation of funding and charging procedures.

The Department of Staff Benefits and Payroll will be responsible for:

1. all financial reports to the Indiana Employment Security Division covering wages and salaries paid to each covered staff member;

2. reimbursement to the State for costs of claims chargeable against the University; and

3. charging the University accounts for the cost of funding the Unemployment Compensation program.

The Department of Personnel Administration will be responsible for:

1. developing procedures for processing Unemployment Compensation claims and benefits for all covered staff of the University;

2. holding workshops to implement procedures and advise employing departments of their responsibilities under the Act; and

3. verifying reasons for and dates of termination and layoff separations with the Indiana Employment Security Division.

The Business Managers of the Regional Campuses or their designees are responsible for handling claims and claims records, and termination reports with the Employment Security Division Offices for their respective campuses.

COMMUNICATION OF POLICIES AND PROCEDURES

During the months of November and December Unemployment Compensation Workshops will be scheduled by the Department of Personnel Administration and the Department of Staff Benefits and Payroll to discuss with all department heads and supervisors their legal responsibilities under this program, the management responsibilities in employment, and suggestions to help control potential claims and costs of the program.

Questions from the Lafayette Campus concerning Unemployment Compensation should be referred to your Business Administrator or the Director of Personnel Administration or the Comptroller, depending upon the nature of the question. Questions from the Regional Campuses should be directed to their Business Managers.

F.R. Ford
Business Manager and
Assistant Treasurer