Unemployment Payments To Out-Of-State Workers On Rise in N.D.

Aug. 01—BISMARCK, N.D. — The number of people living outside of North Dakota and claiming unemployment in the state has more than doubled in the last five years. The amount they're paid has more than tripled.

"The numbers have climbed quite a bit," said Darren Brostrom, director of unemployment insurance for North Dakota Job Service.

Since about 2008, claimants with out-of-state addresses have steadily increased each year.

From July 2013 through June 2014, there were 8,716 nonresidents claiming unemployment benefits, according to Job Service. That accounts for 39.6 percent of the total number of claimants.

From July 2008 through June 2009, there were 3,500 out-of-state claimants, accounting for 14.72 percent of total claimants. Ten years ago, from July 2003 through June 2004, there were 2,009, accounting for 11.38 percent of claims.

Out-of-state workers claiming unemployment also tended to have higher-paying jobs, causing payments to be higher, Brostrom said.

From July 2013 through June 2014, $42.7 million was paid out in benefits to out-of-state workers, accounting for 43.81 percent of all benefits paid.

From July 2008 through June 2009, $14.2 million was paid to nonresidents, which made up 15.44 percent of all benefits paid. Ten years ago, from July 2003 through June 2004, $5.4 million was paid and made up 12.19 percent of all benefits paid.

"That's a problem from my perspective," said Andy Peterson, president of the Greater North Dakota Chamber. "They end up drawing on our economy."

Despite more being paid out in unemployment benefits, North Dakota companies are not being burdened with paying more in because an increase in the number of businesses operating in the state has widened the pool of companies paying into the fund.

"There's still so much growth with employers that it's making up the difference," Brostrom said.

He said the increase in out-of-state claimants has affected his office in several other ways.

With nonresidents, Job Service often has to file a combined wage claim, contacting unemployment insurance agencies so North Dakota employers do not get charged for benefits based upon out-of-state wages. The wage transfer and billing process takes quite a bit more time than a North Dakota resident's claim would take and slows processing of all other claims.

"Job Service is funded almost entirely by federal funds, and the UI program within Job Service does not receive any state funds at all, so we have been flat funded for many years," Brostrom said.

"This has resulted in flat to declining staffing in the UI program. With the increase in out-of-state claims and the flat level of staffing, we have seen an impact in our claims processing," he said.

In addition to talking to more state agencies, Job Service has had more employers to communicate with in determining unemployment eligibility. It is a requirement for those receiving unemployment benefits to be seeking work and Job Service must talk to employers for this process, too.

"With many of these employers being outside of North Dakota, we have found it somewhat more difficult to get timely responses to our requests for information," Brostrom said.

The cost of unemployment benefits is covered by taxes paid by companies doing business in the state. The percentage rate of taxes paid by a company varies based on how often its former employees draw unemployment.

The maximum rate for 2014 is 9.76 percent and the minimum rate is 0.16 percent. Employers pay taxes on the taxable wage base. That base is $33,600 for 2014. The base amount is set annually at 70 percent of the statewide average wage.

A company paying the maximum rate pays about $594 per week per employee in insurance. A company paying the minimum rate pays $53.76 per week per employee.

The longest a person can claim unemployment is 26 weeks, Brostrom said. With the surplus of work in the state, North Dakota has the lowest duration of time for people drawing unemployment. Those receiving unemployment benefits from the state are averaging 10 weeks of payments.

"In the nation it's much higher than that," Brostrom said. "If you took out seasonal (employees) it would probably be lower … The goal is to get everybody back to work."

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