New Penalties for Failure to Respond to VEC Unemployment Claims

Virginia law now subjects employers to increased penalties if they fail to respond to Virginia Employment Commission (VEC) requests for unemployment benefits information within 10 days. Effective July 1, 2025, repeated noncompliance can result in civil penalties and loss of appeal rights.

Below, we explain the changes to the law and concrete steps for employers to take.

Increased Penalties for Failure to Respond to VEC

Virginia Code § 60.2‑528.1 requires employers to “adequately” respond to VEC requests for information regarding unemployment benefits within 10 calendar days of delivery. A response is “adequate” if it provides sufficient and accurate information for the VEC to make a decision on a claim for benefits, such as whether the employee was fired for cause.

Before, an employer was only subject to a $75 civil penalty upon a third determination that it failed to respond in time. Now, the VEC employs a more severe three-tiered system:

• First failure: the employer receives a warning letter
• Second failure: the employer is assessed an increased civil penalty of $100
• Third (or additional) failure: the employer loses its appeal rights to the decision and will not be credited for any overpayment resulting from the decision

These determinations remain in effect for the duration of the VEC “review period,” which is a four-year span ending on the June 30 before the VEC’s next yearly recalculation of the employer’s benefit charges.

Good Cause Exception

As before, the VEC will excuse a failure to respond if the failure was for “good cause.” “Good cause” means “due to compelling and necessitous circumstances beyond the employer’s control,” or when the VEC failed to deliver the request to the correct address or to a designated attorney/authorized representative.

Steps for Employers to Take: Respond Quickly and Accurately

Under the previous version of the law, there was little risk if an employer who did not contest a former employee’s unemployment benefits claim simply did not respond to the VEC. But now failure to respond can carry potential penalties and loss of appeal rights.

To avoid that risk, employers should:

• Update internal processes to ensure an accurate response to VEC requests within 10 calendar days of receipt
• Update their contact information with the VEC
• If a third party processes unemployment claims, notify them of this change in the law
• If you believe it will be difficult to respond within 10 calendar days, document why, then notify the VEC that you are working diligently to answer the request

Employers can respond to the VEC electronically, by fax, or by mail. More information can be found on the VEC website.

If you have questions about unemployment benefits claims, please contact the authors of this article or any member of the Woods Rogers Labor & Employment team.