Legal Services and Collection FAQs - Unemployment Insurance

These FAQs include information about the Legal Services and Collection (LSC) unit, such as the services provided, contact methods for claimants (individuals who apply for unemployment insurance benefits) and employers, and actions a claimant/employer can take if a judgment is filed against them.

1. What services does LSC provide?
2. How do I contact LSC?
3. When is legal action taken against a claimant/employer?
4. How are claimants/employers notified that a legal collection process will begin?
5. What is LSC’s legal collection process against an employer?
6. If an employer/claimant has a judgment filed against them, what actions can the individual take?
7. What if my charter with the state was forfeited (for nonpayment of UI taxes) or cannot be revived due to a charter block by Maryland Department of Labor?

1. What services does LSC provide?

LSC:

• handles the legal aspects of collecting delinquent unemployment insurance (UI) taxes from employers (by filing liens, garnishments, and establishing personal liability);


• collects claimant overpayments by filing lawsuits in Maryland District Court and U.S. Bankruptcy Court;


• administers bankruptcy cases (filed by employers, owners, and claimants);


• represents the Maryland Division of Unemployment Insurance (the Division) in appeals cases (before the Lower Appeal Division and the Board of Appeals);


• represents the Division in legal actions and lawsuits filed in state and federal courts;


• establishes charter forfeiture issues and processes bulk sale notices;


• renders review determination decisions (in response to wage adjustment protests and audit determination protests); and,


• administers data sharing agreements, legal research, and renders opinions and advice to the Division’s units, when requested.

2. How do I contact LSC?

Employers and claimants may contact LSC by email or mail.

• Employers may email: dluicdlegalcollections-labor@maryland.gov
  
  
  
  • Employers who have questions about a lien filed against them or who are seeking a lien payoff should contact LSC through the email address listed above (dluicdlegalcollections-labor@maryland.gov) or to the mailing address listed below.
  
  
• Claimants may email: UI.litpros@maryland.gov
  
  
  
  • If the Division has obtained a judgment against a claimant, the claimant should contact LSC through the email address listed above (UI.litpros@maryland.gov) or to the mailing address listed below.
  
  
  • NOTE: Only LSC has authority over this judgment.


• Employers and claimants may contact LSC by mail at: Legal Services and Collection, Maryland Department of Labor, 1100 North Eutaw Street, Room 401, Baltimore, MD 21201.

Note for Claimants: If you are a claimant seeking information about a lawsuit filed against you, contact:

• the attorney of record in LSC; or,
  
  
  • The contact information for the attorney of record (name, email, and direct phone number) is displayed on the legal document served to the claimant.
• LSC by email at ui.litpros@maryland.gov

3. When is legal action taken against a claimant/employer?

Claimants
LSC takes action against a claimant when:

• the claimant fails to arrange repayment of an overpayment (within a reasonable time). Lawsuits are filed in the Maryland District Court; and,


• the claimant files a bankruptcy case and the Division has a fraud overpayment against the claimant (in this circumstance, the LSC may file an adversary proceeding to prevent discharge of the debt and to obtain a judgment). LSC also files proofs of claim in claimant bankruptcy cases.

Employers
LSC takes action against an employer when:

• an employer fails to make arrangements to repay a delinquent debt within a reasonable time; and,
  
  • LSC may request the Maryland State Department of Assessment and Taxation (SDAT) to forfeit the corporate charter of an employer with delinquent debt owed to the Division.
  
  
  • LSC also enforces personal liability against responsible officers and owners particularly after charter forfeiture.


• an employer files for bankruptcy. In this circumstance, LSC files proof of claim and represents the Division as a creditor in the bankruptcy case.

4. How are claimants/employers notified that a legal collection process will begin?

• Employers are personally served with complaints and summons (which include court information and attorney contact information).


• Claimants are personally served with lawsuits and summons (which include court information and attorney contact information on the legal papers).

5. What is LSC’s legal collection process against an employer?

An employer will receive a few notices from the Division before taking legal action.

1. Delinquency Notice - When an employer misses quarterly contribution reports and payments, the Division sends employers a Delinquency Notice. If the employer does not resolve the missing reports and payments (file reports, pay in full, or establish a payment plan) within 45 days, the Division will send an Assessment Notice and Pending Civil Action letter.


2. Assessment Notice and Pending Civil Action Letter - This letter is the second notice an employer receives to inform them that they are missing quarterly contribution reports and payments. If the delinquent reports/payments are not resolved within 30 days, legal action will be taken against the employer.
   
   
   • For details about the notices described above, see the Delinquency and the Assessment Notice & Pending Civil Action webpage and video.

If an employer has not resolved the delinquency (in a timely manner) after receiving the two notices described above, legal action will be taken. This process includes:

1. LSC will begin the lien process to collect the delinquent payments.
   
   
   
   • When LSC files a lien against an employer, the lien does not expire until it is paid off.


2. When an employer remains delinquent for multiple quarters, LSC may cause the employer’s charter to be forfeited with Maryland SDAT. This normally occurs every October;


3. LSC establishes by assessment notice personal liability for responsible owners, officers, and employees.

6. If an employer/claimant has a judgment filed against them, what actions can the individual take?

• An employer may contact LSC to enter into a payment plan or to negotiate the settlement of a lien.


• A claimant may contact LSC to enter into a payment plan (to avoid garnishment of wages).

7. What if my charter with the state was forfeited (for nonpayment of UI taxes) or cannot be revived due to a charter block by Maryland Department of Labor?