Employers should handle unemployment compensation claims carefully.
You will receive written notice from the state unemployment agency when a
former employee has filed a claim for benefits. In general, you may acknowledge
the claim as valid or dispute it. Because your unemployment compensation tax
is closely tied to your company's claims history, you should immediately challenge
any claim that you really believe is not justified. Not all claims are worth
contesting, of course, only those for which you have a strong, well-documented
case. In many states, it is assumed that a claim is valid if no information
to the contrary is supplied by the employer within a statutory deadline, typically
seven to 14 days of receipt of the claim notice. Once the response deadline
passes, it is usually too late to object to the worker collecting benefits.
For this reason, you may wish to consider sending your objection to the agency
by certified mail.
In general, the grounds for disqualification are narrow and are
interpreted in a way favorable to the separated employee whenever possible.
However, workers can be legitimately denied benefits for a number of reasons,
e.g., simply not earning enough in wages to qualify, following a discharge
for misconduct, or for voluntarily resigning “without good cause.” Good recordkeeping
is essential in successfully contesting any claim. Employers should keep track
of the facts surrounding each separation and know the state unemployment law.
Hearings. An in-person hearing usually will
be scheduled shortly after the filing of a written protest of the claim. You
will receive a written notice of the date, time, and place to report. If you
don't show up, the likelihood is that you will forfeit your right to contest
the claim any further.
Employers should be familiar with the procedures used by the
state unemployment agency in claims processing, particularly in how hearings
are conducted. Many states publish detailed guidance about the overall process. Check with your agency about the
availability of an employer handbook or similar information. Typically, this
information also can be accessed by visiting the agency's website.
In general, careful preparation for the hearing (usually conducted
by a hearing officer or referee) is essential. The top priority is to achieve
mastery of the facts of the case and
the ability to present your side in a concise, professional manner. Equally
important is a good grasp of the rules and the law that apply to your case
(be sure that the law supports your view that the worker was separated under
disqualifying conditions such as misconduct or voluntary separation without
good cause). Bring all relevant records and witnesses to the hearing. Legal
representation at the hearing may be appropriate--particularly in contentious
situations where other employment-related litigation may be anticipated. The
hearing officer will issue a written decision shortly after the hearing. Although
this may not be cost-effective, employers that are dissatisfied with the outcome
of the hearing can generally protest the hearing officer's decision to one
or more appeals within the state unemployment agency itself and then through
the state court system.
Termination for cause. If you are protesting
a fired employee's eligibility for benefits, prepare to show misconduct on
the employee's part. An employee who is fired for poor performance or judgment
will usually collect benefits. However, an employee who intentionally or deliberately
disregards certain standards of conduct or behavior may be denied benefits.
Fighting, insubordination, stealing, committing illegal acts on company property,
failing a drug test, etc., are often legitimate grounds for a misconduct-based
disqualification depending on the state. In addition, if an employer has a
written policy setting out standards of conduct and behavior and the employee
knew about the policy, intentional violation of the policy may rise to the
level of misconduct and result in denial of unemployment benefits. If there
is clear documentation that the worker's conduct was completely unacceptable,
that the employee knew or should have known that it was punishable by termination,
and that customary disciplinary procedures were followed, you may be on solid
footing to contest a claim. Furthermore, be sure that you can offer evidence
establishing that the employee was not singled out for discharge but given
fair treatment under your company's established policies and work rules.
Voluntary termination. Employees who resign
voluntarily and without good cause are usually disqualified from unemployment
compensation. While “voluntariness” is seldom an issue, “cause” comes up frequently.
“Good cause” (or an equivalent term such as “just cause”) is generally understood
to mean a real, substantial, and compelling reason that would lead a reasonable
person to quit under like circumstances. In most states, the employee must
establish that he or she had good cause to leave the job and that the reason
for leaving can be attributed, at least in part, to the employer's actions
or lack of action, e.g., failure to correct sexual harassment in the workplace.
An employers' best defense to an employee's claim that he or
she had good cause and should be granted unemployment benefits is a signed
resignation letter or statement from the employee setting forth the specific
reasons for separation. The best time to do this is while the employee is
still on the job, preferably as soon as you learn that the employee intends
to resign. A detailed resignation statement pins the employee down to the
reasons stated, and it gives the employer a basis for determining whether
the claim should or should not be contested. Moreover, if the employee claims
that he or she is leaving because of sexual harassment, retaliatory discipline,
unsafe working conditions, or discrimination (related to race, disability,
gender, national origin, religion, age, etc.), the employer can launch an
immediate investigation and contact legal counsel. A resignation may be found
to be tantamount to a “constructive discharge” if the conditions on the job
are so unpleasant that the employee is forced to leave.
Exception--domestic violence. In most cases,
good cause for quitting must be related to the job and not purely personal
to the employee. The most notable exception to this is voluntary termination
by an employee due to a domestic violence situation at home. An increasing
number of states are now including domestic violence in the list of good-cause
reasons for voluntarily terminating employment. Although state laws vary,
most provide at a minimum that an employee may be deemed to have left work
with good cause, and thus eligible for benefits, if he or she left employment
to protect himself or herself or his or her children from domestic violence
abuse. Many states require the employee to provide documentation of the abuse
or to have tried reasonable alternatives before quitting, such as a temporary
restraining order. In addition, many states do not charge employer unemployment
insurance accounts for compensation provided to victims of domestic abuse.