_From the HR Pros of the HR Support Center
"You’re fired!" If you have ever said that to an employee (unless you are Donald Trump and filming the reality show “The Apprentice”), you should be prepared to pay for your now former employee’s unemployment claim. If an employee walks out and therefore terminates employment voluntarily, you may still be required to pay for unemployment. Confusing? You bet.
Involuntary vs. voluntary terminations
Terminations are part of the employment life-cycle. A voluntary termination results when an employee chooses to resign. An involuntary termination results when an employer fires, discharges, or lays off (due to budget, workforce reduction or business closure issues) an employee.
When do unemployment benefit claims apply?
If employers do involuntarily terminate, they should determine if unemployment benefit claims may apply and prepare to defend accordingly if the benefits are granted. Eligibility criteria impacts how unemployment benefits may be awarded. Some of the criteria for eligibility for unemployment benefits includes whether the terminated employee:
* Became unemployed through no fault of his or her own (e.g. job
elimination or reduction in force)
* Earned sufficient wages with the company or during the claimant’s base year
* Is available for new work
* Is actively seeking work
An individual may become disqualified for unemployment benefits if he or she:
* Was fired for misconduct or a clear violation of company policy
* Quit without good cause (e.g. walking off the job because of a disagreement with a colleague)
* Returned back to the same job to work
* Turned down a suitable job offer during the unemployment period
* Participated in a strike or work stoppage caused by a labor dispute
* Received Social Security benefits, severance pay, workers’ compensation payments, state disability benefits, or a private pension
* Made false claims or omitted information on his or her unemployment claim
In addition, the weekly benefit amount is generally determined by the total wages paid to the employee by his or her employer(s) during the "base" period. The base period typically consists of a minimum amount of work completed within the last five quarters of a calendar year prior to the initial filing for benefits and the amount of earnings during the base period.
Sometimes, employers futilely try to avoid addressing unemployment insurance claims. Now, if you know the employee was discharged through no fault of his or her own, save some time and do not appeal the claim. In other situations, it may be worthwhile to appeal a claim when the employee was terminated for issues such as misconduct, policy violations, or a general unwillingness to perform work. The benefit to employers in defending the claim may result in the employer tax rate being lowered or not increased. Your employer unemployment tax rate is directly impacted by the number of successful claims charged to your account.
If you do opt to dispute an unemployment claim, ensure you have gathered all records that may influence the denial or awarding of an unemployment claim, such as performance management evaluations, disciplinary notices/letters, individual complaints, investigation information (if theft, harassment, or workplace violence was an issue), witness statements if applicable, etc. Ensure all paperwork is also ready for the state unemployment agency in a timely manner. If paperwork is delayed, there is a chance the former employee may end up winning the battle by default or forfeiture.
Want more helpful answers to your HR questions? Subscribe to Paycor’s HR Support Center. Or, upgrade to HR On Demand to get personalized answers and advice from an HR professional. Contact us to learn more.
This content is intended for educational purposes only and should not be considered legal advice.
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