Several factors determine if an employee is entitled to unemployment benefits. Still, a former employee may file for unemployment benefits even if they are not eligible. An employer can contest the employee’s claim. Their eligibility depends on if an employee quit, was laid off, or was fired. Here are a few things to consider when deciding to contest an employee claim for unemployment benefits.
Was the employee laid off?
While the rules vary from state to state, when an employee is terminated involuntarily and their termination was due to budgetary reasons and no fault of their own, they are eligible to receive unemployment benefits. If granted unemployment benefits, they can receive on average weekly payment of 36 percent of their weekly wage. In most states, the benefits usually last for about 26 weeks unless an extension is granted. An employee who has lost a job through a layoff or reduction in workforce is always eligible for unemployment benefits.
What caused the employee to be fired?
Firings resulting from poor performance because of lack of skills, good faith errors in judgment, inefficient work habits, poor relations with coworkers, or off-work conduct does not disqualify or justify denying benefits to a terminated worker. The misconduct that will disqualify an employee from receiving unemployment benefits is misconduct that willfully or substantially injures the company’s interest’s. Such as:
• Fighting
• Sleeping on the job
• Stealing
• Reveling trade secrets
• Sexually harassing coworkers
• Extreme insubordination
• Intoxication on the job
You will need proof of this misconduct. Document these actions for your records, and to use in contesting an unemployment claim. Emails, written notes, warnings — anything to prove that the employee was fired for cause to prove your case to the state unemployment agency.
Why did an employee quit?
The law requires the employee’s reason for leaving to be “compelling”. The worker would have to suffered some sort of harm or injury by staying. An employee who quits or resigns from a job will be eligible for benefits only if the employee resigned for “good cause.” Quitting a job for lack of job dissatisfaction is not necessarily “good cause”. The reason the employee left must be the sort that would have made any reasonable person leave. Most states would allow the worker to collect unemployment benefits if an employee leaves a job because of intolerable working conditions or there are serious threats to the worker’s health or safety.
Should your company contest the claim?
You do have the option of contesting an employee’s application for unemployment benefits, and that option gives your company a great deal of power. But the state’s unemployment office will ultimately decide whether a former employee can receive unemployment benefits. Your company should contest a claim only if it has grounds to do so — meaning that the employee engaged in serious misconduct or quit without a compelling reason.
Why not to contest a claim?
Contesting a claim cost time and money. Attaining counsel to represent your company may cost more than an increased in your unemployment insurance and there is no guaranty you will win. Your company might want to give up its right to contest an unemployment insurance claim even in the case of misconduct as a part of a severance package. Your company would agree not to contest unemployment benefits and the employee agrees to not file a wrongful termination claim.
Contesting an unemployment claim may seems like a pretty straightforward process, but it’s not always as cut and dried. The state’s unemployment office can provide additional information. Do some research before deciding to move forward by contacting your state’s unemployment office for specific information about the law in your state.
