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Unemployment Claims: – What Employers Should Know

May 17, 2009

By Tom Kelley,
SPHR, Sr. Vice President
IEC Group

Unemployment claims can be costly to your organization if not managed effectively. In order to assist the unemployment office to make an accurate decision about an employee’s benefit eligibility, each termination situation and decision should be well documented including the specific reason for the termination. Below are general guidelines on eligibility criteria for unemployment benefits:

1) When the termination is voluntary, the employee should provide written notice to the employer indicating the reason for termination and the effective date. With the exception of constructive discharge occurs, voluntary resignations are not eligible for unemployment benefits.

2) Constructive discharge is a forced resignation. Meaning, the employer made the work conditions so unbearable for the employee, the employee had no other alternative but to leave the company. In this situation, the employee will normally be eligible for benefits.

3) If an employee is “let go” due to no fault of their own such a reduction in force, the employee will be eligible for unemployment benefits.

4) Employer initiated terminations or termination “for cause” that are based on misconduct and/or job performance, usually means the employee is ineligible for unemployment benefits. Examples of misconduct or performance problems that lead to termination and denial of unemployment benefits include: fraud; insubordination; intentional violation of an established policy and other actions that are clearly not in the best interest of the employer.

5) Employers must complete and return unemployment forms within the time frame required by the unemployment office, which is noted on the forms and is typically a 10 day period. Otherwise, the employee may still receive benefits and the employer’s account will be charged.

It is important to note that the above are guidelines. The unemployment office truly evaluates every case and benefit determinations are based upon many factors including: documented circumstances; reason for termination, who initiated termination etc… Each party has the right to contest the unemployment decision.

By establishing a formal process for responding to unemployment claims in a timely manner with accurate information and by maintaining clear documentation; you will help your company manage unemployment costs and ensure a smooth process.

  
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