Fighting Unemployment Claims

There are millions of people in America out of work and many of them are filing for unemployment.

As an employer are you prepared?

The economy is continuing to slowly move in a positive direction as the national unemployment rate for the month of June was at 5.3 percent. You might be wondering how former employees are entitled to collect unemployment benefits. Typically, employees who are separated due to a layoff or for poor performance are entitled to receive benefits, while workers who voluntarily resign or are terminated for misconduct are not allowed to apply for unemployment.

Ultimately, if a former employee files a claim, companies do have the option to contest that claim. If an employer contests a claim, here are three key practices to follow that can greatly improve the chances of successfully contesting an unemployment filing.

  1. Respond promptly. There are deadlines and specific information given for this process.
  2. Document EVERYTHING on every employee and keep accurate and complete records of those documents.
  3. Note probationary periods.

Several states have probationary periods that vary in length from 30 to 120 days. For employers in these states, benefits received by any employee for any reason are not charged against the employers tax account as long as the employee is terminated within the probationary period and the employee was aware of the probationary period. Employers should document probationary periods and terminate employees who show no improvement within the probationary period. This will limit the liability and related tax increases even if the employee receives benefits.

As with anything, remember the amount of unemployment given is not always accurate. States send employers a record of all charges against the employers tax account during the year. The reports include the names of former employees who are receiving benefits and the total amount received through a certain date. Some states have reported that up to 15 percent of the charges imposed against employers can be inaccurate. Employers are advised to carefully review charge statements because the window to contest erroneous charges is very small.

Few companies are experts in fighting unemployment claims; if this happens to your business, seek professional council and help to guarantee it is processed as quickly and accurately as possible.

Remember if you are not happy with a new employee and their conduct, let them go during the probation period to guard your company from having to deal with a possible unemployment issue.

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