With the coming holiday crunch season for retailers, unemployment claims are probably the last thing on your mind. But January is just around the corner, so here are some tips for effective handling of unemployment claims.
Pay attention to the deadlines. Unemployment departments are notoriously unforgiving if you miss a deadline or file a late appeal. Immediately upon receiving notice that someone is claiming benefits, figure out when your response is due. Sometimes you will have a week or two; sometimes your response will be due tomorrow. If you miss a deadline, you can try to explain to the unemployment folks why you missed the deadline and why you should be allowed to dispute the claim, but it will be an uphill battle.
Know the rules. When you first begin handling these claims, take some time to familiarize yourself with the basics of what will disqualify an employee from receiving benefits in your state and what will not. Although the criteria vary from state to state, generally an employee who lost his job through no fault of his own is entitled to unemployment benefits. Thus (for example), there is usually no point in wasting your time arguing that an employee should not receive unemployment because she was laid off due to lack of work. You should also learn the procedural mechanisms for handling claims.
Consider whether you want to challenge the request for benefits. This ties in with the previous point. You shouldn’t reflexively fight every unemployment claim. Take a few minutes to think through the implications. For example, if an employee is terminated for declining performance after 20 years of service, you might not want to contest his claim. If you think an employee may file a charge or lawsuit against your company, you might not want to poke the bear by disputing her unemployment claim. On the other hand, if the employee was terminated for dishonesty, harassment, threats or violence, or other strong grounds, fighting the claim is usually a good strategy. The point is to look at each case on its own merits (or lack thereof).
Be detailed. You may not have the time, energy, or inclination to write a dissertation in response to every unemployment claim. However, you must provide enough detail and documentation to allow the unemployment agency to understand why you terminated the employee and why that decision was appropriate.
For example, let’s say that you terminated an employee for falsifying company documents. However, the employee claims that he was never told that the behavior was against company policy and that everyone else does it. You need to be prepared for that argument. You will be in a stronger position to contest the unemployment claim if you have provided a written policy against falsifying documents and documentation showing that the employee knew about the policy. Providing yourself a foundation to dispute this type of claim is yet another reason why it is so important to have clearly written and widely distributed policies.
Detail, organization, and documentation are even more important during the appeal of an unemployment claim. At that stage, you will need to provide copies of all the documents that support your claim or that you want to ask the claimant about. If you do not provide the information to the unemployment agency, the agency cannot and will not consider it.
Ensure the reason for termination is complete, and consistent from the beginning to the end. Take the time to think about the real reason for the employee’s termination at the time the termination occurs. Then, when you respond to the unemployment claim, state this reason clearly and completely, and never waver from it. This is not as simple as it may sound. For example, suppose you had a marginal employee and took advantage of a reduction in force to terminate the employee. If all you tell the unemployment agency is that the employee was terminated because of a “reduction in force,” you may have difficulty using the “marginal employee” part later in the event of a charge or lawsuit. Even worse, the fact that you appear to be changing your story may be used against you. Your initial response to the unemployment claim should state a reason to which you can commit for the long haul.
Some states, like Missouri and Minnesota, require that a terminated employee be provided with the reason for termination upon request. In those jurisdictions, the same principles would apply to the reason given to the former employee.
If the employee gets a separation agreement, make sure that it spells out that you will have to tell the truth to the unemployment agency. Sometimes, as part of a separation agreement, a terminated employee will be allowed to “resign” in lieu of involuntary termination. This puts the employer in a dilemma. Employees who voluntarily resign are usually not entitled to receive unemployment benefits, and your employee (who has actually been fired) is probably going to want and need it. But if you truthfully tell the unemployment agency that the employee was involuntarily terminated, you may be in breach of your agreement. The best way to deal with this problem is to preemptively address it in the agreement. The parties can agree that the employee will be allowed to resign and that you will tell most of the world, including co-workers and prospective employers, that the employee quit. However, the agreement should expressly allow you to provide the true reason for termination to unemployment agencies, other governmental agencies, and the courts if need be.
Be prepared for questions. Particularly at the appellate level, you need to think about the questions that the unemployment agency and your former employee will ask you, and have your answers ready. If your position is that the employee misused company time and equipment by spending hours of time on Instagram during the workday, then be prepared to talk through how you found out about this behavior, the company’s policy on use of electronic equipment, and what steps you took before terminating the employee. If you terminated the employee on the first offense, be prepared to explain why you believe this behavior is so severe that you had to immediately fire the employee. If you terminated the employee after the third offense, be prepared to explain the employee’s past behavior and all the warnings you provided about the problematic behavior. And with all due respect to those working at the unemployment agencies around the country, be prepared for aggressive, even rude, questioning. If you’re nervous, consider practicing in advance with a colleague.
You can always call your favorite employment lawyer if you anticipate litigation, if you’re not sure whether a particular claim is worth fighting, or if you just want someone else to handle the claim. If you follow these tips, you will be well on your way to effectively handling unemployment claims.