NFIB

Unemployment Claims
07/ 28/ 2003

by Charles R. McConnell

Regardless of the reason for unemployment, many departing employees file for unemployment compensation. Some businesses have made it a practice of automatically objecting to every unemployment claim received, forcing every claim to a hearing. However, this is not a recommended practice. Not only will the business be pouring time and effort into a losing cause, it can also build a reputation as a hard-nosed employer with the community and local unemployment office. The following tips can help you prevent unemployment and keep unemployment claims from ruining your business's reputation:

Preventing Unemployment Claims

The most effective control starts up front with care and thoroughness in hiring. Don't simply hire the first person to walk in. It's a mistake to hire quickly, perhaps thinking, "If this one doesn't cut it, I can always get another." This simply boosts hiring costs and raises your vulnerability to unemployment claims.

In hiring, orientation, and especially disciplinary action, scrupulously follow all existing policies and rules and maintain complete records. Many discharged employees who should not have been entitled to unemployment compensation have been granted it simply because of inadequate evidence of their transgressions.

If an employee, having received all reasonable instruction and guidance, is still not meeting the minimum standards of the job by the end of the organization's probationary period, it's probably best to cut the person loose at this time to minimize unemployment cost exposure. (In the absence of a formal probationary period, a period of three months is a reasonable period for getting "up to speed" on most jobs.)

Instead of hiring to cover needs for a limited duration, consider the use of temporary help. Generally, covering any particular need of less than six months with temporary help reduces the company's exposure to unemployment costs.

Understanding Unemployment Claims

It never makes sense to fight a claim of someone released for lack of work or because of the inability to properly learn the job or maintain standard performance.

Whether an employee resigns or is discharged, before resisting a claim, it is wise to look at the status of the individual and the reasons behind the departure. Consideration of such circumstances as changing transportation or child-care arrangements can suggest that a hearing determination may likely favor the employee.

When a discharge-for-cause involves a significant violation of policy or work rules -- for example, fighting, being under the influence of alcohol or drugs or numerous other major infractions -- any claim should be resisted.

To help you win a case against this type of employee termination, you should keep thorough records concerning the offending conduct.

A claim made following a normal resignation-for accepting another job, moving to another location or the oft-cited "personal reasons" -- should be resisted. But even some instances of normal resignation can result in legitimate claims: consider the individual who departs to accept another job only to have the new employer then withdraw the offer.

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