Terminating an employee can be a stressful process as a business owner. You may have done so due to budget cuts and downsizing, performance, misconduct, or more. Regardless, your former employee may be able to claim unemployment benefits that can increase your unemployment insurance premiums. This article will discuss how that process unfolds, as well as what you need to know as an employer to protect yourself from fraudulent claims to protect your bottom line.
Filing a Claim:
Once the employee is terminated, they must determine if they are eligible for unemployment benefits which can vary by state. These requirements generally include being laid off, terminated without cause, or other reasons for termination that do not include instances of severe misconduct. Again, these parameters can vary by state.
The former unemployed individual will need to file a claim through the appropriate government agency via online or phone. The claim will include information such as personal details, employment history, and reason for termination. The agency may even reach out to the employer to confirm the reason for termination.
After the claim is filed, the agency will calculate the amount of benefits the individual is entitled to receive. Once they are approved, the individual will receive benefits through direct deposit or a pre-paid debit card.
Requirements for Collecting Unemployment:
Generally, individuals collecting unemployment benefits are required to be actively seeking employment, and report their efforts to the state unemployment agency. A failure to do so may result in their benefits being stripped. These benefits are also typically only available for a limited period of time, and the exact duration can depend on the state, county, and can be extended due periods of high unemployment or economic decline.
Preventing Fraudulent Claims
As an employer there are a multitude of steps you can take to mitigate the risk of former employees obtaining unemployment benefits after they were terminated for misconduct, or quit. False claims can affect your insurance premiums and taking the following steps into account can save you a headache and money.
- Have a paper trail
Maintaining thorough documentation of the employee’s misconduct prior to their termination is imperative in the event you need to appeal an unemployment benefits claim. This documentation claim could include,
- Written warnings;
- Performance evaluations;
- Witness statements; or
- Any other relevant information and evidence
- Assert company policies
Ensure that your employees understand expectations of their job, and what constitutes misconduct. Furthermore, apply your company’s disciplinary policies on a consistent basis when needed. Documenting this prior to termination can be helpful evidence in an appeal.
- Respond swiftly to claims
If the former employee does wrongfully file for unemployment, it is crucial to respond promptly and professionally to any information requests from the state agency. Subsequently, it will also help your case to provide accurate and complete information regarding the termination when requested. This also includes participating in hearings, and any other processes where you can present your evidence.
- Consult with legal counsel
It can never hurt to consult with a labor attorney licensed in your state in regard to an unemployment benefits issue.
Taking these proactive steps can help minimize the risk of having to refute or deal with false unemployment benefits claims in the future.
If you have any questions regarding terminating an employee, and unemployment benefits claims, you can reach out to [email protected].