Safeguard Your Company from Unemployment Claims

guy at desk with laptop

Did you know that claims for unemployment benefits from former employees can increase your State Unemployment Tax Act (SUTA) tax rate?

Managing the unemployment process can sometimes take excessive resources making it difficult for business owners to give unemployment claims the attention they require. Nextep manages this process for our PEO clients and can help companies keep costs down through proper unemployment claims management. 

Starting point

Company owners and leaders should know exactly what unemployment benefits are and what to do when a claim occurs. Some mistakenly think that employment that ends for any reason entitles the former employee to unemployment benefits. In reality, unemployment is meant for people who temporarily or permanently lose their jobs through no fault of their own, such as through a reduction in force or weather-related disaster. Voluntary resignations to work elsewhere are generally not eligible for unemployment benefits. 

In terminations for cause, unemployment is usually denied when the employer can prove willful and gross misconduct on the part of the employee. This is where proper documentation becomes highly important.

If you’re managing this, you’ll need the following documentation upon receipt of a claim:

  • Termination reason and date.
  • Resignation letter if the employee quit.
  • Handbook acknowledgment signed by the employee.
  • Signed written warnings, performance improvement plans, reviews, and the final incident that led to any terminations for cause.

When investigating unemployment claims, the state often focuses on the final incident. If a company terminates an employee after being tardy 20 times, the state will want to know what about this particular tardy warranted termination when the other 19 were allowed. Progressive discipline and documentation are imperative in fighting these claims and providing proof of a final incident that justified termination. 

Handling unemployment claims

If a PEO client receives an unemployment claim, the first step is to call your PEO’s HR specialist immediately for step-by-step guidance. If you’re not with a PEO, refer to your company’s HR specialist.

In handling unemployment claims, Nextep’s HR business partners often see ways a company loss could have been avoided. These tips will help give your company a stronger defense when dealing with claims for unemployment compensation from former employees.

  • Document, document, document. If it’s not in writing and signed by the employee, it is difficult to introduce it as evidence in an unemployment hearing. All performance improvement plans, disciplinary notes, and other important information should be communicated and well documented leading up to the termination.
  • Give the employee clear direction. The state looks at whether you give the employee chances to succeed, including thorough training and clear direction on performance issues.
  • Get signed acknowledgment. Simply documenting an employee’s poor performance without clear communication and signed acknowledgment is not enough. Disciplinary notices, receipt of employee handbooks, and special training should all be accompanied by a signed acknowledgment from the employee with the opportunity for the employee to provide feedback.

Need guidance when it comes to unemployment claims or anything related to employment? Nextep experts are ready and willing to help, contact us today!

Also on Nextep

Ah, the holiday season—a time for joy, festivities, and the age-old puzzle of compensating your employees. Let’s demystify the rules of holiday pay for both our hourly (nonexempt) and salaried (exempt) workers. For the Hourly Heroes Picture your business decked out in holiday cheer, but your nonexempt employees are sipping cocoa at home. Under the […]
Read more
Keep Your Party Pants Professional As the year ends, and you’ve achieved feats at work that deserve a standing ovation, the holiday office party is your well-earned, much-awaited reward.  But beware! When the festive spirit meets the allure of a bottomless drink supply, things can take a wild turn, leaving you nursing a hangover, regret, […]
Read more
We’ve talked recently about the importance of sustainability in business. Let’s take it a step further and look at ESG, or Environmental, Social, and Governance.  The Impact of ESG on Companies Environmental (E) Companies that focus on their environmental impact are making a positive change. They reduce their carbon footprint, use clean energy, and find […]
Read more
Sustainable business isn’t just for hippies! As we discussed in our previous article, sustainability is increasingly important to today’s business. It is a crucial and relevant issue that affects everyone and every organization, regardless of industry or beliefs. Sustainability involves taking a long-term, holistic view of how we interact with the environment and our communities, […]
Read more
At Nextep, we aim to stay informed about CEO concerns in order to better help with problem-solving. We were surprised to learn that sustainability has become a top concern. The statistics bring CEO concerns to light: A Gartner survey found that CEO concern about sustainability has increased 292% from their 2021-22 survey. In a survey […]
Read more
It’s not the most savory of topics, but still merits discussion. All of your employees will need to use the bathroom during work. Here’s a potty primer, if you will. Disability and Bathrooms The Americans with Disabilities Act (ADA) has clear regulations on bathroom accessibility in the workplace. Much of the guidance revolves around making […]
Read more
We’ve reported at length about preventing discrimination in the workplace. But let’s take a step back now and brush up on Title VII, the sweeping regulation that started it all.  Title VII of the Civil Rights Act forbids discrimination in any aspect of employment, including hiring, firing, pay, job assignments, promotions, layoff, training, fringe benefits, […]
Read more
Time to check your handbook again for NLRB compliance The National Labor Relations Board (NLRB) has been busy shaping employee handbooks and workplace policies. With the recent Stericycle Inc. decision, the NLRB has introduced a new legal standard for evaluating employer work rules under Section 8(a)(1) of the National Labor Relations Act (NLRA).  Understanding the […]
Read more
The Answer Depends on Your State…For Now As we reported in January, non-compete agreements preventing employees from working for competitors are becoming increasingly unenforceable. The FTC is currently working on banning them at a federal level, but unless and until that decision comes, non-competes are enforced at a state (and sometimes even local) level.  As […]
Read more
When hiring workers, knowing whether they’re employees or independent contractors is essential. The difference between the two can significantly impact your business, including your tax liability, your liability for workers’ compensation claims, the worker’s rights and benefits, and your ability to control how your workers do their jobs. Read all about it here, and check […]
Read more
Employers Must Now Prove “Substantial Increased Cost” to Deny Religious Accommodation Recently, the Supreme Court ruled that employers must now demonstrate a substantially increased cost to deny an employee’s request for a religious accommodation.  This ruling, which comes in the case of Groff v. DeJoy, clarifies the standard for “undue hardship” under Title VII of […]
Read more
Here’s How the Recent Ruling Affects Your Company You may have read that in late June, the Supreme Court struck down affirmative action in college admissions. Here’s the implication this ruling could mean for you as a small or medium-sized business owner. To be clear, the Supreme Court’s decision on affirmative action does not explicitly […]
Read more

Download Our App