Indeed the unemployment insurance process can be quite complicated for all parties involved. Even though most states in the United States have recently published detailed handbooks on how to proceed, employers are often left in the dark about the implications they will face if they don’t respond to unemployment insurance claims.
Note that when employees are fired or terminated for any reason, if they should apply for unemployment benefits, the employer is expected to respond to the claim. A formal notice is mailed to the employer or its registered third party administrator when a claim for UI benefits is filed.
Have it in mind that this report offers general information about the claim, including the reasons the claimant states they are no longer working. In addition, this report is the first opportunity for employers to respond and provide eligibility information. That is why it is very pertinent for the employer to respond in writing within 10 days of the mail date at the top of the UI notice about the claim.
Even if there is a slim chance that the ex – employee might get disqualified from receiving benefits, it’s very important that the employer still responds to unemployment insurance claims in a timely manner.
Have it in mind that an employer’s unemployment tax rate is directly affected by the number of ex-employees who have collected unemployment after leaving their business, and not responding promptly to an unemployment insurance claim can directly affect an employer’s tax rate.
If there’s any chance that an employer gets hit with a discrimination or wrongful discharge lawsuit, the employer may increase their chances of winning the UI compensation hearing by responding to the claim. Also, if a claim is not responded to timely, the employer may not a get a credit for any benefits that are ultimately determined to have not been properly paid.
Remember, all UI benefits are financed through federal and state unemployment taxes which are paid by employers. Every state is different, but generally, they all base the employer’s tax rate on the amount of benefits paid to former workers.
If a business fires or lays-off workers only when absolutely necessary, uses the proper procedures to do it, and routinely contests unemployment benefit claims, they can lower their unemployment tax rate. But if an employer ignores these claims, they may find their unemployment taxes eating into their bottom line. If the employer does not respond or responds too late, the worker could automatically get UI benefits, in most states.
Responsibilities of an Employer During the Unemployment Claims Process
Note that when an employee is separated from work, there are many steps the employer and employee are expected to take to ensure that eligibility is determined accurately. As an employer, it is pertinent you learn about what you can do to promote an effective claims process, including responding to requests for information from the Department of Unemployment Assistance (DUA). You will also learn how to protest benefit charges or appeal an unemployment determination.
Know the Eligibility for Unemployment Benefits
Have it in mind that the eligibility for unemployment benefits is based upon 3 categories:
- Reason for separation from job
- Work search requirements
Also note that a worker may be initially eligible for unemployment benefits if they:
- Are separated due to layoffs
- Are totally or partially unemployed
- Are discharged for reasons not related to deliberate misconduct or violation of an employer rule or policy
- Quit for reasons attributable to the employer, or for an urgent, compelling, necessitous reason
Notify Employees of Their Options Upon Separation of Employment
Immediately an employee is separated from employment, irrespective of the circumstance, it is the responsibility of the employer to issue the employee a copy of the DUA pamphlet,How to Apply for Unemployment Insurance Benefits (Form 0590A). Note that the law allows you 30 days to distribute this information to all permanently and temporarily separated employees.
The pamphlet includes space for the employer to record your federal employer identification number (FEIN) and mailing address to ensure accurate filing of the claim and mailing of the claim notice. The pamphlet should be issued in person whenever possible, but can be mailed when an employee is not available.
Respond to DUA with Information in a Timely Manner
If an employee who worked for you within the past 15 months files a claim, you are seen by law as a base period employer and you may receive a request from DUA to provide information regarding the employee. You will also be able to complete these requests through your UI Online account. Note that any employer for whom the employee worked during the last 8 weeks of work (prior to the filing of the claim) is considered an interested party to the claim, and has the right to protest an employee’s eligibility for unemployment benefits.
But if an employee is approved for benefits by DUA, protesting interested party employers receive notice of the approved claim and have the right to request a hearing within 10 business days (provided the request for wage and separation information was returned to DUA timely and adequately). A disqualified employee can also request a hearing.
Review and Record the Approval or Disqualification Notice
Have it in mind that you will be notified of any approved or disqualified claims if: You are an interested party employer, and if you returned the separation request within the required time frame. However, if a claim has been approved for payment, you will receive a determination notice with information about your appeal rights and instructions on how to request a hearing.
Note that if you were a base period employer but the claim arises due to separation from subsequent employment and you returned DUA’s request for information in a timely manner, your account should not be charged for benefits paid on that claim as long as the former employee was separated under disqualifying circumstances. If charges are assessed to your account, you have the right to protest those benefit charges.
Comply with Ongoing Claim Activity
Most times, an individual may stop receiving benefits, but later reapply for benefits. This is called reopening a claim. If you are an interested party to the claim, DUA will likely contact you to obtain information necessary to evaluate the claimant’s eligibility to receive benefits. If you receive a request for information, it is pertinent to respond in a timely manner.
Even though you may not accrue charges resulting from a claim being reopened, charges may result on a subsequent claim. Note that providing the requested information promptly will protect your rights should any charges result. Additionally, the separation information you provide may somehow impact the claimant’s right to continue to receive benefits on the current claim. However, the eligibility requirements for a reopened claim are the same as those for a new claim. If a claimant returns to work and then becomes unemployed under disqualifying circumstances, no further benefits will be paid.
But if an employee is recalled to work but fails to report, you must notify DUA in writing within 5 days. You must include the following information in your notice: Employee name, Social Security number, Occupation, and Recall date. DUA will then determine if the individual had good cause for failing to return to work. A disqualification of the individual may result if DUA determines that there was no good cause.
Control Unemployment Insurance Costs
As an employer, have it in mind there are many things you can do to control your unemployment insurance costs. You should:
- Budget and forecast for likely contributions due
- Keep your UI Online account up to date
- Maintain your rights to claims filed by former employees
- Explore alternatives before laying off employees
- Re-hire workers after layoffs
Things like unemployment claims are bound to happen sooner or later: An employee leaves the company, and a few weeks later you receive a notice from the state saying the employee has filed an unemployment claim. However, there are smart ways employers can simplify managing the claim process. There are companies who specialize in management of UI claims for employers. From the beginning of a UI claim through the entire hearing and appeal process, these experts can ensure responses and forms are completed on time.