December 11, 2013

How Can You Avoid Paying Unemployment? NOT by Avoiding the Paperwork

a large stack of unemployment paperworkl

I used to joke that you could fire an employee for shooting you in the leg, but unless you could provide video, two witnesses, and a doctor’s note at the unemployment hearing, the employee would still win. And this was true whether you had one employee or one hundred.

Sentiment across the country was – and often still is – that if you are going to lose 99% of the time, why take the time to fight claims?

Fact is, I still advise frustrated managers and employers that they need to weigh the time they spend fighting an unemployment claim against the benefit and probability of winning. But two new thoughts come to mind that I want to share.

First, times have changed over the past four years (imagine that!). More to the point, state budgets have changed. This has turned out to be good for employers. Why? Because having good policies and taking time to document the reasons for termination can be game changers for the employer in hearings. (For a broader look at how unemployment insurance works and what you might do prior to a claim, see our Unemployment Insurance article on the subject.)

Secondly, attorneys are starting to warn the HR community that what you don’t do can come back to bite you. This can be particularly true when you know or suspect that the probability of litigation is high with a specific employee that needs to go.

So with those caveats in mind, it doesn’t hurt to revisit best practices and increase your knowledge when it comes to unemployment claims.

Keep in mind that since 2011’s Unemployment Insurance (UI) Integrity Act, employers bear more responsibility for replying to state agencies’ UI inquiries – and face greater penalties for late or inadequate responses, especially as states get around to fully implementing the Act’s provisions.

No matter the size of your business, it’s important to be aware that your response to an unemployment claim is discoverable. As I said before, what you do, and what you don’t do, could come back to haunt you, especially if the employee brings some other kind of claim.

As an employer, here are some points you must consider to stay compliant with this area of unemployment law:

  • Make sure your HR managers and/or payroll staff can recognize and know what to do with Unemployment Insurance Claim forms when they arrive by mail.
  • Assign or take responsibility for processing your response to UI claims in a timely fashion – your time window is brief in most states. Remember that your responses are discoverable and must be truthful!
  • Document any information you communicated to the employee, as the UI agency may request this material or your rationale for decisions. This documentation should be crafted with care by HR or the most appropriate manager and needs to meet the standards of good HR practices. For more on documentation, click HERE.
  • Always disclose all the facts, as you understand them. Employers may be penalized by state laws if they are found to be willfully withholding facts surrounding an employee’s separation from employment.

Remember, it is especially important to be truthful and timely with the UI paperwork in cases where there is any possibility of litigation – you may trigger increased regulatory scrutiny if you make agreements not to contest UI claims. You may also want to consult with a qualified HR professional in some cases.

Plus, you can get into further trouble if you have a pattern of failing to reply in a sufficient or timely fashion. This can lead to extra benefit charges up front even if an ex-employee is later disqualified – which can literally cost your medical office money, because it raises the amount of taxes you pay based on your experience rating down the line.

I hope these points will increase your caution level when it comes to UI inquiry or claim responses (remember when you got shot in the leg? It’s just a flesh wound!). And as always when it comes to employment law, bear in mind that many states have more specific legislation with more rigorous requirements.

This is a complicated topic, but it’s also an area where knowledge can save you money in the long run. You may need to consult with an expert to make sure your documentation and termination practices, and the medical office employee handbook that supports them, are in line with all areas of federal and state law. As always, CEDR members can call our Solution Center anytime at 866-414-6056 with questions!

Friendly Disclaimer: This information is general in nature, and is not intended to replace good counsel about a specific issue with either your attorney or your favorite HR expert.

Friendly Disclaimer: This information is general in nature and is not intended to provide legal advice or replace individual guidance about a specific issue with an attorney or HR expert. The information on this page is general human resources guidance that is believed to be current as of the date of publication. Note that CEDR is not a law firm, and as the law is always changing, you should consult with a qualified attorney or HR expert who is familiar with all of the facts of your situation before making a decision about any human resources or employment law matter.

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