By Pinnacle PEO

The unemployment claims process has changed over the past few years due to the introduction of the Unemployment Insurance Integrity Act, which requires employers to bear more responsibility for replying to state agencies’ unemployment inquires, or face penalties for late or inadequate responses.

Over the past several years, the amount of unemployment overpayments made to individuals who would have been ineligible for benefits had the employer properly responded, has been estimated to cost into the billions.  As a result, the burden of responsibility and cost associated with the claims has greatly shifted to the employer.  Ignoring claims is no longer an option.

Not only is responding timely a requirement, responding “adequately” is also imperative. “Adequate” is defined as providing sufficient documentation to support the reason for the separation. Did the employee know his or her job was in jeopardy?  Having conversations with the employees about expectations doesn’t count.  If it isn’t properly documented in writing with the employee, then it didn’t happen!

There are many things employers can do to help their case.  Listed here are some of the most frequent avoidable mistakes, as published by the Texas Workforce Commission, that happen prior to the claim which can have lasting results.

• Failing to discuss the problem with the employee prior to termination
• Terminating an employee without reasonable warning
• Terminating an employee using the “at-will” doctrine
• Taking no action when employees complain

Failing to discuss the problem with the employee prior to termination
In most states, no law requires employers to inform employees as to why they are being terminated; however, it can be a mistake to fire someone without discussing the problem leading to termination and without giving the employee a chance to explain his or her side of the story. Claim examiners and hearing officers generally look with favor upon employers who confront the soon-to-be-former employee with the problem and let the employee try to explain. For one thing, that avoids the related problem of giving a false reason for termination (almost always fatal to a case). For another, there is always the possibility that the employee will point out something that will make the employer realize that discharge might not be appropriate. Finally, it gives the appearance of fairness, which is important from a perception standpoint.

Terminating an employee without reasonable warning
There is no set number of prior warnings that must be given before an employee can be fired; however, the test is whether a “reasonable employee” could have expected to be fired for the reason.  There are important considerations here.  The employer must either show that the employee did something that he knew would have caused him to be fired without prior warning, or the employee had somehow been placed on prior notice that he could lose his job for such a reason. “Prior notice” would come from a policy expressly warning of discharge or from a (preferably written) warning to the effect that a certain action or lack of action would result in dismissal.

Terminating an employee using the “at-will” doctrine
One reason employers should reconsider using the employer “at will” rule is when their company has policies and procedures to address performance issues. Doing so can lead directly to losses in UI claims. Remember, an employer must show that the claimant either knew or should have known that her job was on the line for the reason in question. That will be impossible to show, for example, if the employer fires the employee without giving the employee the benefit of progressing through whatever progressive disciplinary process the company usually follows. The problem also arises if an employee gets a written warning stating that it is the “first written warning,” and the list of further steps on the form shows a “second written warning” or “final warning”, but the employee is fired for a subsequent offense without getting the (apparently promised) intermediate or final warning. The point is that the company should try its best to do what it says it will do. If employees have been led to believe that certain steps will occur prior to termination, follow those steps, or else be prepared to lose the UI claim.

Taking no action when employees complain
Of course, not all complaints are valid, and some employees are chronic complainers. That having been said, nothing stirs the sympathy of claim examiners and hearing officers like the story of a claimant with a halfway legitimate grievance, whose employer either took no effective action to address the grievance or retaliated somehow against the claimant. Complaints usually do not come out of thin air. Listen, investigate, act, and document your actions. Employers that seem responsive to employee concerns not only face UI claims with more confidence, but also generally have fewer worries about employee turnover.

For more resources pertaining to unemployment claims, contact hr@pinnaclepeo.com.  Our team is here to help you navigate through this process.