How to Prevent Former Employees From Collecting Unemployment Benefits

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Reducing the number of unemployment claims and the amount your state pays in unemployment benefits to former employees is essential to lowering your unemployment insurance premium. Unemployment benefits serve as a safety net for workers who lose their job. If a worker is at fault in his unemployment, the state unemployment insurance department will deny his claim. You have the opportunity to contest any claim filed against your company; however, you must have an allowable defense for the unemployment board to rule in your favor.

Respond to the Notice of Unemployment Insurance Claim Filed when you received it from your state unemployment department. The department mails this form to employers after former employees file a claim for benefits. Include employee information such as the hire date, salary, position and last day worked. List the reason for the separation and include details justifying your reasoning in contesting the claim.

Wait for the decision from the state unemployment department. Departments typically respond within one week. If the state denies the claim, the former employee is not eligible for benefits and the employee has the right to appeal. If the state approves the claim, you have a right to appeal the decision.

Mail an appeal within the time frame stated on the decision. Include the name and address of your business, your unemployment account number, the Social Security number for the employee, a copy of the original decision and a reason for the appeal

Attend the hearing set by the state. States typically conduct phone hearings when employers contest an unemployment claim. You will receive notification from the state as to when the hearing will be and if you do not attend, the judge will enter a default judgment for the employee entitling her to her claim. At the appointed time, the judge will call you and your former employee and ask questions regarding the termination. You must answer any questions truthfully or risk charges of perjury.

Wait for the appeal decision. States typically decide appeals within two weeks; however, the claimant may begin to receive benefits before the state decides the appeal. If the appeal decision is in your favor, the former employee may have to return any received benefits.

Tips & Warnings

  • You must have a viable reason for terminating employees for your request of denial to be successful. Allowable reasons include gross misconduct, absenteeism and drug or alcohol use on the job.
  • You have the right to request witnesses for your appeal hearing. Witnesses must have firsthand knowledge of the details of the termination.
  • If you do not have documentation supporting your allowable reason for termination, the state will honor the claim. Use time cards and payroll records to prove tardiness and absenteeism. Documentation from the employee's file of any disciplinary action against the employee is also acceptable to help prove your case.
  • Fighting an unemployment claim can make the former employee an enemy, according to Nolo. This can lead to the employee filing a wrongful termination lawsuit. Fighting a claim could cost your company more than just the increase in your unemployment insurance premium.

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