Employees who walk off the job can apply for unemployment. Whether or not they collect is up to you. In this fourth installment on unemployment insurance, Susan Mravca, CEO and co-founder of JuvodHR, offers tips to protect your company from this potential liability.
If an employee abandons their job, how can they get unemployment?
Anyone has the right to apply for unemployment insurance, however, not everyone is eligible to collect. By providing a prompt response to unemployment claims, along with supporting documentation, companies can ensure that only legitimate claims are accepted.
What’s the harm in letting a former employee collect unemployment?
When a former employee collects unemployment benefits, you could end up paying a higher rate of unemployment insurance taxes, impacting your company for many years.
Why do employers have to document no-call no-shows?
Bottom line – if you don’t document the employee’s departure and he/she applies for unemployment, you’ll lose at the unemployment office. You must be able to demonstrate the employee abandoned their job in order to disqualify them from collecting unemployment benefits. And, you must act quickly.
What should employers do to protect themselves?
As soon as you’ve determined that an employee abandoned their job, there are a number of actions you should take right away.
- Attempt to contact the employee. If you’re successful, ask for a resignation letter. Create a record of all attempts to reach the employee including conversations, messages you left on their voicemail and unanswered calls.
- Update and organize the employee file. Check that all necessary documentation is included, e.g., performance reviews, warnings, corrective notices, hours.
- Tell your accountant that the employee quit and is not eligible for unemployment benefits. Your tax rate should remain unchanged.
- Watch for an unemployment-insurance claim so you can respond quickly.
What’s a common mistake made by employers?
The most ignored rule is failing to contact the employee. If you don’t follow through, the state might assume the employee was laid off instead of walked off. This will entitle them to unemployment benefits.
Do employers have to contact the employee within a certain time period?
Yes, the specific number of days varies by state. Some states have general guidelines – “as soon as possible”, whereas others are quite specific. Illinois, for example, requires that the employee be contacted within eight business days. It’s a good idea to check with your individual state to be sure.
What should employers do when they receive notification of a claim?
If a claim is granted, you have a limited time period in which to contest the claim. The number of days varies by state. For example, Texas grants 14 business days to contest. Again, it’s a good idea to check with your state. Even if a claim is denied, you should respond to confirm the denial.
Is there anyone else who should be notified?
Always talk to your accountant. An increase in the unemployment insurance rate may otherwise be overlooked. Alerting your accountant to the situation will allow him/her to properly monitor your unemployment insurance tax rate to ensure there isn’t any change.
Susan Mravca is an advocate with the Small Business Advocacy Council for unemployment insurance reform. A serial entrepreneur, Susan is CEO and co-founder of JuvodHR, an expert system in Human Resources designed for small businesses yet equal to that of large corporations. Users can search for pre-written job descriptions and immediately edit them to their own business needs. JuvodHR then automatically creates a valid performance review, built 100% on the job description, providing a simple, clean way to rate employees. For more information go to JuvodHR.com.