by Scott Cruz
Clark Hill PLC is an IMA member full service entrepreneurial law firm…
In the current economy, it is more important than ever for employers to understand what unemployment benefits are available to former employees, what actions can disqualify a former employee from receiving these benefits and how to navigate through an unemployment insurance claim once it is filed. Probably the most important reason why employers need to know this is because the premium a company pays for unemployment insurance is based largely in part on how many successful unemployment claims are filed against the company. Once you know how and why a former employee who is otherwise “eligible” for unemployment benefits can subsequently be deemed disqualified from receiving such benefits, you’ll spend less staff time and pay fewer legal fees figuring out your defense to an unemployment claim. Here are ten things you need to know about unemployment insurance claims in Illinois:
- Generally, a person needs to be “unemployed” in order to be eligible for unemployment benefits, but not always. If one of your former employees gets another job after his involuntary separation from your company, and that other job is part-time, he could be classified as “underemployed.” “Underemployed” means that the employee’s part-time wages are less than the weekly unemployment benefits he was receiving after leaving your company. Under those
circumstances, that former employee could continue to collect unemployment benefits at a reduced amount, offset by his part-time wages.
- Once an employee has worked for a company for 30 days, that company is considered the “chargeable employer,” and it will be responsible for paying unemployment benefits should the employee be deemed eligible and there are no disqualifying provisions. The 30 days do not have to be consecutive. So, if you hire a seasonal worker for 15 days only, and then hire him back a few months later for another 15 days, you are the chargeable employer—even if he worked for multiple employers (for less than 30 days) between his stints with you.
- It is not always the case that an employee who voluntarily leaves is ineligible to collect unemployment benefits. If the employee quits because your organization dramatically changed working hours or locations, unemployment insurance officials could characterize the termination to be “employer-caused discharge” and award unemployment benefits.
- An underperformer who gets fired for showing up late or falling short of expectations could successfully argue that he did his best and did not deliberately let the organization down. Unless a supervisor can establish that the employee was intentionally doing a bad job, that worker is likely to be eligible for unemployment benefits. To avoid this problem, you should never characterize conduct that resulted in the termination as just “poor performance.” Be as specific as possible when describing the conduct that ultimately led to the termination and always explain
why you believe the employee intended to engage in the conduct; otherwise, the employee may be awarded with unemployment benefits.
- Likewise, document everything and make sure to issue warnings. This is extremely important because it is much easier to demonstrate that an employee deliberately engaged in misconduct if you can show that the employee ignored repeated warnings.
- The last incident that led to the termination is really the conduct that the unemployment insurance officials care about. In making their assessment, all they want to know is what happened on the day of the termination. So, if you fire someone, do it on the day she deliberately violates a policy or willfully ignores her job duties, not because the employee committed a minor infraction that served as the last straw.
- Putting your company’s policies in writing and distributing them to all employees can help you establish that an employee knew the company’s rules and willfully violated them. If not already included, the employee handbook should list specific breeches of conduct and assign penalties that include possible dismissal—and enforce the policies uniformly. And, make sure all employees sign an acknowledgement that they received and read the handbook, along with
any revisions to specific policies.
- Unemployment officials want to hear from the supervisor who witnessed the former employee’s misbehavior—not from the head of HR, who probably heard about it secondhand.
So send the manager to all hearings—in person and on the phone. If it’s a close call, the officials
are likely to give the employee the benefit of the doubt. Arm your company’s representative
with documentation and specifics.
- Labeling someone who works on site, at hours prescribed by the business and on projects
assigned by a supervisor as an “independent contractor” probably won’t fool an unemployment official who is determining the person’s eligibility for benefits. In fact, mislabeling could trigger an audit and result in a costly determination and assessment. A worker has to be an employee to qualify for unemployment benefits. That’s decided by when, where and how a person works, not what you call them. So, make sure your company properly classifies the people who work for your organization as “employees” or “independent contractors.”
- Unemployment rules and laws can vary from state to state, and they’re full of nuances that don’t become obvious until a former employee files a claim or your organization contests one. So make yourself aware of those nuances. Therefore, if your company operates in multiple states, know the differences in unemployment insurance law from location to location.
This is an original article written for the IMA Human Resource Blog. If you have any questions and/or would like to knw more about the Illinois Unemployment Law, please contact Scott Cruz at (312) 985-5910 | firstname.lastname@example.org.