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Questions and Answers
Can an individual who quits receive unemployment benefits?
Answer:
Depending on the circumstances involved in the separation
from employment, an individual who can show "good cause"
for leaving may collect unemployment benefits.
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Answer:
An employer pays state unemployment taxes on each employee's wages
up to a set taxable wage base (The limit up to which an employee's
wages are taxable for unemployment insurance purposes. The IRS sets
the federal limit and each state's limit must be no lower than the
federal; however, most of the states have a wage base higher than
the current $7,000 federal wage base. Each state sets their wage
base annually using different criteria.).
The taxable wage base varies from state to state, and depending
on how it is calculated, can be fairly high. For example, the 2001
taxable wage base in the state of Washington of $28,500* is based
on the
average weekly wage.
Conversely, the taxable wage base in New York is set by law at
$8,500. Employers do not pay unemployment taxes on all of an employee's
earnings, just a portion. That portion constitutes the employee's
taxable wages, and is determined by the state's taxable wage base.
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I have an independent contractors working for me. Must I pay unemployment
taxes on their earnings?
Answer:
If an individual can truly be viewed as an independent contractor,
no unemployment taxes are paid on their earnings by the employer.
However, many employers misclassify employees as independent contractors.
The states normally use a variation of one of two tests to determine
employment status: the" ABC Test" or the "Common
Law Test." In each, the degree of control an employer has over
an individual's performance, whether the individual is engaged in
her own independently-established business, and the manner in which
the individual's hours and pay are set, are factors in determining
employment status, among others.
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What happens in an unemployment hearing?
Answer:
An unemployment hearing is usually the final step for both parties
to give testimony regarding their cases. Unemployment hearings are
informal compared to court of law situations. Each party is placed
under oath by the hearing officer, and the testimony is tape recorded.
All details surrounding the separation issue must be presented by
first-hand witnesses.
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How do my employees find out more about their rights to unemployment
benefits?
Answer:
Most states require that all covered employers display a poster
specifying employee rights to unemployment insurance benefits. Some
states also require employers to supply claimants with separation
notice forms at the time a separation occurs. This correspondence
can be obtained by contacting your local job service office.
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What can I do if I don't agree with a state's decision to allow
a claimant benefits?
Answer:
If you receive an unfavorable determination with which you do not
agree, write an
appeal and send it to the state along with any supporting documentation
so the state can schedule a hearing.
You should first review your case to determine if an appeal is actually
warranted. Consider the strength of the case. Do you have any first
hand witnesses or supporting documentation? If you do not have the
necessary witnesses or documentation, you should consider not pursuing
the case to a hearing. In a few states, a request for reconsideration
may be submitted in lieu of an appeal. If the decision is still
unfavorable you may file an appeal for a hearing.
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Can an employee collect unemployment benefits if they have not contacted
our office for a new work assignment?
Answer:
Many states will disqualify a claimant who does not maintain contact
with former employers who are temporary agencies. Other states will
consider this matter to be an availability issue. A few states will
not consider the issue of maintaining contact to be disqualifying.
Temporary agency employers should provide their employees with their
policies on procedures for maintaining contact.
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Who pays for unemployment benefits?
Answer:
In almost all states, unemployment benefits are funded 100 percent
by employers
through a payroll tax based on their past unemployment experience.
An employer with a high rate of turnover usually will pay higher
unemployment taxes than an employer who consistently retains its
employees.
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How is my unemployment tax rate computed?
Answer:
Each year, the state "looks back" at an employer's previous
experience to determine
the rate the employer must pay in the upcoming tax year. In "reserve
ratio" states, the tax rate is based on an "account balance,"
the difference between the taxes paid by an employer since it became
liable in the state and the benefits charged during the same time
period.
The account balance is divided by a payroll factor (usually an average
of the three most recent years of taxable payroll) to arrive at
a ratio, which is then applied to a table for the tax rate. In "benefit
ratio" states, benefit charges for a specific period of time
are compared to taxable payroll for the same time period to arrive
at the tax rate.
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Can I stop ex-employees from collecting unemployment benefits?
Answer:
It is every individual's right to file for unemployment benefits
and, if eligible, collect. There are ways, however, to make sure
that only those individuals who are truly eligible for benefits
actually collect. By following a progressive disciplinary plan,
documenting situations thoroughly, and responding promptly to notices
from the state, you may be able to convince the state to disqualify
the individual from benefits.
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What should I do if an employee has refused a job offer from me?
Answer:
Individuals who file for unemployment insurance benefits are required
to be able, available and actively seeking work during each week benefits
are claimed. If an individual has refused suitable work without good
cause, they should not be entitled to benefits.
Job refusals should
be reported immediately to your local unemployment office if the individual
has filed a claim. Most states have strict time limits for reporting
the information. If the state finds the work was suitable and the
claimant did not have just cause for refusing the work, a disqualification
from benefits will be imposed. Some states will also relieve the employer's
account of any benefit charges as a result of the refusal.
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Can an individual who is discharged receive unemployment benefits?
Answer:
In order to disqualify a claimant from unemployment benefits on
a discharge issue,
an employer must prove the claimant's actions constituted willful
misconduct. Supplying the state with documented proof that the claimant's
actions were in deliberate disregard of the employer's best interest
will help disqualify the claimant from benefits. Details concerning
the final incident, prior warnings, and a signed company policy
are imperative in proving misconduct
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What happens if I don't respond to a benefit claim notice?
Answer:
Many states have strict time limits concerning claim responses.
If an employer fails
to respond to the claim notice with the separation information,
the employer may lose all appeal rights, and the determination to
award benefits will be based solely on the claimant's statement.
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How long should I keep records on a former employee?
Answer:
Personnel files on former employees should be kept for a minimum
of three years
after the date of separation. After three years a former employer
is usually no longer in danger of falling into a claimant's base
period.
However, some states go back much further for tax-related issues.
Employers should check their state regulations for the requirement
concerning record retention.
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Why would I receive a benefit claim notice on an individual who
left my employ six months ago?
Answer:
In many states, an employer who falls within a claimant's
base period will receive a notice when an individual files a
claim for benefits,
whether or not it was the last separating employer. This can go
back almost two years. By responding to the claim notice, an employer
may receive relief of benefit
charges if the claimant's separation
from its employ was not for good
cause or for reasons constituting misconduct.
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