FAQs

What if an employee quit but receives unemployment benefits?

  • Bob returns from leave but only part-time work is available so he quit and filed for unemployment.
  • On two occasions the supervisor counseled Susan about her work performance and offered to help her. After declining the offers of help, Susan quit and filed for unemployment benefits.
  • After six months on medical leave Betty’s doctor released her to work. She did not notify the employer of the release. Then the employer went through a layoff, so Betty filed for unemployment claiming lack of work.
  • While on vacation Marla’s husband had a heart attack. She notified her supervisor she would not return, and did not contact the employer after that. The employer assumed she quit, sent her a letter confirming her resignation. Marla said she never got a letter.
  • Frank applied for a job that required heavy lifting. The employer’s pre-employment medical exam indicated that he had a back condition. Frank wanted to work so he asked for a second opinion; the second doctor recommended exercises and said to try the job, but if the pain did not subside he should find another job. The pain increased so Frank quit.

NSN helps clients prepare for these and other separations.

What happens when you discharge an employee?
Discharges can be challenging and stressful. Our clients often consult with NSN’s staff before discharging an employee to avoid paying unwarranted claims.

What is the difference between poor job performance and misconduct?
Good question!

Many supervisors do not know the difference; and the difference can be very costly for an employer. In one case the claimant will be eligible for unemployment benefits, and the employer will be charged. In the other case the claimant is disqualified, and the employer is not charged.

Do any of these cases seem familiar?

  • A laundry worker became angry and kicked over a laundry cart.
  • A medi-car driver with four accidents that involved backing up.
  • A maintenance worker with seven years on the job; the last year or so his job performance deteriorated.
  • A production worker left work early having arranged for another person to cover her shift.
  • Supervisor warns employee about excessive tardiness; employee becomes rude and hostile.
  • Employee asked permission to take a day off for a job interview. Supervisor said no because the employee was on a project deadline. He took the day off anyway.

NSN’s staff is knowledgeable and helpful in preparing for discharge situations. Our goal is to help employers avoid paying unwarranted claims.

Who pays for an unemployment claim? In other words which employer is charged for a particular claim?
States differ in how they determine who is chargeable for an unemployment claim. Some states charge the most recent employer for all benefits, while other states charge employers in proportion to the wages they paid during a base period. States may also charge the most recent employer first, and then any prior employers pay a share of the claim in inverse order. In some states employers can offset unemployment benefit charges through voluntary contributions to the unemployment fund. When voluntary contributions are available, NSN helps to determine whether these voluntary contributions are a cost-effective way to minimize unemployment liability.

How does the state determine the benefit amount to be paid? Does it depend on how much we paid the employee?
The weekly benefit amount is based on past earnings. The benefit amount is based on the claimant’s usual wage and is generally about 50 percent of wages. Every state has a maximum weekly benefit amount. A claimant who earned higher wages will usually receive benefits that are less than 50 percent wage replacement.

Can someone be working and collecting wages at the same time they are collecting unemployment?
It is possible to collect unemployment benefits while working and earning at a certain level. Most states pay unemployment benefits when a claimant is partially unemployed.

If someone quits can they collect unemployment?
When an employee quits and then files a claim for unemployment, then the former employee has the burden of proof to demonstrate that they quit for a valid reason, with good cause attributable to the employer.

Are part-time or on-call employees eligible for unemployment? Are they potentially eligible for unemployment?
An employee may be eligible to collect benefits for any week they did not work and did not receive wages.

Are temporary employees eligible for unemployment?
A temporary employee can be eligible to collect unemployment when an assignment ends. This can happen even when it is understood at the time of hire that the position is temporary.

How are unemployment tax rates determined?
Unemployment tax rates are generally based on payroll and experience. States vary on how long an employer’s experience will affect unemployment tax rates.

Is my unemployment rate high or low?
The rate often depends on the industry, economy, location and a number of other factors. The important thing is to work to bring the rate down. When an employer’s rate is reduced from 9 to 7 percent, or from 3 to 1 percent, the employer saves the same amount of money. NSN’s strategy is to find practical ways to improve the process and to maximize the saving opportunities.

As an employer we appeal unemployment claims we consider questionable. But many times the judge will decide in favor of the claimant after a hearing, even when the claim is unwarranted. What can we do?
The most important thing an employer can do is to send the right person to the hearing.

Most unemployment cases are based on a triggering incident—the event which led to the separation. Who was there? Who actually saw what happened? Who heard what was said? That person should be your witness. The right person to represent the employer at a hearing is the person who can say ‘I heard what she said’ or ‘I saw what he did.’ Simply providing a first-hand witness will improve the outcomes of your hearings and appeals.

To further strengthen the employer’s case, NSN representatives prepare witnesses before each hearing to help them effectively present their testimony in support of the employer’s case.

What is SUTA dumping? And why should employers care about it?
SUTA Dumping is commonly practiced by some employers to circumvent paying unemployment insurance. To avoid higher tax rates, some companies get multiple account numbers with the state, and shuffle employees around to the account number with the lowest unemployment insurance rate. Another common practice is to buy a business with a lower unemployment insurance rate and shuffle employees to that other business as a way to lower the tax rate.

President Bush signed the SUTA Dumping Prevention Act on August 9, 2004, to curb this practice.

From U.S. DEPARTMENT OF LABOR
EMPLOYMENT AND TRAINING ADMINISTRATION ADVISORY SYSTEM
Washington, D. C. 20210

Dec 2002

“SUTA Dumping” is a new term for an old activity that some employers have used to avoid high UI tax rates. Two types of SUTA Dumping transactions are discussed below:

  • Purchased Shell Transactions. Company A, which is just starting in business, purchases an existing business that has a low/minimum tax rate. The low/minimum tax rate is transferred to Company A under state laws dealing with employer succession and transfer of experience. Once the experience is transferred and a low/minimum rate established, Company A begins operations.
  • Affiliated Shell Transactions. An already established and operating company forms a number of additional corporations, obtains a UI account number for each, reports wages for a small number of individuals and pays state UI taxes on those wages until each additional corporation earns a minimum tax rate. Then the major portion of the original company’s employees is moved to a corporation with a minimum tax rate allowing it to effectively “dump” the higher tax rate earned by the original company and maintain a low UI tax rate.