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4 FAQs Regarding Employer Responsibility For Unemployment Benefits

June 18, 2024

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Unemployment benefits are an essential resource for working people who find themselves out of a job, but it is important to understand the responsibilities that employers have when it comes to these benefits. Take a look at some of the most frequently asked questions regarding employer responsibility for unemployment benefits and discover best practices you can follow when faced with unemployment claims.

What Responsibilities Do Employers Commonly Overlook?

Employers have a responsibility to pay into unemployment as a percentage of their labor costs, though the exact amount can vary based on the state and how many unemployment claims have been levied against you in the past. Additionally, employers must respond to any unemployment claims in a timely fashion. Note that this is a federal law as stated in the Unemployment Insurance Integrity Act rather than a practice guideline.

Who is Eligible for Unemployment and Who is Not?

It is important to know who exactly is eligible for unemployment benefits and who is not. While the specific details can vary based on the state, there are general guidelines that apply in many circumstances. For example, individuals who qualify for unemployment must have worked for the same employer for a certain period of time to even qualify for benefits. Additionally, they must be actively looking for work and willing to accept new work. Among the most important factors is that the employee must have lost their job through no fault of their own.

How Do Employers Know When a Former Employee Has Filed For Unemployment?

Employers receive a notice from state or federal unemployment agencies when a former employee files for unemployment in the proper window of time after leaving their position. This notice will generally ask you to validate (or fix, if they are incorrect) the details of the former employee’s claim. According to the U.S. Chamber of Commerce, these details include:

  • Whether the employee is working full-time, part-time, or not at all.
  • Why the worker left, including whether they were laid off (lack of work), voluntarily quit, were fired, or left because of a trade or strike dispute.
  • Whether they refused employment.
  • If the employee is legally able to work in the United States.
  • If the employee is receiving any form of compensation, such as a pension or severance pay.

Why or When Would Employers Contest Unemployment Claims?

Employers would contest unemployment claims every time they believe that the employee should be ineligible for benefits. In fact, many states outright require this since failing to contest a fraudulent claim can be considered conspiring with an employee to obtain benefits. That would come with serious consequences for the business since it is explicitly illegal.

How Does an Employer Protect Themselves From Unemployment Claims?

Employers can implement a few strategies to protect themselves from unemployment claims. One of the most popular strategies is to try and prevent the need for former employees to file unemployment claims in the first place. Thoroughly reviewing candidates for all open positions can help to ensure that hires are optimally productive and a good fit for their roles, reducing the likelihood that the employer needs to engage in layoffs to improve efficiency.

Additionally, employers should take the time to train and retrain employees, so they know exactly what they are getting into and how to find success in the position. Of course, one of the most effective solutions is to hire a PEO service that can offer valuable payroll reports and support to defend the claim, freeing up hours for your team to focus on growth and attracting talent.

SPLI Offers PEO Services to Businesses

At SPLI, we act as a partner to businesses looking to stay covered and compliant. Our team is ready to help with workers' compensation, payroll administration, benefits management, and general risk management. We have over 35 years of experience serving business leaders just like you, and we can put that to work for your company. Get in touch with our team at 866-720-6281 or request a quote online to get started.

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