How To Avoid Unemployment Claims and Protect Your Business
Once an employee is no longer working in your company, there is a chance they will file for unemployment benefits. Each state has its own rules and regulations regarding who is entitled to unemployment benefits, and state to state the rules are different. There are various reasons why a former employee could be looking to make unemployment claims.
Former employees file unemployment claims once they have lost their job with your company for any of the following reasons;
- Layoffs or reduced hours
- Wilful misconduct terminations
- Employee resignation
Protecting Your Company Against Unemployment Claims
Unemployment claims are not an out-of-pocket cost you can expect to be hit with after terminating employment. Instead, it is paid from a pool of benefits collected from your company as a small fee by the state. However, if you have an increased number of unemployment claims made, the state can increase this fee against you, meaning you then pay more to this pool of funds.
Reducing the likelihood of people making an unemployment claim against your company can be handled in different ways.
From the outset, you want to make sure you are thoroughly vetting potential employees by hiring smarter and making sure they are a good fit for your company. Check their employment history to get a good idea of how their career pans out to judge if they would be eligible for employee benefits due to the termination.
Set Clear Policies
When you hire new employees, make sure you are clear and consistent regarding your policies from the very beginning. This avoids your employees' failure to adhere to policies and make a successful claim for unemployment if they are subsequently terminated due to misconduct.
Make sure you get each employee to sign a contract acknowledging your policies and their intention to comply.
Avoid Firing Staff
There are cases when a firing is required for cases of gross misconduct. But even in these cases, an unemployment officer may find cause to award unemployment claims made against you. Step back and consider your options when disciplining employees and follow legal routes to engage with formal verbal and written warnings, giving them opportunities to correct their behavior and give yourself evidence to avoid paying unemployment benefits.
Keep well-documented records that will allow you to contest an unemployment claim as the result of contract termination.
Rules and regulations
Just because your company has a specific policy in place, if it isn't in line with your state's current rules and regulations, you may find this won't hold up should an unemployment claim be submitted and a claim hearing is held. Hold regular employees training on new regulations in your state and any industry-specific guidelines too.
Knowing where you stand legally regarding state unemployment, unemployment compensation, and terminating employment will allow you to consider all your options carefully when putting plans in place to protect your business from unemployment claims.
If you're struggling with managing unemployment in your business, there are always options out there to help such as https://unemploymenttracker.com/software/unemployment-cost-control/.