Employers are constantly trying to determine if they have done everything they can to keep unemployment compensation costs to an absolute minimum.
We all know there are many unemployment claims beyond our control, involving such issues as “lack of work” and “inability to perform the job.” Of course, employers do not want to deny benefits to individuals who become unemployed through no fault of their own. However, let’s take a look at how the handling of protestable claims can affect unemployment costs.
Why is it so important to win protestable claims up front?
If you win at the initial level, the state will not be assessing any charges against you unless your former employee files an appeal and is able to get the decision reversed at a hearing. This has an immediate impact on unemployment costs, resulting in smaller checks being written to reimburse the state for benefits paid on your behalf.
If you lose at the initial level, the former employee will immediately begin receiving benefits and the state will continue to assess charges against your account for each week they remain unemployed. You will continue to be invoiced for these charges until you are able to overturn the unfavorable decision by participating in an unemployment hearing and convincing the state to rule in your favor. Depending on how quickly that hearing can be scheduled, a high percentage of the liability associated with a claim may very well have been paid out and charged to your account before the hearing finally takes place.
Credits for Reimbursing Employers
Should you successfully plead your case and gain a disqualification following a hearing, the state will discontinue payments to the former employee and charges to your account will cease.
Important Considerations about Credits:
- Credits are not issued until an overpayment is established with your former employee and restitution is made to the state
- Can be a lengthy process that results in the receipt of credits in very small amounts paid out over several years
Pursuing and winning as many protestable issues as possible are key ingredients for keeping your unemployment costs to a minimum. Providing specific details regarding the reason for separation, providing documentation to back up your statements, and establishing consistency in procedures and processes are all steps that can be taken to help achieve that goal.
Re-posted with the permission of our friends at Equifax. Equifax is a leader in Unemployment Case Management (UCM).
