How a Pre-Termination Consultation Can Reduce Your Unemployment Costs
One of the most important determinants in winning or losing an unemployment claim is the actions you take leading up to discharging an employee. Many companies lose claims because they inadvertently make mistakes that jeopardize the case. A pre-termination consultation can help you avoid common missteps, win more claims upfront and on appeal, and reduce your unemployment claims costs.
Why Pre-Termination Actions Matter
Once a former employee files for unemployment, all the facts you need to support your case are set in stone. Everything that led to the discharge has occurred, and of course you can’t turn back time. Now, the burden is on you to prove misconduct to get the case disqualified and avoid paying an unnecessary claim.
While some organizations assume they can correct course by appealing the claim and stating their case at a hearing, that’s a much less effective way to avoid unnecessary claims than handling the termination properly at the outset. And in many instances, introducing new evidence at the hearing will expose you to costly penalties under the Unemployment Insurance Integrity Act. If the state deems your claim response incomplete, even if you appeal successfully your account will be charged for the benefits the employee received to that point. You’ll end up paying a higher unemployment insurance (UI) tax rate and more total UI taxes.
Five Termination Scenarios that Can Lead to Costly Unemployment Claims
The following examples illustrate what happens when you don’t follow proper procedures throughout the discharge process and why a pre-termination consultation is crucial.
1. Quit in Lieu of Termination
Sometimes an HR manager offers to write up an employee termination as a voluntary quit in lieu of a discharge to protect the employee’s personnel record. But if the employee later files for unemployment, the state will treat it as a discharge and the burden of proof is still on the employer to prove misconduct in order to get a disqualification.
If you don’t have sufficient evidence to support the termination, you will lose the claim and your UI account will be charged, increasing your experience rating and your tax burden.
2. Voluntary Quit, But Released Sooner
Let’s say an employee quits and provides the standard two weeks’ notice of separation. Soon after, the employee has a confrontation with their manager that is considered unacceptable conduct for the workplace. To avoid further confrontation, the manager or HR representative tells the employee they are accepting the resignation effective immediately.
In some states, the employee can collect unemployment benefits on the grounds that the employer changed the characteristics of the case from a voluntary quit to a discharge. In the state’s eyes, you’ve terminated the employee without misconduct. What should have been an easy unemployment win turns into a costly loss. In such an instance, the employer should continue paying the employee for the duration of notice period. This will retain the characteristic of the separation as a voluntary quit.
Even if you operate in a state that doesn’t treat the claim in this manner, at a minimum the discharged employee can collect unemployment for the two weeks’ notice period and your UI account will be charged. In essence, the state penalizes you for failing to let the individual work through the notice period.
3. Discharge for the Wrong Incident
Even if an employee has a history of misconduct, you could jeopardize the case by failing to discharge them for the right reason and instead terminating them for the wrong reason.
Consider this scenario: An employee was verbally abusive to a co-worker (a dischargeable incident per company policy), but the company chose not to terminate the employee at this point. Two weeks later, the employee didn’t show up for work and didn’t call out. This individual had a poor attendance record but had only received one verbal warning. The policy requires three warnings (including one in writing) before discharge, but the manager was fed up and discharged the employee for the no-show.
If the termination had occurred after the verbal abuse incident, the company likely would have won the case. Instead, they will almost certainly lose.
4. Unclear Language in Your Documentation
An incident report filled with industry jargon, abbreviations, or vague language weakens your case because it leaves plenty of room for the claims officer to rule against you.
For example, a report which states “the employee didn’t perform their job” is open to interpretation. Was it negligence, or inability? The former is an allowable termination cause, while the latter is not. If you don’t specify the cause in clear, specific terms, you increase the odds that the claims officer will rule in favor of the claimant. This is not always easy to implement across a large organization or company. Working with a partner that understands your industry terminology and decodes your company’s shorthand to ensure that the correct reason is clear in the response to the state can make a difference in the outcome of the claim.
5. Waiting too long to discharge an employee
In some instances, an employer may wait too long (a month or 2 months passed) to discharge an employee. States allow a ‘reasonable’ amount of time for an employer to perform proper investigation before discharging an employee. However, you could lose a case if too much time has passed, and you don’t have good reason for it. In such case, states may rule that the discharge was done at the convenience of the employer.
The Value of a Pre-Termination Consultation
By making informed, intentional decisions leading up to a discharge, you can avoid pitfalls like these (and many more) and avoid unnecessary unemployment claims costs. That’s the goal of a pre-termination consultation.
UC Alternative applies decades of unemployment claims experience to consult with our clients prior to discharge to head-off problems that weaken a valid case. Our strategic consultation helps your organization follow processes and make decisions that increase the odds of winning the claim upfront, avoiding the time and expense of a hearing. The goal is to avoid unnecessary claims and reduce the UI tax rate, ideally to the lowest possible rate for your industry and state.
Our pre-termination consultation services can include:
- Advising you on whether the incident you intend to discharge the employee for will be considered valid based on unemployment laws and your policies
- Reviewing your incident documentation to determine if it’s clear, specific, and sufficient to support a winnable case
- Recommending steps to follow in the termination process to maximize the odds of winning the case
UC Alternative also provides invaluable consultation post-termination. We help your team develop a complete, detailed unemployment claim response to support a winnable case. And in the event you need to appeal the decision, our experienced team helps your eyewitnesses and other parties prepare for the hearing effectively.
Our pre-termination consultation is just one reason long-term nursing facilities, staffing agencies, and many other organizations partner with UC Alternative for unemployment claims management. We mitigate your risks, ensure you comply with applicable regulations, and protect you from costly, unnecessary unemployment claims.
Contact UC Alternative to learn how our unemployment claims management and pre-termination consultations can drive down your claims costs and UI tax rate.
