Save Money by Avoiding the Most Common Unemployment Claims Mistakes
Many businesses view the expense of unemployment claims and unemployment insurance (UI) taxes as uncontrollable costs of doing business. However, if you can avoid the most common unemployment claims mistakes, you’ll likely win more claims, reduce your UI tax rate, and drive significant savings to the bottom line.
In UC Alternative’s experience providing outsourced claims management services to leading organizations, there are five unemployment claims mistakes that routinely cost businesses both time and money.
Mistake #1: Failing to Maintain Sufficient Documentation
If you discharge an employee for misconduct and they file for unemployment, you bear the burden of proof to demonstrate the claimant isn’t eligible. The better your documentation of the actions that led to termination, the better your odds of disputing the claim successfully. However, many companies fail to maintain adequate documentation.
Let’s say your company terminated an employee for poor attendance. Per your policies, the supervisor should have issued a verbal warning after the first offense and a written notice after the next two offenses. But the supervisor only provided verbal warnings and never documented that they occurred. The employee claims they didn’t know their attendance was a problem. When it’s your word against theirs, the claimant usually wins.
Attendance documentation is always vital but especially when you use on-call employees. If you offer work shifts and an on-call employee turns them down, proper records will prevent them from successfully claiming a lack of work.
Solution: Require supervisors to maintain detailed records of employee attendance and performance issues or other actions that could lead to termination, as well as evidence that employees were offered work. If an employee quits, store their letter of resignation as evidence that you didn’t terminate them.
Mistake #2: Not Handling Notices Timely
If you manage unemployment claims internally and your staff is stretched thin, separation notices and claim notices can fall by the wayside.
Some states require you to file a separation notice within a certain timeframe to avoid a penalty. In the event an employee files for unemployment after voluntarily quitting, if you filed the separation notice late (or not at all) you can’t get the claim disqualified and your unemployment account will be charged. What should have been an easy claim win has now turned into an expensive loss. The consequences are equally costly if you don’t respond to a claim notice on time: The claim will be considered nonprotestable, leaving you open to paying a claim that isn’t valid.
Solution: Outsourcing your unemployment claims management to an experienced partner is an effective way to avoid filing or responding to notices late. The provider should take accountability for ensuring all claim responses are complete, accurate, and submitted timely.
Mistake #3: Filing an Incomplete Unemployment Claim Response
Since you bear the burden of proof in an unemployment case, your claim response should be as detailed as possible. If you don’t submit a complete, compelling claim response with all the relevant documentation, you won’t just jeopardize your case; you could run afoul of the Unemployment Insurance Integrity Act. If the state rules in favor of the employee because your response wasn’t complete, even if you appeal successfully and the claim is later disqualified, your account will be charged for the benefits the employee received up to that point. Your experience rating will suffer, your UI tax rate will increase, and you’ll pay more in UI taxes.
Solution: Craft a thorough, compelling unemployment claim response and attach any documentation that strengthens your case. You can ease this administrative burden by choosing an outsourced claims management partner that reviews your response to ensure it is strong and complete.
Mistake #4: Not Preparing Effectively for Hearings
An unemployment appeal hearing is your final opportunity to present a compelling argument that results in a win. But some organizations aren’t familiar with how a hearing works, so they don’t devote the time and effort to prepare properly.
A hearing is a court case in which each side presents its arguments, providing eyewitness testimony and relevant documentation. A hearing officer listens to both sides and allows time for cross-examination before ruling on the case. The better prepared your eyewitnesses are for this process, the better your odds of winning the case.
Solution: Identify all eyewitnesses who can support your case and ensure they know what to expect at the hearing. Start preparing early so they have time to get comfortable with their responsibilities. An outsourced claims management provider can help your witnesses prepare for a hearing by role playing and crafting a convincing closing argument.
Mistake #5: Failing to Provide Proper Training & Communication
Your supervisors are responsible for enforcing many company policies that govern employee conduct. If they don’t follow and apply those policies correctly, an employee who is discharged for misconduct has a much better chance of qualifying for unemployment. But unless they fully understand your employment policies and their related responsibilities, your supervisors could inadvertently jeopardize your unemployment claims cases. For instance, in the case of the attendance problem described earlier, it’s possible the supervisor failed to provide written warnings because she didn’t realize that was the company policy.
Solution: Clearly communicate the details of all company policies to anyone responsible for following, implementing, or enforcing them. Require all supervisors to participate in training to understand their role in implementing or enforcing employment policies and the implications of failing to do so consistently. It’s equally important to document that you’ve communicated all employment policies in writing to every employee.
Performance-Based Pricing Can Prevent Unemployment Mistakes
While any outsourced unemployment claims management provider can handle the mechanics of processing claims, not all vendors can help you avoid common, costly unemployment claims mistakes. That’s because most claims vendors are compensated for volume, not outcomes. This fee structure provides no incentive for the vendor to help you win more claims upfront by filing timely, complete responses or to help you win more claims on appeal by ensuring your witnesses are well prepared for hearings.
UC Alternative’s unique performance-based fee ensures we’re rewarded for helping you achieve the best possible claims outcomes. We have a strong incentive to take ownership of the unemployment claims process, reduce your team’s administrative burden, and help you achieve the lowest possible UI tax rate for your industry and state.
Contact us to learn how we can help you avoid unemployment claims mistakes and reduce your UI taxes. Or get a free unemployment claims savings projection.
