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You Can’t Quit, You’re Fired!

 

Winning Unemployment Quit or Discharge Claims

Every state unemployment agency has the enviable job of determining which separation standard applies when an unemployment claim is filed. Seems like a layup (a little March Madness nod), but often it isn’t so clear.

Adjudicators must determine whether a claimant was:

1.) Discharged from their employment

2.) Quit their job

3.) Are still employed

They must decide who initiated the separation of employment to apply the proper section of law. If the separation appears to have been initiated by the employer, the discharge statute then controls whether that individual is eligible for UI benefits and the legal burden of proof is on the employing unit. If it appears the employee initiated the separation, the voluntary quit statute is applied. This burden of proof falls on the claimant.

Straightforward right? Not so much.

Some separations can be confusing to employer and claimant alike, particularly where there was little or no proper communication.  Here’s a couple head scratching (but not uncommon) scenarios you seasoned HR professionals or management leaders may have experienced:

The “act like nothing ever happened” employee

If an employee is a “3-day no call no show” and the employer’s policy states that is considered a “job abandonment or voluntary quit”, what happens if the employee shows up to work on day four?

Do you fire that person?

Are they still considered a quit?

What if the employee says they don’t want to quit and never intended to do so?

A few things to consider are the claimant’s “state of mind”, during the period of absence. As all state adjudication make exception for this (more on that later). Other considerations like whether they were able to notify their supervisor can also blur the lines. Throwing another curveball, the employer may fire the employee for violating a no-call, no-show policy, only to have the claimant tell the unemployment office they quit.

Ultimately, the unemployment adjudicator must make that determination. However, an employer’s best line of defense is ensuring clear, well-written policies are provided plainly outlining an obligation to communicate with them in the event of an absence.  This safeguard employers as much as possible should the burden of proof shift from the claimant (a resignation) to the employer (discharge for policy violation).

The “heat of the moment” employee

“That’s it, I’m leaving, I can’t take it anymore, I quit!”. The employee storms out of the workplace. As their blood goes from boil to simmer, in hindsight, the employee reflects on their actions and can’t believe they quit. Their job is necessary to support their family. They realize daytime TV is awful, and their significant others have found a whole host of projects for them to take on.

Oops.

Returning to work the following day, they apologize for their outburst and tell their manager they didn’t mean to quit, acted rashly and want to get back to work. They state they were frustrated due to personal issues, which left them short-tempered and thus thinking unclearly. The manager at this point is confused as to what to do, and actually relieved to see this employee exit on their own terms.

 What happens now?

 Is it still a quit? Is it a discharge?

How will it impact unemployment?

Can the company say, “We already accepted your resignation”?

For unemployment purposes, most states recognize a “cooling-off” period and focus on the individual’s state of mind at the time. If in the heat of an exchange, as a reaction to something in the workplace (or outside) an employee quits and subsequently “cools off”, indicating they didn’t mean to quit, most states expect employers to rescind the hasty resignation. Particularly, where the employee attempts to rescind in short order. If an employer decides not to do so, it will be considered a discharge. The question then becomes why would you not allow the employee to return to work, if you had no plans to separate them? There is no specific length of time limiting the cool down period, but usually the more time that goes by the less likely an employer will be required to accept the claimant’s request.

Obtaining detailed written documentation of the event, like witness statements, will help tremendously. Even though the employer may be required to recognize an employee’s request to preserve their job, employers may still decide to discharge the employee for their actions (i.e. abandoning the shift, using profanity, insubordination, etc.).  Once again, that old “state of mind” will still factor into the state’s decision, as they determine if those actions are deliberate, willful or intentional.

Safe bets

We are continually amazed by all the twists, turns and monkey wrenches thrown into what look like clear separations. As always, your best practices will strengthen any separation particularly when you strive to apply them uniformly. Where “good cause” reasons exist to rescind a hasty resignation, with an otherwise quality employee, doing so can be prudent.  After all, the best way to avoid a risky unemployment claim is doing everything you can to make sure it’s never filed.

Looking to share a war story, get a bit of insight or learn a bit more about managing unemployment? Drop us a line here. We don’t bite.
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Formal warnings result in huge overpayments

The U.S. Government Accountability Office (GAO) recently released their study examining unemployment overpayments on a national level. The study took a very targeted view of states in which claimants are issued formal “warnings” for not meeting their work search requirements. The results were staggering, as it was found that $1.6 billion (of $3.9B total)  in over overpaid unemployment benefits in 2016 were made to claimants that were in violation of their requirement to actively search for work.

READ THE FULL STUDY HERE

The Department of Labor clearly affirms and acknowledged these findings, and is working to draft guidance for state agencies. However, they cite the challenges they have in efficiently implementing a timely system to identify and allow claimant recourse before suspending payments.

As UTCA has always endeavored to protect employers from unwarranted UI costs at all levels, this study is troubling. Any overpayment  an employer incurs can impact an experience rating or direct payments made to a state UI agency. Although UTCA actively tracks any and all charges to our employers, and diligently protests erroneous charges, there is no direct insight into the agencies tracking of a claimant’s requirement to search for work. The costly inefficiencies identified in the study lie within the state agencies. We will continue to track the developments as the Department of Labor looks to find a unified solution to this daunting overpayment issue.

What does this newly-quantified study mean to employers? The GAO’s study tells us it is  more crucial than ever before for employers to be aware and pro-active in their approach to managing the unemployment. Creating a system to ensure you are minimizing your UI cost factors within every means you can control is the key.

If you are an employer unsure of the efficiency of your current UI program, or want the peace of mind to know they are taking advantage of all their opportunities to control cost, contact us today. There is never a fee for your initial assessment.

 

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Major system reform looming for PA unemployment

 

 

 

Pennsylvania’s unemployment has been a hot topic of discussion in recent weeks. Not in the broad, glowing sense that we are seeing cheery unemployment news covered nationally. While PA is enjoying a decline in their rates of unemployment (4.7 percent as of October) , they are still a tick higher than the current U.S. average (4.1 percent). The real news is coming from Harrisburg, as recently passed legislation will fuel major changes in the state’s administration of unemployment services.

After effective legislation in 2016, several state UC service centers  were closed and the PA Dept. of Labor staff was depleted by 500 workers. In tandem with reliance on antiquated technology, the productivity and responses within the unemployment compensation program have suffered. The performance issues are well documented here. Fast forward to this past week, the PA House has officially passed resultant legislation to not only return employees to the ranks, but finally push through the online system conversions that have been in play for years. Rejoice!

With most UI news being centralized around claimants and the relation to state and federal economy, the employer’s experience is often lost. Shocker.  Fortunately, even amidst service strain at the PA Department of Labor, UTCA experienced little disruption to the employer-based response and adjudication process. Our established agent presence, reputation and relationships at the state allowed us to continue working efficiently to advocate for our employers.

So what does the change legislation change mean for employers?

The increased workforce at the Pennsylvania  unemployment compensation service centers can only mean good things for employers and claimants alike.

Likewise, in our experience, the conversion to online-based claims systems ultimately benefit everyone.

But pump the breaks.

The transition process can be a bit challenging as states and their employees roll out the platform. Employers managing their UI programs should remain hyper vigilant of any communication from the state when the system gets closer to implementation. Many system launches have left employers ill-informed while eliminating paper claims, without knowing they are responsible for registering and regularly monitoring the new web-based platforms. This lack of awareness can lead to a serious risk in increased charge activity for missed claims, and benefit integrity compliance penalties. We have engaged several prospective employers over the last five years that thought their claim activity had pleasantly (and magically) disappeared. When in reality, they were never made aware of the “switch” and had been incurring copious claims and charges. For Pennsylvania employers already struggling to manage unemployment, be “on-guard” as the online system develops further. UTCA will continue to actively engage the PA Dept. of Labor to stay abreast of new developments, while continuing to champion our employers through whatever hiccups new technology may pose!

As always, if you are an employer challenged by managing unemployment (or an inefficient UI vendor), don’t hesitate to contact us. We’re here to listen, not push.

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UTCA Gives Thanks to 20th Annual Client Update Sponsors!

UTCA would like to pass along our sincere gratitude to all sponsors of the 20th Annual Client Update!

In preparation for the October 5th event, UTCA would like to give special thanks to Paragus Strategic ITCheckWriters Payroll, Johnson & Hill Staffing Services, and Employers Association of the NorthEast (EANE). These key partners, who provide widely-respected services or support to the employer community will have exhibitor tables set up at our update. Our exhibitors will be on hand to say “Hello” to many of our mutual clients and will be available to provide information to those interested in learning more about their organizations. Please take a few minutes to stop by their tables and chat!

If you have not already, please make sure to RSVP “Yes” to this years’ update! Please join us for our traditional program with a hot breakfast, networking with your peers, and in honor of our 20th Annual Conference new and updated prizes! Participants will have a chance to win Springfield Thunderbirds tickets, restaurant gift cards, and much more.

The event will be held at the Sheraton Springfield, Mahogany Room, 1 Monarch Place. Registration begins at 8:00am. The program begins at 9:00am and concludes at 12:30pm. As always, this is a free conference for UTCA clients. We hope to see you there!
         

 

 

 

 

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Arkansas’ Employers Could See Significant Reductions in Their Unemployment Taxes

Effective January 2018, most of the provisions in House Bill 1405 will take effect – one of those being the reduction of the unemployment insurance benefits claim period from five months to four months. The combined efforts of this provision and others noted in this bill plan to reduce Arkansas’ Employers’ insurance taxes by $50 million annually. The local Fort Smith Regional Chamber of Commerce hopes that it will also encourage those drawing unemployment benefits to look for work faster.

Click here for a summary of HB 1405: https://openstates.org/ar/bills/2017/HB1405/ 

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Georgia’s Jobless Rate Decreases as Job Creation Rate Rises

The jobless rate in Georgia has fallen to its lowest levels in almost 10 years as the State’s Labor Industry is creating jobs and putting a record number of people back to work. In the month of June alone, over 27,000 jobs were created which is almost double the state’s normal job creation rate.

Read the full story here:  http://www.ledger-enquirer.com/opinion/article163369158.html

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Tennessee Sets Internal Unemployment Rate Record

The state of Tennessee’s Department of Labor is setting records within their unemployment compensation program. Not only did they announce an historically low unemployment rate of 3.6%, but they are also paying out approved unemployment claims at a record rate due to recent system upgrades. According to the Department of Labor, the majority of people waiting for benefits are receiving their first payment within 10 days.

Read more about this story here: http://www.wsmv.com/story/35935559/tn-unemployment-rate-lowest-in-history-system-paying-people-faster

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Vermont Ruling Expands Employment Classification of Independent Contractors

In a recent ruling issued by the Vermont Supreme Court, owners of a limited liability company (LLC), can be considered an independent contractor even when they do not have any employees.

In a statement issued by the Commissioner of the Department of Labor, Lindsay Kurrle noted this ruling “provides a level of clarity that we have not had previously.” She went on to state, “The classification of independent contractors is an issue that the department is committed to — both ensuring that workers are properly protected, and that businesses who want to utilize independent contractors are doing so with confidence and predictability of how the law is applied.”

Read more about this ruling here: http://www.benningtonbanner.com/stories/high-court-widens-pool-of-independent-contractors,511798

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Pennsylvania DOL Announces Amnesty Program

The Pennsylvania Department of Labor & Industry announced an unemployment compensation amnesty program entitled “Make it Right” on July 1, 2017. The program runs through September 30, 2017 and will not be an annual occurrence.

Parties eligible to participate in the program are claimants with overpayments established on or before Dec. 31, 2016; employers with unpaid contributions through the third quarter of 2016; and employers with unpaid reimbursements due on or before Oct. 31, 2016.

During the three-month amnesty, at fault claimants (who knowingly gave false information that allowed them to receive more benefits than they were entitled to) will receive a discount of half off interest accrued on their balances. They will be required to pay the full overpayment balance, lien costs, a 15 percent penalty and the remaining 50 percent interest. Non-fault claimants (who unknowingly accepted more compensation than they were entitled to) will receive a half-off discount on their entire overpayment balance. Employers will owe all contribution or reimbursement balances, lien costs and half of the interest accrued.

According to Pennsylvania DOL Secretary Kathy Manderino, “It’s an opportunity for claimants and for employers to do the right thing, to pay what they owe, and to end up with a clean slate.”

Visit the program’s website for more details: http://www.uc.pa.gov/Pages/UC-Amnesty.aspx

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Unemployment Compensation for Military Mates Who Quit to Relocate

Ohio is currently one of just four states (including Idaho, North Dakota and Pennsylvania) that does not grant unemployment compensation to military spouses who quit their jobs to relocate with their spouse, but a recent bill that has just passed the Ohio House of Representatives could change that.

The bill (House Bill 158), sponsored by Representative Rick Perales, would bring unemployment compensation to these spouses who must leave their civilian jobs to relocate for an active duty transfer with their military mates and according to Representative Perales, it will not be a cost to the state.

The bill is now making its way to the Senate.

View a Summary of the House Bill Here: https://www.legislature.ohio.gov/legislation/legislation-summary?id=GA132-HB-158

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