As job growth continues to stall, former employees occasionally seek unemployment benefits they don’t deserve, either because they are desperate, confused or trying to cheat the system. Employers, ultimately bearing the cost of unemployment payments, must evaluate whether to challenge those unemployment claims.
Appealing unemployment benefits is expensive and time consuming and success is not guaranteed. Employers should understand what is involved in the appeals process, recognize the long-term implications, involve the right people in the process and carefully consider how to proceed when former employees claim benefits they have not earned.
In weighing the decision, there are several factors to consider. If employees are denied jobless benefits, in part because of employer resistance, an employee is more likely to consider a claim of discrimination, particularly retaliation. Determining unemployment eligibility also takes time, since someone must collect documentation and attend a hearing to testify on the company’s behalf. There are other PR issues to consider as well. While jobless claims are not usually front page news, companies may appear greedy or unsympathetic to current employees or the public if they actively work to deny workers jobless benefits, even when the company is in the right.
Finally, in addition to the time, cost and damage to the company’s public perception, employers also tend to lose most of their appeals. According to the Wall Street Journal, employers won only 36 percent of the 405,153 unemployment claims they appealed in 2009.
If you do decide to appeal an unemployment claim, there are several things to keep in mind:
• Don’t wait until a claim is filed to think about appeals – For smaller companies with low turnover, an unemployment claim may be an unusual undertaking. Before a claim is ever filed, the company should have a system in place to quickly gather relevant information. If you have not considered the issue recently, now is a good time to do so. A team of in-house attorneys, outside counsel and human resources professionals should review current policies to ensure accuracy and compliance with current laws and regulations, including those governing unemployment insurance.
• Document everything – Every company should have policies about the appropriate way to handle and document employment evaluations, firings and layoffs. If an employee has been fired for cause, the employer must create a paper trail outlining exactly what the employee did wrong, how it violated company policy and why the company chose to terminate. Hours and work history should also be documented and easily accessible — employees may not be eligible for unemployment benefits because they worked too few hours or were not employed for sufficient duration.
• Consider the specifics of each situation – Before appealing a claim, be sure that managers or supervisors handled a job dismissal appropriately and were clear that the employee was not entitled to unemployment benefits.
• Find a point person – Depending on the company’s size, it should designate one person or a certain group of people to review all unemployment claims. Those people should be educated about the claims process and be able to quickly access pertinent information and documentation.
• Don’t take any claim for granted – It is important to take each claim seriously. Unprepared company representatives may misspeak during a hearing and damage the appeal or expose the company to future, unrelated claims.
An unemployment claim hearing can quickly turn into a case of “he said-she said.” However, with the right strategies, processes, documents and knowledgeable professionals, employers can develop a good sense of which cases to appeal and ultimately boost their success ratio in those select appeals.
Richard D. Alaniz is senior partner at Alaniz and Schraeder, a national labor and employment firm based in Houston.