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Should Employers Fight Unemployment Claims

StarrGazerr 2009/02/12 13:46:52
Yes they should - businesses need to save every penny no matter what happens to their employees.
No they shouldn't - things are tough enough already.
It's a complicated issue because ....
None of the above
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Out of Work and Challenged on Benefits, Too
In Record Numbers, Employers Move to Block Unemployment Payouts

By Peter Whoriskey
Washington Post Staff Writer
Thursday, February 12, 2009; A01

It's hard enough to lose a job. But for a growing proportion of U.S. workers, the troubles really set in when they apply for unemployment benefits. More than a quarter of people applying for such claims have their rights to the benefit challenged as employers increasingly act to block payouts to former workers. The proportion of claims disputed by former employers and state agencies has reached record levels in recent years, according to the Labor Department numbers tallied by the Urban Institute.

Under state and federal laws, employees who are fired for misbehavior or quit voluntarily are ineligible for unemployment compensation. When jobless claims are blocked, employers save money because their unemployment insurance rates are based on the amount of the benefits their workers collect. As unemployment rolls swell in the recession, many workers seem surprised to find their benefits challenged, their former bosses providing testimony against them. On one recent morning in what amounts to one of Maryland's unemployment courts, employees and employers squared off at conference tables to rehash reports of bad customer service, anger management and absenteeism.

"I couldn't believe it," said Kenneth M. Brown, who lost his job as a hotel electrician in October. He began collecting benefits of $380 a week but then discovered that his former employer, the owners of the Gaylord National Resort and Convention Center, were appealing to block his unemployment benefits. The hotel alleged that he had been fired for being deceptive with a supervisor. "A big corporation like that. . . . It was hard enough to be terminated," he said. "But for them to try to take away the unemployment benefits -- I just thought that was heartless." After a Post reporter turned up at the hearing, the hotel's representative withdrew the appeal and declined to comment. A hotel spokesperson later said the company does not comment on legal matters. Brown will continue to collect benefits, which he, his wife and three young children rely on to make monthly mortgage payments on their Upper Marlboro home.

Unemployment compensation programs are administered by the states and funded by payroll taxes that employers pay. In 2007, employers put up about $31.5 billion in such taxes, and those taxes typically rise during and after recessions, as states seek to replenish the funds. With each successful claim raising a company's costs, many firms resist letting employees collect the benefit if they consider it undeserved. "In some of these cases, employers feel like there's some matter of principle involved," said Coleman Walsh, chief administrative law judge in Virginia, who has handled many such disputes. But, he said, "nowadays it appears their motivation has more to do with the impact on their unemployment insurance tax rate. Employers by and large are more aware of unemployment as a cost of business."

The cost of unemployment insurance has created an industry of "third-party agents" -- companies that specialize in helping employers deal with the unemployment insurance administration. These firms represent employers in disputes with former employees over jobless benefits. One of the largest is TALX, a St. Louis company active in the Washington area, which claims more than 8,000 clients. The company's Web site says that it removes "over $6 billion in unemployment claims liability annually." Joyce Dear, chief operations officer for tax management services at TALX, said firms such as hers help bring to light the issues surrounding an employee's departure.

"You are limited to what is permissible," she said. "What an employer can do is provide the facts around a separation. The awarding of the benefits is in the hands of the state." Wayne Vroman, a researcher at the Urban Institute, has documented the rise of challenges to unemployment claims using the Labor Department data. He found that the proportion of claims challenged on the basis of misconduct has more than doubled, to 16 percent, since the late 1980s. Claims disputed on the grounds that the worker simply quit represent about 10 percent of the otherwise eligible applications. Even as more employers have alleged employee misconduct, their success rate has stayed relatively stable -- they lose on such issues about two-thirds of the time.

"What is clear is that employers have become more willing to contest claims from claimants," Vroman said of the data. Hearing officers and others in the industry said it isn't clear why the number of challenges to unemployment claims has grown. The labor force has changed over the years, with less of it devoted to manufacturing and more of it from the service sector. Some suggested the rise in disputed benefits stems from the fact that it is easier today for employers to track claims and try to block those they consider unwarranted. "Automation has contributed to the ease with which protests from the employer can be filed," said Doug Holmes, president of UWC Strategy, a group that claims large and small employers among its members and represents their interests in unemployment matters. Others speculated that changes in the law have made it easier for employers to block unemployment claims. Rick McHugh, a staff attorney for the National Employment Law Project who began handling such cases in the 1970s, said court rulings have slowly enlarged the definition of employee misconduct, making it easier for employers to say they rightfully fired a worker. "The courts are just not showing as much sympathy for employees who get fired," he said. "There's a higher standard of behavior that is expected of employees."

For example, back in 1941, the Wisconsin Supreme Court considered the case of a cab driver who'd had three accidents in two weeks and also shorted the company on a 40 cent fare, turning in only 25 cents. The court ruled that the driver was entitled to unemployment benefits because unintentionally careless or shoddy work did not constitute misconduct. It's unlikely, McHugh said, that the case would be determined the same way today. In many states, hearings are held daily on unemployment claims. The outcome most often turns on whether the former employee was guilty of misconduct. With employees and employers as adversaries, it's often difficult to determine the facts of a case, and just as difficult at times to separate misconduct from incompetence, which is not a reason to withhold the benefits.

During a day of hearings this week in Wheaton, human resources personnel sat across tables from former employees, and the discussion often turned to written warnings, company handbooks and who-told-what-to-whom. A former assistant manager at Ri Ra, an Irish Bar in Bethesda, fended off complaints that, among other things, he'd failed to greet guests at the door and one time poured a beer for himself after hours. A Verizon technician was charged with, in company terms, "detour and frolic." And a former salesman at Ethan Allen complained that there was no way he could have made his $35,000 sales quota -- and that's why he quit. "It's almost like a daily soap opera -- but it's real life," veteran hearing examiner Scott Karp said. "In this economic climate, the threshold for what employers consider minimum acceptable behavior has changed. They decide they're not going to put up with it anymore, so they start documenting the employee's behavior and often enough, the issue winds up here."

http://www.washingtonpost.com/wp-dyn/content/article/2009/02/...
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Top Opinion

  • Friday 2009/02/12 13:53:46
    Yes they should - businesses need to save every penny no matter what happens ...
    Friday
    +6
    If the employee is removed for "cause", fight until your dead. If removed because of "Barney Frank", bend over an take it! penny employees employee removed fight dead removed barney frank bend

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  • shelly.slader 2013/11/15 17:24:58
  • ɟʇʇoɔs 2009/05/29 00:04:21
    No they shouldn't - things are tough enough already.
    ɟʇʇoɔs
    So how is unemployment any different than these companies using bailout money to pay bonuses to CEOs???
  • KathieA... ɟʇʇoɔs 2010/05/16 00:01:36
    KathieArsenaultMaker
    +2
    Two wrongs don't make a right
  • bluost 2009/02/25 13:56:20
    No they shouldn't - things are tough enough already.
    bluost
    +1
    They should eliminate "for cause" as a reason to deny unemployment. Employers abuse this way too much. I replaced a former boss who laid 10 people off after fabricating a detailed file on these people and using it against them when challenging their UI.

    I came in and showed video footage of people taking a moment to stretch, talk by the water cooler, or other stuff. This was less than 1/1000th of 1% of their work time, but taken out of context you can blow it up to say they're being lazy.

    Yes, employers can and will do that in order to save themselves money. They have the motive - money, the means, and the weapon (the pen). Before you question me consider the concept of predator and prey...
  • SuperCee 2009/02/24 16:23:10
    None of the above
    SuperCee
    Each case is different. Where I work, I spoke personally to our business manager and she never contests anyone's unemployment. She told me straight up, they worked so they should get it. I feel the same way. My only exception is if you quit of your own free will.
  • Not Einstein 2009/02/12 21:43:06
    It's a complicated issue because ....
    Not Einstein
    Both employers and employees need to keep documentation. I recommend that any employee who has received either a verbal or written warning, write their side of the story and insist that it be put into their personnel records. Also, if you have clashes with a supervisor or boss, keep a journal of conversations, just in case.

    I have to wonder why employers continue to increase their rates of challenge, when the article states that they are still not winning any more than they used to. It seems that the "third party" companies who represent employers are syphoning more money from employers than they would pay out in benefits.
  • Kalee 2009/02/12 20:46:30
    None of the above
    Kalee
    If they were stealing money, they should not be able to get benefits.
  • JColliu 2009/02/12 18:48:44
    It's a complicated issue because ....
    JColliu
    +1
    If a person was fired and for good reason, tries to collect unemployment, I think it is fair that the employer fight it. If he was layed off, and tries, and the employer makes up a story, don't they have to produce proof of an offense?
  • Floe 2009/02/12 17:02:07
    None of the above
    Floe
    Perhaps employers should give a warning to an employee in writing that if their behavior does not change that they will be fired. Sometimes people get off course and need to be pulled back in again.
  • Rose for Equal Pay 2009/02/12 16:39:53
    It's a complicated issue because ....
    Rose for Equal Pay
    +2
    there are two sides to every story. Besides, it's cheaper for the employers to pay for unemployment than to re-hire and pay the employee.
  • jennifer1969 2009/02/12 16:14:47
    Yes they should - businesses need to save every penny no matter what happens ...
    jennifer1969
    +2
    Only if there is reason to fight. such as if they were fired for a good reason(stealing, insubordination, or just laziness)
  • sewing-mom 2009/02/12 16:01:06
    It's a complicated issue because ....
    sewing-mom
    +1
    every story has two sides. the business persons see it one way while the employee (s) see it another. It's not about the businesses saving a penny...simply....both doing the right thing.
  • ! 2009/02/12 15:21:00
    Yes they should - businesses need to save every penny no matter what happens ...
    !
    +2
    of course they should fight them and not only for their own protection from the % rate rising un-necessarily but to protect the Government against phony claims from scam artists.
    I had a company I hired that fought every claim I got and it was worth the fee paid to root out the malingerers!

    RWD
  • Seonag 2009/02/12 15:07:46
    None of the above
    Seonag
    +5
    I'd have answered the Yes one above, except I don't agree with the rest of it. YES, they should fight unemployment claims if the employee was released with 'cause.' Most companies have rules that must be followed and when an employee violates them, then it is cause to release them. My husband's company had an internet policy which every user had to agree to. They were able to block the porn sites. But one computer literate employee was able to get around it and downloaded porn onto his office hard-drive (not the company shared drive). IT found it, removed it and he was given a verbal and written warning that he had violated company policy. Three months later he did it again and was fired and escorted off site right then and there. He was denied unemployment because of it. He of course fought it, but lost. Sorry, he didn't deserve it.
  • chainsaw 2009/02/12 14:45:43 (edited)
    It's a complicated issue because ....
    chainsaw
    +3
    I know several employees who were fired for misconduct but still attempted to claim unemployment. For these cases, companies should dispute the claims. However, if a company does disputes all their claims, like some in our health insurance companies, than they should pay an extra penalty, half to the system and half to the employee for taking their time and creating stress. It's too cheap for a company not to dispute unemployment claims these days.
  • Wanda5245 - Citizen Activis... 2009/02/12 14:24:07
    It's a complicated issue because ....
    Wanda5245 - Citizen Activist Who Wants Spunkysmum Back On SH
    +2
    It is a complicated issue because in the company where I work we have hired people we thought would be good employees and they work hard for a while until they qualified for unemployment benefits. After they had been here long enough to qualify, it seemed that they wanted you to fire them so they could collect such benefits. On the other hand I have a niece who was fired by text message because she had asked off to go see her dying uncle in the hospital. Her sister called and told her that the uncle had already died and it was not necessary to make the trip. She turned around to go back home and her supervisor saw her. He thought that she had lied and without giving her a chance to explain what had happened; he fired her by text message. Both employers and employees need to keep all records of raises, promotions, disciplinary actions, keep an employment journal of what happens at work. Note any arguments with your boss or employee which could be used against you. You never know when you will be the next to be fired and you need to be prepared.
  • Early 2009/02/12 14:14:02
    No they shouldn't - things are tough enough already.
    Early
    +1
    Lord what are we as a nation coming too. All people especially workers that has been laid off of their job, deserve some sort of pay. These workers have families, and they must eat, and pay bills like everyone else.They are tax payers, and they have a right to income. If I was running this planet as President, there would be a new era of pay for laid off workers, and it would be called. TPIWOOW. They would get one lump sum of money, while seeking work but that would be the only way to get it, unless illness occur. They would have to learn to minimize the lump sum payment. The sum would be large enough for them if they budget right to survive, and start their own business. Or what ever they desired to do with it but after that lump sum payment, they would be own their own. That way I as President would know if the families are doing whats right to make ends meat. That would show because either they would expand or they would decline. For employers they would get penalized for doing what is not ethical concerning workers with families. That means until those families get their lump sum payment, the employers would be held accountable to support them. Insurance wise in all. The employers would not be able to reduce or cut anything until those workers get their lump sum payment. It would be fairness for all.
  • ! Early 2009/02/12 15:26:12
    !
    +1
    Deserve?? Deserve?? Why?? That is NUTS!
    You say "what are we as a nation coming too" I ask the question also. Whoever said an employee is ENTITLED to receive any compensation after they leave a job? Why would you think that? They are not working, they don't get paid! That is the way it should be. We MUST learn to take care of ourselves and not brely on the government!
    I worked for 49 years and NEVER was on un employment or welfare etc I would have been too embarrassed - I just got another job!

    RWD
  • randy v... ! 2010/04/11 04:00:50
    randy vaughan
    +5
    "Worked"? Sounds past tense, implying you're now retired. What you're missing and may not truly may not understand is that "times have changed". Put as simply as possible, "thirty years and a pension" has gone the way of the dinosaurs. I'm pushing retirement age myself and yes, when I was younger, it was still true (generally-speaking as are all such discussions) that most employers really did value their employees and employees reciprocated by giving their best. These days, forget about it. Companies don't give a damn, period, about anyone or anything else other than profit margins and bottom lines. And I, too, USED TO BE as dead-set against "entitlement mentalities" as you are. But since real-life people receive pennies compared to corporate welfare and bail-outs, well, to hell with "noble ideals" and all the rest. Do yourself a favor: Search the want-ads. See what companies "want" and "demand" and compare that to the pay they offer. I used to have great faith in the institutions in this country, government, business, etc. These days? Not one bit. People matter, period, not businesses, not governments, none of that crap.
  • Terry Early 2009/02/12 17:12:16
    Terry
    Actually a company can use the unemployment benefits any way they please; it is an insurance they buy into. Ex: some may use the benefit for vacation time instead of giving them the benefit of accrue time for vacation.

    As far as a lump sum of money there are companies that have what is “called severance pay”, which is your vacation time and other benefits, depending on the size of the company. Most small companies don’t have those benefits, such as convenience stores, small nursing homes so on and so forth.
  • Friday 2009/02/12 13:53:46
    Yes they should - businesses need to save every penny no matter what happens ...
    Friday
    +6
    If the employee is removed for "cause", fight until your dead. If removed because of "Barney Frank", bend over an take it! penny employees employee removed fight dead removed barney frank bend
  • Heptarch 2009/02/12 13:53:29
    No they shouldn't - things are tough enough already.
    Heptarch
    +5
    In general, no. Though the people who try to get away with claiming unemployment fraudulently should be jailed.
  • Tutboy 2009/02/12 13:49:03
  • ! Tutboy 2009/02/12 15:27:16
    !
    +1
    That is an asinine reply to the question.
    A company does not terminate people unless they have to do so.

    RWD
  • StarrGa... ! 2009/02/12 15:34:05
    StarrGazerr
    +3
    I'd agree that for the most part layoffs occur because they have to, but there are certainly SOME instances where a single employee will be fired because the boss doesn't like him or for personal reasons unrelated to job performance, and even when layoffs are necessary, the choice of which 10 out of 100 people to lay off is not always made in a fair manner.

    (And yes, I agree "not laying people off" is not exactly a rational answer)
  • Tutboy StarrGa... 2009/02/12 15:51:46 (edited)
  • ! StarrGa... 2009/02/13 04:21:07
    !
    Starr:

    Then I have to say that employer is not much of a management person!

    Good to see you!

    RWD
  • Tutboy ! 2009/02/12 15:51:28 (edited)
  • ! Tutboy 2009/02/13 04:23:23
    !
    You sound like an intelligent person and a smart employer. Thanx for the polite and informative answer.

    RWD

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