Unemployment Insurance, Who Decides?

Who makes the decision on whether a person is eligible to collect unemployment insurance? Well, many workers believe that it is an “earned benefit,” and that as an employee they’ve “paid into the system” via payroll taxes. This leads to the common misunderstanding that anyone who is unemployed, regardless of the reason, is therefore “entitled” to collect unemployment benefits.

On the other hand, employers may feel that they can decide which of their employees may collect unemployment benefits. If they want a person to be paid (or not paid) unemployment benefits, or they inform the state they want the person to collect (or not collect), their belief is that the state will pay (or decline) based solely on their recommendation.

This is a common misconception. The reality is that workers do not pay for unemployment, and employers don’t have the final say with regard to who is eligible to collect. The state makes the ultimate decision.

Unemployment is paid for by employers, either through unemployment payroll taxes (private employers) or a dollar for dollar reimbursement to the state (common for governmental agencies and non-profits).
The state governs the allocation of unemployment benefits, and therefore, also determines which applicants are eligible and how much they may collect. Because employers and separated workers may not see eye to eye on the reason for the separation, the state plays the role of the impartial third party and is the final arbitrator that determines which claimants will be awarded benefits and which will not.

The unemployment system was designed to be a helping hand for workers that lose their jobs through no fault of their own. The classic example is a layoff due to the employer having no more available work or downsizing.

However, the unemployment system has developed into an intricately complex system that processes claims filed by workers that have separated from work for countless different reasons or, in some cases, may even still be employed. The state unemployment offices have specific written laws and procedures that have to be followed when determining eligibility for collecting unemployment benefits, and the laws and procedures are different in every state.

DecisionHR has years of expertise with regard to unemployment law and state specific regulations. We take the separation information provided by you and present it to each state in a way that maximizes your chances of winning the claims that, by state law, should be denied.

Here are a few reasons that benefits may be allowed:

  • A permanent separation due to lack of work
  • Still working part-time, on call or as needed based on business needs
  • Quit with good cause attributable to the employer
  • Discharged due to reasons that are not considered willful misconduct

Some reasons that benefits may be denied include:

  • Quit without good cause related to the work
  • Still working full time
  • Still working a set, part-time schedule that does not change or fluctuate and was agreed upon at the time of hire (certain states only)
  • Discharged for willful misconduct related to the work

It is important to know your rights and obligations as an employer, as each individual situation is different.

If you have any questions about unemployment eligibility or any other HR related matter, please reach out to your assigned DecisionHR Human Resources Business Partner at 1-888-828-5511.