Will Your Ex-employee Collect Unemployment?

Certainly one of the most misunderstood areas in employment law relates to whether a terminated employee is entitled to unemployment compensation benefits. Many employers “assume” that if they terminated someone for tardiness, absenteeism, or failure to follow procedures, that person would not be able to collect. That’s not necessarily true.

Each state has different regulations and rules with respect to assessing entitlement to unemployment. There is also a difference in the duration of benefits from state to state.

In Massachusetts, General Laws Chapter 151A regulates unemployment compensation benefits. The issues surrounding the termination are examined by the Massachusetts Division of Workforce Development / Department of Unemployment Assistance. The purpose of unemployment insurance is to provide benefits for those employees who become unemployed through no fault of their own. In order to collect benefits, individuals must be able to work, be available to accept employment and be actively seeking employment in his or her usual occupation or in any other occupation for which he or she is reasonably suited.

If the terminated employee applies for unemployment compensation, the employer receives a phone inquiry and/or hard copy of a form to complete. Properly completing the form is important, as it will become part of the “record” for further proceedings.

Should the employee be granted benefits by the DUA, employers can protest if the employee quit the job without good cause or was fired for misconduct. Upon an employer’s appeal, a hearing will usually take place at the local DUA hearings office. Employers are often quite surprised at the nature of the questions asked by the DUA hearings examiner. The focus of the inquiry is on what led up to the termination. Questions about written policies and warnings are common.

This is perplexing to the business owner who has the impression that most employment relationships are “at-will” and doesn’t understand why providing warnings to the employee would be relevant. In an at-will situation, the employer may indeed terminate an employee at any time, for any reason or no reason, within the limits of the law. However, if the employer wishes to object to unemployment compensation because the employee violated the business policies, the hearings examiner will be focused on information about those policies. The employer will be asked if the policies were known and understood by the employee, whether the policies were uniformly enforced, and/or whether the employee knew that, if he violated the policies, he would be terminated from employment.

Having proper documentation in your personnel files is the best way to defend a matter at the Division of Unemployment Assistance. Copies of written warnings provide evidence that the employer knew the conduct was unacceptable. Demonstrating that the employee signed an acknowledgement of receipt of personnel policies will go a long way to show an examiner that the individual was aware of your expectations and willfully disregarded the interests of your business. Naturally employees who are separated from employment because of a reduction in force, or because the nature of their job performance is no longer a good fit for your company, are entitled to collect benefits.

This article may be considered advertising under the rules of the Massachusetts Supreme Judicial Court.