Tips for Successfully Disputing Unemployment Claims

By Allen Smith, J.D. Jun 30, 2015
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LAS VEGAS—Southwest Airlines improved its success rate in disputing unemployment claims by 23 percent for discharge cases by implementing a system for managers that helps them record the story behind an employee’s departure, according to Kevin Minchey, an attorney with the airline. This translated into a savings of $400,000 in one year, he noted.

Speaking at a concurrent session at the Society for Human Resource Management 2015 Annual Conference & Exposition on June 30, 2015, Minchey said that, in the past, managers often would recommend no protest of unemployment compensation claims and would provide no information about work separations.

Now, to ensure that benefits aren’t being paid when they shouldn’t be, Southwest managers are encouraged to provide information on the reasons for separations through an online interface.

Probe Deeper

Individuals can file for unemployment benefits when they resign, are discharged, are laid off or work part time, noted Bob Austin, vice president of unemployment compensation operations at Equifax Workforce Solutions and a session co-presenter.

Sometimes employers say an employee quit for no reason, Austin remarked, but there’s always a reason. Just providing a copy of someone’s written resignation improves the chances of employers successfully disputing an unemployment claim by 10 percent to 15 percent, he emphasized.

Before Southwest adopted its online interface for unemployment claims, managers often would not respond when asked via e-mail why someone left. Or they might say it was a voluntary quit and leave it at that.

Now, with the interface, managers are prompted to explain more thoroughly why an employee left and they receive notes about urgent claims and notices when there is a decision. “It gets managers more excited about unemployment” when they can see how claims cases turn out, Minchey noted.

If managers aren’t providing a lot of details about separations, Minchey can see that and can encourage them to provide more information.

It’s estimated that $4.5 billion per year is paid erroneously in unemployment compensation, Austin observed. He added that frequent reasons for erroneous payouts include:

  • Individuals’ failure to meet the work search requirements.
  • Individuals double-dipping by earning money and collecting unemployment compensation at the same time.
  • Cases not being adjudicated correctly.

But managers’ failure to share reasons for work separations is a contributing factor as well.

Austin advised that, rather than accepting that a claimant quit voluntarily and gave no reason, employers should ask managers questions such as:

  • Did the departing employee give a specific reason for resigning, such as marriage, domestic obligations or school classes?
  • Was continuing work available if he or she did not quit?
  • If the situation was temporary, did he or she request a leave of absence? If so, explain.
  • Did the claimant provide a written resignation?
  • Who knew the claimant was quitting? What do they know about the separation?

Analytics and Benchmarking

Analytics can help lower unemployment claims, too, Austin said. He noted that employers can track different types of unemployment claims (at Southwest, for example, claims involving attendance issues often are filed) to help them better predict whether a challenge would be successful and to keep an eye on developing trends.

Benchmarking a company’s success rate against the success rate industrywide also is useful, Austin observed. A company may think it has a healthy success rate until it compares its numbers against those of the industry.

Unemployment tax costs per employee are at $463 per year, 48 percent higher than in 2008. That figure is not going to drop to pre-recession levels, Austin said, so employers need to do what they can to keep unemployment claims in check.

Allen Smith, J.D., is the manager of workplace law content for SHRM. Follow him @SHRMlegaleditor.
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