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How to Determine if You Should Contest an Unemployment Claim

Unemployment compensation is designed to provide a temporary income support for workers who lose their jobs. Generally, unemployment compensation is awarded to individuals who have lost their jobs through no fault of their own.

The unemployment compensation system is a federal-state partnership. States finance regular unemployment benefits through taxes levied on employers. These taxes are experience-rated, which means that employers with a higher percentage of former employees receiving unemployment benefits pay a higher tax rate. The taxes, with a few limited exceptions, are paid quarterly. Because the experience rating of unemployment claims directly affects an employer’s taxes, it is in the employer’s best interest to appeal any unwarranted claims. Namely, these are claims generated when an employee has voluntarily resigned or when the employee was involuntarily terminated for intentionally breaking a work rule (otherwise known as “willful misconduct”).

This guide will help HR professionals determine whether they should contest an unemployment claim of a former employee.

Step 1: Receive Notification of a Claim

When an employee files for unemployment, the employer will receive a notification from the state unemployment commission. The notification will be based on information provided by the employee supporting his or her application for benefits. Typically, the commission includes a questionnaire requesting additional details from the employer to help make a determination on the employee’s eligibility for unemployment income benefits; this is sometimes known as a separation report. The unemployment commission may also invite the employer to participate in a hearing (usually over the telephone) to assist the commissioner with determining whether the claim should be awarded.

Step 2: Verify Details of the Claim

The separation report from the unemployment commission typically contains general facts regarding employment and the event that resulted in the claim. This is information that has been provided by the employee to the unemployment commission. The employer should verify all the details in this report and correct any inaccuracies.

Employers should follow these steps:

  • Check to ensure that the individual on the claim was, or is, an employee of the organization. This excludes temporary staffing agency employees and independent contractors.

  • Verify all data on the report, including wages, dates of employment, severance and vacation payouts, and any other information listed on the report.

  • Determine the details surrounding the event that caused the claim. Generally, this would be the details surrounding the termination of employment, but employees can also receive partial unemployment if their status has been changed from full- to part-time employment.

Step 3: Determine Whether the Employer Wishes to Appeal the Claim

Generally, when an employer decides to participate in a fact-finding hearing conducted by the unemployment commission, it does so because it feels the claim is unwarranted. However, it is important to remember that an employee has a legal right to receive unemployment if:

  • The employee has lost work through no fault of his or her own, such as through a layoff.

  • The employee’s work hours have been restricted or reduced through no fault of his or her own.

An employee generally does not have a right to receive unemployment benefits in the following circumstances:

  • The employee voluntarily left his or her job. This situation does not include cases in which the employee is given a choice by the employer to either resign or be fired. A forced resignation is not considered a voluntary termination. It also may not include a situation in which an employee quit because of illegal acts of an employer such as discrimination, but this depends on the unique circumstances involved. There are also circumstances, such as resigning based on a disability and relocation, when an employee may be found to have “quit with good cause.”

  • The employee engaged in willful misconduct that resulted in the loss of his or her job.

           Examples of willful misconduct include:

    • Intentional violation of company policies or rules. The employer must be able to prove that the policy or rule exists and that the employee, regardless of having knowledge of this policy or rule, violated the policy or broke the rule intentionally.

    • Failure to follow instructions. Again, the employer must show that it provided instructions to the employee and that the employee failed to follow those instructions. It is not considered willful misconduct if the unemployment commission determines that the employer’s instructions were unreasonable or that the employee’s refusal to follow instructions was justified.

    • Excessive absenteeism or tardiness. This is considered willful misconduct if the employee does not have good cause for his or her absences or if the employee fails to report absences or tardiness according to company rules. An example of a good cause for absences is absences due to illness or disability.

    • Failing to meet normal standards of behavior. These are standards that any workplace would require but may not be explicitly stated in company rules, such as:

      • Sleeping on the job.

      • Stealing.

      • Fighting.

      • Being intoxicated or testing positive for illegal substances.

      • Lying or falsifying information.

      • Using abusive or offensive language.

After reviewing the facts that led to the claim, if the employer believes that the employee has a legitimate right to unemployment, then the organization should submit the separation report to the unemployment commission and confirm the information contained in the report.

If the organization believes that the employee is not entitled to unemployment, it should proceed with the remaining steps.

Step 4: Gather Evidence

If the employer has determined that the employee does not have a right to unemployment based on its understanding of the facts surrounding the claim, the next step is to gather the evidence necessary to make its case to the unemployment commission.

The employer should gather all written evidence pertaining to the facts of the case such as the following:

  • Attendance records.

  • A resignation letter.

  • Any disciplinary actions relevant to, or leading to, the termination. This demonstrates that the employee was aware of the violation of conduct and, in some cases, was provided an opportunity to correct the conduct.

  • A letter from the employee requesting a reduction in work hours.

  • Any additional documentation surrounding the particulars of the event that led to termination.

Copies of this information should be sent to the unemployment officer responsible for conducting the hearing. The separation report and indication that the employer will be attending the hearing should also be sent to the unemployment office.

Step 5: Attend the Hearing

During the unemployment benefits hearing, the employer should answer the unemployment officer’s questions truthfully, factually and professionally. In these meetings, the participant is a representative of the organization; therefore, the employer’s image being portrayed to officials and members of the public is based on the representative’s conduct at the hearing. Some tips for participation include:

  • Prepare. The representative should review and read the evidence the employer has submitted, and know the facts of the case prior to the hearing.

  • Remove emotion. These situations can be emotional, as they deal with determining whether an individual will be receiving income that could potentially sustain him or her. The representative should stick to the facts and not engage in argumentative conversation with the employee before, during or after the hearing.

  • Be on time. The unemployment commission reserves only a few minutes for each case; if the representative is not available when the officer is ready to begin, the officer will move on without his or her input. If the original representative finds that he or she is unable to participate, he or she should ask another organizational representative to participate in the first representative’s place. 

Step 6: Receive the Determination

After the hearing is complete, the unemployment officer will usually tell the parties when they should expect to receive a determination in the case. When the employer receives the determination, if the commission has decided in favor of the employee, instructions will be included on how to appeal the decision. Customarily, the unemployment officer will explain reasons for the determination. The employer should use that explanation to help decide whether an appeal is worthwhile.

Sample Scenarios to Assist with Determining Participation in Claim Hearings

These scenarios may assist employers in determining whether there is good cause tocontest a claim; however, only the unemployment commission can make a determination regarding benefit awards, and the commission may disagree with an employer's opinion regarding unemployment eligibility.

Example 1


ABC Company has a clear policy on absenteeism. Employees are required to call into work two hours before the start of their shifts and to speak with either a manager or a supervisor if they are unable to come into work. If employees do not follow this procedure, their absences are considered unexcused. ABC Company has a progressive absenteeism policy in which employees will go through various stages of discipline as unexcused absences increase, ultimately leading to termination if employees experience seven unexcused absences within a 12-month period.

Jane has not been following ABC Company’s policy with regard to unexcused absences. After the first time she left a message saying she was unable to come into work, her supervisor spoke with her and reminded her of the company policy. Her supervisor also explained to Jane that this absence would be considered unexcused. After repeated unexcused absences, Jane was terminated per company policy.


Excessive absenteeism is considered willful misconduct when not based on an employee’s illness or disability. When Jane files for unemployment, ABC Company should participate in the claim hearing and provide the unemployment commission with the records of Jane’s unexcused absences. The employer should also provide the commission with a copy of the company policy and instances when the policy was explained to Jane, such as a signed acknowledgement from the employee handbook with this policy, issued to Jane.

Example 2


ABC Company has experienced a slowdown of widget orders over the last few months. Because of this loss of business, ABC Company can no longer afford to employ all 10 widget makers it has on staff, nor does it have enough work for these widget makers to perform. ABC Company has decided to lay off a widget maker, and John is notified that his employment will be ending due to lack of work.


In this scenario, John has lost work through no fault of his own. He has a legal right to unemployment. Therefore, challenging John’s unemployment claim would not be an efficient use of time or resources for the employer.

Example 3


Sally has been unhappy working for ABC Company for some time. Because of this, she has decided to seek employment elsewhere. Sally receives an offer of employment from another employer and submits a letter of resignation to ABC Company. A week after leaving ABC Company, Sally learns that her offer with her new employer has been rescinded. She files for unemployment.


In this scenario, Sally has willfully left her employment with ABC Company, and ABC Company should participate in the fact-finding hearing and explain to the unemployment commission that Sally would still be employed with ABC Company had she not voluntarily resigned from her position. Sally’s eligibility for unemployment compensation will be dependent on state law and review of the specific circumstances relevant to the termination to determine if Sally will be awarded unemployment.

Example 4


Bob is currently going through a divorce and now has child care issues that he did not experience previously. He has asked ABC Company if it would consider reducing his hours from full time to part time so that he can care for his children. ABC Company agrees to the reduction in work hours. Once Bob begins working the new schedule, he realizes that he cannot afford to work only 20 hours per week. He files for partial unemployment.


Bob has willfully reduced his hours; therefore, he would not be eligible for unemployment compensation. ABC Company should participate in the claim hearing and present evidence showing that Bob’s reduction in work hours was voluntary.

Example 5


ABC Company is experiencing a slowdown in sales and would like to temporarily reduce the hours of the sales team from full time to part time. When business picks up again, it is likely that the sales department’s hours will increase. This loss of wages causes several members of the sales force to apply for partial unemployment.


Because the sales team has lost hours and wages through no fault of its own, team members may be eligible for partial (or supplemental) unemployment income. Therefore, it would not be in the employer’s best interest to participate in the claim hearing.


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