Should an Employer Contest an Employee’s Unemployment Claim?
There are a few reasons why an employee who has been terminated may not receive their unemployment insurance (UI) benefits (see our article on denying unemployment benefits). It mostly depends upon the circumstances surrounding the employee’s termination and whether or not the employer will contest the unemployment claim. The final approval of UI benefits is determined by your state’s unemployment office. Employers do have the option of contesting UI claims and that is extremely important to understand.
There are two main reasons when an employer should not contest a UI claim:
- The employee was laid-off
- The employee was fired for poor performance. Poor performance can be interpreted as sloppy work, carelessness, or the inability to learn new skills (anything that isn’t deemed misconduct)
Most employers should contest a claim only if there are grounds to do so — meaning that the employee quit without a compelling reason or engaged in misconduct. Typically, the employer will fight unemployment claims because they are concerned that their unemployment costs may increase. There are employers that do not realize that they are able to limit the amount of unemployment costs they pay by challenging claims.