How To Defend Yourself Against Claims For Unemployment Benefits
Protecting Your Company From Unemployment Fraud
It’s inevitable that employers will eventually face claims for unemployment benefits from previous employees. Unfortunately, many employers do not understand how the unemployment system works, what it means when a claim is filed, and if or how they can fight any claims that they receive.
The best step to take after receiving an unemployment claim is to contact your Arizona business attorney for guidance.
How Does The Unemployment Benefits System Work?
Arizona employers pay a specified amount of money to the Arizona Department of Economic Security (DES) for each of their employees. Essentially, this is a self-funded insurance pool that is managed by the state. The amount your business must pay will depend on your business rating.
Your business rating is based on how long your business has operated and how many claims you have paid out to previous employees. The business rating structure has changed somewhat since the COVID-19 response and many businesses are facing increased ratings, which means higher payments to the DES, even if they have not previously paid out any claims.
Employees are eligible to receive unemployment benefits if they were let go or laid off without legal cause, or if they experienced a significant reduction in hours of work. To qualify, the employee must reach a minimum earnings threshold. If the employee quits their employment voluntarily or is fired for a cause that meets state requirements, they will not be eligible for unemployment benefits. Additionally, they must prove that they are actively applying for employment and not choosing to remain unemployed. These situations can be complex, so it’s best to discuss the situation with Chandler business attorney.
What Does An Unemployment Claim Mean For My Business?
If your business gets a claim for unemployment benefits, it means that one of your previous employees has requested unemployment benefits from the DES. To make a claim, the former employee will need to fill out an application in which they state the reason why they are no longer working for your company, the dates of their employment, what wages they earned, and more. The DES will contact your business and give you a chance to respond. This is why your Gilbert business attorney will recommend having a statutory agent so that you don’t miss important legal notices. Timely response to the DES is important if you want to correct information or refute any claims that were made by your former employee.
If you choose to respond, the DES will determine whether the claimant is eligible for unemployment benefits. Each side, employer and employee, will have the opportunity to appeal the decision and request a hearing or trial. If this happens the appeal will go to an administrative law judge in a DES-specific court, where evidence and witnesses can be provided to support claims. This commonly includes claims of being fired without cause or disagreement about whether the employee forced the employee to quit. Your Glendale business attorney can provide representation at this hearing if it becomes necessary.
Should I Fight Unemployment Claims?
When they receive a claim, many business owners ask their Scottsdale business attorney if they should fight the claim. If the employee was terminated for cause in accordance with state statutes or quit voluntarily, employers have a chance at winning the case. Successful unemployment claims against your business mean that you will need to pay a higher amount of unemployment to DES for each of your employees.
But whether to fight an unemployment claim requires careful consideration. Sometimes, employees have other grudges or claims against their former employer that they have not pursued legally. If they are denied unemployment benefits, they may decide to bring other legal action against your business that could damage your reputation or require significant legal fees and payouts.
It’s also important to consider whether your business has sufficient records to prove that the employee was fired for cause or quit voluntarily. The time and expense of fighting an unemployment claim may not be worthwhile if you do not have sufficient proof to support your denials. Talk with your Avondale business attorney about whether fighting the claim is the right choice for your business.
How Can I Defend Against Unemployment Claims?
Careful business practices are the best way to protect yourself from unemployment claims. For example, you may run into trouble for terminating an employee who doesn’t show up to work on time for cause, if you do not have a written policy regarding tardy employees. It’s also crucial to document each time the employees arrives late or doesn’t show up for work.
When the only “evidence” is claims against each other, the DES will tend to side with employees. This means that getting documentation in order is crucial if you want to successfully fight unemployment claims. Talk with your Arizona business attorney about drafting offer letters, employment agreements, employee handbooks, disciplinary procedures and documentation, and termination letters to pre-emptively protect your business and build up necessary documentation for fighting unemployment claims.
Schedule Your Consultation With a Trusted Arizona Business Attorney
If your business is facing an unemployment claim, or you want to develop documentation to protect your business from a future claim, schedule your consultation with Denton Peterson Dunn. We are a trusted law firm in Arizona with expertise in business law. We are ready to help you defend your business against unemployment claims and help you establish procedures that can provide protection for the future. Call us today to speak with one of our knowledgeable attorneys.