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Making Sense of Unemployment Claims: Tips for Small Business Owners

Unemployment claims can quickly become a drain on your business’s finances. You do your best to treat your employees fairly. Chances are if you’ve had to fire or lay off employees, it’s for a good reason. Still, if you want to be sure that you’re effectively managing unemployment claims, make sure you’re following these key tips:

Tip #1: Keep the Paperwork

You already know how important it is to document everything. Proper documentation can be the difference between a lawsuit that’s settled in your favor and one that leads to a costly payout by your company at the best of times–and unemployment is no different. When you’re dealing with your employees, make sure you keep track of everything, including:

  • Reprimands, especially those that could ultimately lead to an employee being fired
  • An employee’s resignation: simply providing proof of voluntary resignation can increase the odds of a claim being settled in your favor by 10-15%.
  • Employee complaints, including those that are seen as being unreasonable by your staff at the time.

When you keep track of employee issues, you’ll put yourself in a better position to deal with the potential for an unemployment claim and raise the odds that you’ll be able to dispute them successfully. If you don’t have that paperwork, on the other hand, your dispute may turn into a serious case of “he said, she said,” which can, in turn, decrease your odds of winning the dispute.

Tip #2: Provide All the Information

It’s easy to gloss over the reason for an employee leaving. “They quit,” you’ll say, thinking that’s the end of it. Failure to provide all of the information, however, can stall the process, making it difficult for employees who do deserve unemployment benefits to attain them or making it possible for employees who don’t deserve them to get those benefits. It’s important, therefore, that you provide all the information once your former employee files a claim. Provide that documentation you were collecting in order to ensure a more effective conversation. This will include any documentation about the reasons an employee was fired, if that’s relevant. You’ll need to prove that you had reasonable cause for firing that employee and that it wasn’t arbitrary or the result of discrimination.

Tip #3: Factor in the Possibility of Lawsuits

It’s hard enough to fire an employee in the first place–especially if it’s someone who’s been with your company for a long while or someone that you feel sorry for. Denying them unemployment once they’ve filed that claim may feel as though you’re taking away money from their family. It’s important, however, to make sure that you’re not allowing a claim to go through without reason–and not just because of its impact on your unemployment insurance. Allowing an unemployment claim to go unchallenged can also sway future attempts at a lawsuit. For this reason, it’s critical that you cover your back and deal quickly with undeserved claims for unemployment.

Tip #4: Partner with a Professional Employer Organization

Forming the right partnerships long before you have to deal with potential unemployment claims can have a big impact on your business as a whole. A PEO can help you write an effective employee handbook, properly track and document any problems with employees, and deal with unemployment claims when they do come up–all of which can have a big impact on your success if you do have to contest an unemployment claim.

If you’re dealing with an unemployment claim, especially a claim that isn’t justified, it’s important to take action quickly and effectively. The better you deal with those claims, the more you’ll reduce the expenses associated with firing employees–not to mention protecting your business from future repercussions. If you’d like the complexity of unemployment claims and related HR tasks taken completely off your to-do list and added to ours, contact us today.

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