Unemployment

Read this employers guide to learn how to win your unemployment appeal hearing and maintain an accurate state tax liability.

When determining eligibility for unemployment benefits, state unemployment agencies use the information provided by both employers and claimants. Without proper documentation, agencies will typically determine in favor of the claimant. To prevent this from happening and ensure favorable results when contesting unemployment claims, employers have to track every type of policy violation and be able to prove the claimant was aware of the policy. The employer needs to show that the claimant was warned of prior incidents and knew that their job was in jeopardy before the separation occurred. The most effective way to achieve this is the proper implementation of a progressive discipline policy. Definition of a Progressive Discipline Policy A progressive discipline policy is a multi-step process outlining discipline standards for employers to follow, thus helping them to establish structure and predictability to the discipline process and properly document disciplinary actions. It helps employers avoid legal claims and improve employees’ performance with the help of carefully determined steps for overcoming problems related to employees’ conduct or performance that is not meeting a company’s defined standards and policies. Using such a system can be instrumental in resolving work-related issues, such as employment discrimination and wrongful discharge, but also in reducing the number of unemployment claims. Now that you understand the definition of progressive discipline let’s dive into the reasons why a progressive disciplinary process is important in the workplace. The primary goal outlined in the definition of progressive discipline is to improve the performance or behavior of employees through a gradual disciplinary process to ensure the standards of an organization are met. Implementing a progressive disciplinary process is crucial for several reasons, including:  Fairness and consistency: First and foremost, having an established progressive disciplinary process ensures fairness and consistency across the board. With progressive discipline, you can ensure all employees are treated fairly when it comes to addressing conduct, behavioral or performance-related issues. That’s because progressive discipline is a standardized process used to handle such situations, and employees should be aware of the consequences related to these types of issues.  Clear expectations: Having an established progressive disciplinary process also helps set clear expectations for employees. With consequences and expectations clearly defined, you can help prevent the occurrence of misunderstandings, as a progressive disciplinary process creates a transparent framework for performance and behavioral standards.  Improvement opportunities: Progressive discipline allows employees to improve by addressing their behavior or performance and working on it over time. Rather than severing ties the moment an employee makes a mistake, displays poor performance or a behavioral issue through punitive actions, you allow them to grow and succeed in their roles while improving professionally and personally.  Legal protection: With a documented and clearly stated progressive disciplinary process accessible to all employees, you can ensure legal protection over your organization. A well-established policy demonstrates an organization’s commitment to fairness when addressing performance or conduct issues while ensuring this policy is indiscriminate and consistent.  A progressive disciplinary policy is important for numerous reasons, highlighting the importance of having a strong policy to ensure employees understand their expectations and businesses remain protected.  Progressive Discipline Policy Steps The aim is to provide the structure on which employers may rely to provide consistent discipline. For a typical discipline policy, an employee receives a verbal warning followed by written warnings before termination occurs. Therefore, the policy should include: Verbal warning; First written warning; Second written warning; and Termination. However, a well-developed progressive discipline policy should be adapted to the needs of the specific employer and allow them the freedom to modify the steps when necessary but also provide the general structure that should be used for most discipline decisions. Implementing a Policy Proper implementation can be a critical element affecting the process of contesting unemployment claims. During unemployment hearings, a judge may want to know whether a claimant was aware of their misconduct and whether they were given clear warnings as well as room to correct their behavior. For this reason, employers should properly implement their policy, be uniformly consistent in administering it and use it as a solid foundation during unemployment hearings. Related: State Required Separation Notices Taking this into consideration, it is important to provide warnings to employees at the earliest opportunity after a violation is conducted and keep the incident fresh for whoever is preparing the warning. If too much time passes, the state unemployment office may question why action was not taken sooner. In addition to this, warnings given to employees should be simple and specific and describe the exact behavior related to a particular policy violation instead of listing every minor dissatisfaction. Also, it is equally important that employers explain what policy prompted the warning, why is a written warning the appropriate response, and what may happen if similar future infractions occur. For a progressive discipline policy to be effective, it should be clear who was present when it was implemented including whether the claimant acknowledged the warnings given. At the same time, to handle an unemployment hearing successfully, it may be useful to have an additional witness. Furthermore, employers with multiple supervisors or managers face the possibility that they may have different ideas about how and when to discipline employees, possibly leading to harmful consequences. However, having a progressive discipline policy in place can help resolve this and ensure that managers and supervisors not only follow the established policies but follow them uniformly to avoid the payment of unemployment benefits to employees who clearly did not follow the company’s established policies. Moreover, such an approach can also help prevent different groups of employees from feeling mistreated or unfairly managed. How Does Progressive Discipline Benefit the Company and Employees?  There are several key benefits of an established progressive disciplinary process for employers and employees. First, let’s dive into the numerous advantages companies can enjoy when implementing a progressive discipline policy:  Cost savings: As an employer, protecting your bottom line is always a top priority. Recruiting and onboarding is a significant cost that can chip away at your profits, which is why having a low turnover rate is crucial. Progressive discipline allows employers to address and resolve issues before they escalate, which can help avoid the costs associated with turnover, recruitment and training. Investing in the development of your current staff is typically more cost-effective than finding and onboarding new talent.  Employee accountability: Your progressive disciplinary process can be a great way to hold your team accountable for their actions and performance. By knowing there are consequences for poor performance or misconduct, employees will be encouraged to work to the best of their ability while behaving appropriately in the workplace.  Performance improvement: Continuing with the accountability employees feel when knowing a progressive discipline policy is in place, this policy helps hold staff to a higher standard, leading to improved productivity and better performance. It also allows employers to correct performance issues early on to ensure employees are productive and efficient.  Communication: Progressive disciplinary processes also open a secure line of communication between employers and employees, where supervisors and their direct reports can work together through coaching or professional development to improve in their roles.  While employers can reap many benefits of a progressive disciplinary process, so can employees. Some of the advantages staff can enjoy when working for an employer with a progressive discipline policy include:  Fair treatment: Employees working at an organization with a progressive discipline policy can appreciate a fair and transparent disciplinary process that’s consistent among all employees. Understanding that everyone within an organization is held to the same standards can help promote transparency and respect within the workplace.  Clear communication: A progressive disciplinary process helps to facilitate a clear line of communication between employees and management, as feedback can be provided in a structured manner that allows employees to understand where they can improve and the steps to take to get there.  Opportunity for improvement: A progressive disciplinary policy allows employees to improve from their mistakes to grow personally and professionally. This constructive approach promotes a growth mindset rather than resulting in immediate termination.  Impact on Workplace Morale  A progressive disciplinary process can profoundly impact workplace morale and how employees feel about showing up to work each day, and the workplace environment in which they operate. A progressive disciplinary process promotes and maintains a positive work environment. The structured and fair approach of a progressive discipline policy allows employees to feel secure in their roles, knowing any behavioral or performance issues will be addressed fairly and constructively for each employee.  A fair and consistent progressive disciplinary process can also help alleviate any feelings of fear or anxiety that employees might have. When employees know issues will be addressed progressively with the intention of improvement, they can have peace of mind knowing their job isn’t on the line if they make a mistake, have a performance issue or have a behavioral action occur. In turn, workplace morale is stronger and more positive as fear and anxiety associated with potential disciplinary actions are reduced.  Finally, an organization that instills a progressive disciplinary process can maintain strong employee morale, as it helps to promote a growth mindset focused on continuous improvement of performance and behaviors. In organizations where workplace issues go unchecked, an employee may continue an action or behavior that impacts the workplace environment. Through progressive discipline, issues can be addressed at the forefront and be used as a preventative measure to ensure morale remains high.  Reducing Unemployment Costs with a Progressive Discipline Policy Every employer may face unemployment claims but having a progressive discipline policy in place can help them reduce their unemployment tax liability. The key for an employer is being able to prove that they outlined expected standards and possible consequences of misconduct and that they issued enough warnings before terminating the employee. Also, when determining if an employer has discriminated against an employee, state unemployment agencies investigating the claim will look at how the employer treated employees who engaged in the same behavior. With the help of a progressive discipline policy, employers can demonstrate having a pattern and practice of applying the company’s established policies consistently and fairly. To make a progressive discipline policy successful, employers should tailor it to their needs, and make sure that it is applied consistently to all employees. That way it can become an invaluable tool for managing employees as well as for avoiding and defeating unemployment claims. Another approach that can significantly simplify unemployment claims management is the automation of this process. As a result, employers can rely on a team of experienced professionals and a user-friendly platform designed to reduce the risk, cost and burden of managing unemployment claims.

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As federal and state legislative sessions unfold, employers find themselves navigating a dynamic landscape of potential changes to unemployment taxes. This year, like many before it, has seen a flurry of activity with over 100 bills in various stages of consideration since January 1, 2024.  Addressing Trust Balances and Solvency  A recurring theme in these bills is the allocation of funds for state unemployment trust balances and programs. Across 10 states, legislation is under discussion proposing appropriations ranging from $2 million to nearly $90 million for bolstering respective unemployment insurance programs. This is particularly crucial for states with precarious trust fund balances that may not withstand economic downturns. According to the 2023 State Unemployment Insurance Solvency Report by the United States Department of Labor, only 16 states met the recommended minimum solvency standard by the end of 2023, unchanged from the previous year. Prior to the pandemic, this number stood at 31 states highlighting the significant impact of the pandemic. The risk of insolvency looms large for states ill-prepared to handle increased claims during recessions.  Facing potential insolvency, states may resort to requesting advances via Title XII loans from the federal government. However, this solution comes with the obligation of repayment as evidenced by the experience of two states and one territory mentioned on the 2023 Federal Form 940, all of which lost a portion of their FUTA credit due to outstanding loans.  Other Hot Topics: Labor Disputes, Weekly Benefit Amounts and Fraud  The payment of benefits during labor disputes is another pertinent topic in recent legislative agendas. With labor disputes increasingly making headlines and disrupting economies, legislators in 10 states are deliberating on the current disqualification of unemployment benefits for claimants involved in such disputes. If proposed legislation passes, employees involved in labor disputes would be eligible to receive unemployment benefits. While this may not directly impact all employers, it could significantly affect tax account funds for those embroiled in labor conflicts.  Legislators are also addressing claimant weekly benefit amounts and work search requirements to ensure accountability and prevent misuse of benefits. This includes initiatives to verify claimants' efforts in seeking employment such as following through with interviews and maintaining communication with prospective employers.  Data integrity and fraud prevention remain key areas of focus. With fraud reaching alarming levels during the pandemic, states are taking proactive measures, aided by grants from the American Rescue Plan Act, to modernize their unemployment platforms and enhance detection capabilities.  Several bills passed both state-level houses and senates and are eligible to be sent to respective governors for signature.  Below are those states along with a synopsis and link to the bill:  Colorado – HB 1189   This measure appropriates $76,527,050 for program costs related to unemployment insurance.  New Mexico – HB 2 This measure appropriates $13,846,600 for unemployment insurance to administer an array of demand-driven workforce development services to prepare New Mexicans to meet the needs of businesses. These measures would more-so benefit claimants and their ability to file claims quickly and efficiently.    Utah – HB 170 This measure addresses multiple issues:  Claimant would be disqualified from receiving unemployment benefits if they fail to appear without good cause for a scheduled interview for suitable work.  Claimant’s failure to accept within two days after the date the offer was sent, an offer of suitable work from an employer or the employment office as failure to accept suitable work.  Develop and maintain a website for employers to access information and report potential fraud related to unemployment insurance claims.  Virginia – SB 542 This measure makes an amendment to the VA Unemployment Compensation Act regarding labor dispute disqualification. It provides that a lockout by an employer will not constitute a labor dispute and locked out employees, who are otherwise eligible, will receive unemployment benefits unless one of the following occurs:  Recognized or certified collective bargaining representative of the locked out employees refuses to meet with the employer under reasonable conditions to discuss issues giving rise to the lockout.  There is a final adjudication under the federal National Labor Relations ACT (NLRA) that such representative refused to bargain with the employer in good faith.  The lockout is the direct result of such representative’s violation of an existing collective bargaining agreement.    Effective July 1 after enactment.  In the ever-evolving landscape of unemployment law, staying abreast of statutory changes is essential for managing costs effectively. Stay tuned for more insights on this and other pertinent topics. 

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