For workers in educational institutions, summers and holiday breaks constitute temporary stoppages of employment initiated by employers. As they cannot be considered responsible for these interruptions, they are eligible for unemployment insurance benefits for that period. Even employees who are getting paid over the summer may file unemployment claims since the payments they receive during the summer are related to the work performed during the school year, therefore, it is a delayed payment.
The term “reasonable assurance” refers to a verbal or written contract indicating a promise of future continuation of employment offered to employees in educational institutions following the school break or vacation. If an employee has the reasonable assurance that after the break they will be able to return to the position they previously held, they will not be able to use unemployment benefits.
This is what makes reasonable assurance a significant opportunity for educational institutions and, in some states, nonprofits that provide educational support services to reduce the overall cost of unemployment benefits, and consequently, their UI tax rate.
Avoiding Claims with Reasonable Assurance
Both federal and state unemployment regulations consider reasonable assurance a ground for denial of unemployment claims filed by educational employees for periods between academic terms. It indicates a certainty that employment will continue after the break is over. What is important to understand and differentiate is that employers provide reasonable assurance for employees only temporarily discharged, but scheduled to return to work during the next school term, and not for those who they do not plan to rehire, but have simply let go.
There could be slight differences in how each state defines the situation and overall conditions of temporary discharge and reemployment, but generally, reasonable assurance provides a good-faith job offer to employees in educational institutions for the following academic term. There could also be some differences in how reasonable assurance regulations get interpreted from state to state. Additionally, the definition of the educational employer or educational institution has its specifics determining their eligibility. In some cases, reasonable assurance encompasses also the employees working for nonprofits that provide services to educational institutions or act on their behalf.
Whatever the nuances in regulatory terms and stipulations, one thing remains the same, and that is the eventual reverse outcome of reasonable assurance, as it offers a high, but not the absolute level of certainty. If an employee ends up without employment at the end of the break and upon the start of the new term, it is possible for them to retroactively claim the unemployment benefits and ensure payments they were entitled to for the period of unemployment, regardless of the state they worked in.
Craft a Reasonable Assurance Letter for Your Employee
When providing an offer of reasonable assurance, employers are free to choose the format. It can be a verbal promise or a written document, but there is an undeniable advantage of having the agreement in writing, and alongside a receipt of the agreement signed by the employee. A responsible employer is not going to miss the chance to properly document and support every activity related to sensitive HR issues. In this case, if notified of a UI claim an employee filed to a state agency, the employer can simply provide this document as indisputable evidence of reasonable assurance given to the employee, and secure a win at the hearing.
A solid reasonable assurance letter needs to include the following:
● Name of employee,
● Name of employer,
● Positions held,
● Type of work the employee performed during the previous period,
● Type of work the employee will be performing in the next period,
● Terms and conditions of future work activities,
● Previous academic year or term end dates,
● Upcoming academic year or term starting date,
● An unambiguous statement offering employee reasonable assurance of returning to work for the specific school year, including any scheduled vacation or holiday periods contained within,
● The name and position of the letter issuer, provided that the notice comes from an individual authorized to issue reasonable assurance but not authorized to enter into a contract, and
● A statement that a reasonable assurance letter is not issued with the aim to create a contract of employment or to alter an existing one if any.
Keep a copy of all reasonable assurance letters issued to employees on file; always request a signed copy, or retain a signed verification of receipt in case of mailing the letter.
Reasonable Assurance as an Integral Part of UI Policy
Even though many businesses count unemployment claims payments as inevitable expenditures and accept them as such, it is wise to know that claims can negatively impact the tax rate and reimbursements they are required to provide for UI benefits. With that knowledge comes a realization that although it takes a lot of time and significant resources to remain on top of all the requirements, employers ought to use every opportunity to keep costs at bay. When presented with two options – pay unemployment benefits to temporarily discharged employees, or secure them with reasonable assurance and avoid costs of UI benefits being charged to your account, a choice to make is rather obvious. By opting for reasonable assurance, you keep your annual compensation budget low and save time and resources you would otherwise have to employ to deal with unemployment claims.
Simple as it may sound, the complex UI management can be further made easy by outsourcing the unemployment administration. The digital platform serves to streamline and integrate the multiple aspects of the unemployment insurance administration by ensuring legal compliance, eliminating human error and missed deadlines, and improving the claim-win ratio.
By automating unemployment management you secure substantial savings in time and resources for your business.