Reducing Unemployment Claims with Effective Documentation

Published: October 17, 2023 by Vikki Chaffin

When an unemployment claim is filed by a separated employee, the unemployment agency considers the information provided by both the claimant and former employer to determine if the claim will be approved for payment. The state’s default position is the separated employee is allowed to receive unemployment compensation if they are separated from employment through no fault of their own. The benefits they receive replace part of their wages for a limited period, with those benefits paid by the state agency, but funded by unemployment taxes paid by all employers. Each individual employer’s state unemployment tax rate is negatively impacted by the amount of benefits charged against their unemployment account, so it is critical to create and maintain detailed documentation to help ensure only valid and warranted unemployment claims are charged against their account. This practice can help employers by reducing unemployment claims when avoidable.

Unemployment Strategy at Work in Reducing Unemployment Claims

As the state begins to adjudicate an unemployment claim, they reach out to both the claimant and the employer to gather all relevant facts related to the separation from employment. Not surprisingly, when there is a discharge for cause or a voluntary quit where the claimant alleges good cause related to the work, the parties often have very different views of what caused the separation and the chain of events leading up. When the state is considering the details of the separation and the eligibility of the claimant, an employer’s documentation can be the determining factor in the claim.

Creating and maintaining detailed documentation is critical to ensure all relevant details are available if an unemployment claim is filed, as well as many other potential issues that may arise after a separation. This begins with the initial hiring and orientation process and continues throughout an employee’s tenure with the company.

Here are some best practices when it comes to documentation:

  • When providing company policies, rules, and regulations to newly hired employee, require written confirmation that the employee has received the policies or handbook, and understands it is their responsibility to review and understand the company policies.
  • Unless there is an egregious act of misconduct that requires immediate termination, do not discharge employees without prior written warning.
  • Uniformly enforce all policies and document consistently for all employees.
  • Be detailed when recording warnings and provide measurable expectations to avoid further disciplinary action.

Following these guidelines will ensure that if any issues arise from an employee’s separation, the documentation is available to support all actions taken, and there is the best chance of getting a favorable determination on an unemployment claim if the separation was due to willful misconduct or a voluntary quit without good cause.

Effective Documentation Makes All the Difference

In general, documenting can be seen as a tedious and time-consuming activity. Understanding its importance will shed new light on the process, and why it is vital in protecting the company’s bottom line in the long run.

First and foremost, document events as they occur. Do not delay by making a mental note to do it, as recollection may soon fade, and critical details are not captured. Be sure to record the specific details of what happened and who witnessed the event. The details of the incident will be critical at every level of the unemployment process, and the witnesses may need to be gathered if the case ends up scheduled for an unemployment hearing.

When issuing a warning in accordance with your progressive discipline policy, be sure to record the details of what the issue or incident was that led to the warning or termination, the details of the specific policy that was violated, and what specific, measurable actions are expected of the claimant to avoid further disciplinary action. Keep in mind that in a discharge situation, the unemployment agency is determining the claimant’s eligibility for unemployment benefits on whether the separation was caused by an act of willful misconduct on the claimant’s part.  For unemployment purposes, willful misconduct is defined as a willful or wanton disregard for the employer’s best interest.  Including specific, measurable actions in the case of a poor performance issue can provide proof that the claimant failed to follow instructions instead of it being considered just an act of inability or an inadvertent error that caused a termination.

When it comes to cases of employees who voluntarily quit their jobs, request that they provide a written letter of resignation or complete a company resignation form. If they submit a resignation by text or other electronic method, capture a screenshot, if possible. If they resign verbally with no notice, be sure to document the specifics of what they cited as the reason for resigning. The details of any conversation regarding a resignation could become critical for an unemployment case, so be sure to record the tone and details of the conversation from your perspective.

Ensuring Relevant Documents are Available

A common mistake that is made by employers is creating a termination or warning document with general information or no specific details because the manager knows the details and will be able to recite them when they are needed. As part of most state unemployment processes, the details of a separation could be needed from as far as 18 months in the past, and occasionally even further! While the details may be fresh in your mind for a few months, will you be able to recall all the critical details 18 months from now? Even if it’s an event where you most certainly will remember the details, can you say with 100% certainty that you will still be at that location or with your current employer 18 months from now? It could be someone else that needs to follow your notes to prevent the employer’s unemployment account from being charged in a protestable case. Be sure to record all the relevant details when the incident occurs to avoid any information gaps when they are needed!

Overcoming UI Challenges with Digital Solutions for Reducing Unemployment Claims

The best course of action toward reducing unemployment claims is to take a comprehensive, vigilant, and proactive approach. Having meaningful, detailed documentation should be a key component in your plans.

UI claims management requires time, structure, organization, and resources. To be able to put so many pieces together at the right moment, and utilize them when needed, requires an entire, well-managed system. In the digital era, that system is automated and provides a huge relief, allowing businesses to document employment infractions and corrective actions, file and protest unemployment claims, appeal unfavorable decisions, prepare for an unemployment hearing, audit charges, generate reports, and much more.

Placing trust in outsourced UI management can result in improved compliance, reduced claims, a better claim win ratio, and tax savings. Learn why.

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