How Employers Can Win Unemployment Claims, Saving Thousands


Unemployment insurance is a lot like auto insurance.  The more claims you have, the higher your rates.  Employers can save their bottom line and pay a lower tax rate when former employees make fewer claims on the employer’s account.

According to the Labor Department, employers are faced with more unemployment claims than ever before and at the same time, more employers are fighting claims than ever before.

Knowing when to fight claims is the easy part, knowing how to fight claims is the tough part!  There are a lot of gray areas and employers lose more than two-thirds of the time they contest unemployment claims!

So how can employers increase their chances of winning more unemployment claims?  

The Employment Development Department (EDD) and the Administrative Judges representing EDD are looking for a credible witness who will suit up and show up and complete the required paperwork on time as well as speak the same legal HR terms they do, such as using the words GROSS MISCONDUCT or VOLUNTARY RESIGNATION.  

The best witness provides professional and credible representation consistent with the employment practices and policies, all which are supported by the employee handbook and proper documentation on file.

Recently a client asked if they could potentially win an unemployment claim for terminating an employee who breached the Company’s sexual harassment policy for a violation that occurred 6 months previously.  

I advised that the Administrative Judge would want to know what led up to the final incident to determine gross misconduct and if there was no final incident, the Judge might further investigate:

1) Did the employee know he/she was wrong?

2) Did the employee do it on purpose?

3) Did the employee violate a universal law or company policy?  

If the employer can not validate these questions, the employee might win the case.

Another client asked when it is appropriate to fight unemployment claims.  This employer had an employee who was underperforming and on a performance improvement plan.  The client asked if they terminated the employee and the employee filed for unemployment, would it be prudent to fight the unemployment claim?

I advised the client that EDD grants unemployment benefits to anyone who is out of work through no fault of their own or if their hours have been reduced and they are physically able to work, actively seeking work and ready to accept work.

Under state and federal laws, employees who are fired for misbehavior or quit voluntarily are NOT eligible for unemployment compensation. 

Just because an employer is not satisfied with the employee’s work performance, this is not a good enough reason for the (EDD) to grant unemployment benefits.  

The cost of unemployment insurance has created an industry of “third-party agents” – companies that specialize in helping employers deal with the unemployment insurance administration. These firms represent employers in disputes with former employees over jobless benefits.  

Do your homework! Some companies will contest every unemployment claim when it is better to focus on providing fair, productive and equitable workplaces with sound business practices leading to less turnover, less claims and savings to the bottom line.

For more information about unemployment claims or any HR matter, contact:  Julie Wootton at San Diego Human Resources Consulting, Inc for a free HR Consultation. 7040 Avenida Encinas Suite 104-41 Carlsbad, CA 92011 760-438-8046