Unemployment Benefits

unemployment benefits
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Managing unemployment benefits can be a very important tool for employers who are looking to manage their employment costs. Ohio employers who have at least one employee who has worked for them for 20 weeks are required to pay an unemployment tax. That tax is paid on the first $9,000 of every employee’s wages. The tax rate varies from employer to employer based on the number of claims that have been paid to the company’s ex-employees compared to the amount of tax paid in. Much like insurance, the greater number of claims that are paid and are attributable to an employer, the higher that employer’s potential unemployment taxes will be. An employer is required to file quarterly tax reports and submit quarterly payments.

Any employee who has worked at least 20 weeks in the applicable base period and has an average work wage of $247 during that base period is eligible for unemployment benefits. The regular base period in Ohio is the first four of the last five completed calendar quarters. The four calendar quarters run as follows – first quarter Jan. 1 through March 31, second quarter April 1 through June 30, third quarter July 1 through Sept. 30, and fourth quarter Oct. 1 through Dec. 31. If, for example, a person is terminated May 1, 2017, the last five completed calendar quarters would be Jan. 1, 2016 through March 31, 2017. The first four quarters of that five-quarter period would be Jan. 1, 2016 through Dec. 31, 2016, which would be considered the regular base period associated with that employee’s claim for benefits. To be eligible for unemployment benefits, the employee would have therefore had to work at least 20 weeks during that base period earning at least $247 per week.

The purpose of unemployment benefits is to compensate individuals who have lost their job through no fault of their own. As such, someone who is laid off for lack of work is going to be eligible for benefits. In a situation where an employee is terminated for performance problems or disciplinary reasons, the employee’s entitlement to unemployment benefits will rest on whether the employee was discharged for just cause. Courts have held that just cause exists if a person of ordinary intelligence would conclude that the circumstances justify terminating the employment of the employee.

Generally, if an employee is on notice that their conduct violates an applicable company rule and the company has followed its discipline policy, an employee will not be entitled to unemployment benefits. In order for an employer to prevail on unemployment claims made by terminated employees, it is important that the company document not only what its expectations are of the employees, but also the conduct demonstrating that the employee is failing to meet those expectations. If an employer is going to rely on a violation of company rule to establish just cause of terminating an employee, the employer is going to want to document that the rule was put in writing and communicated to the employee. Oft en, this is done through having the employee sign an acknowledgement that they have received the employee handbook or policy setting forth the basis for discipline. Likewise, documenting the violation of the rule is similarly important. Without this documentation, it becomes much more difficult for employers to establish that they had just cause for terminating an employee.

In order to continue to receive benefits, the employee has to demonstrate that he or she is actively seeking employment and is available for work. If an employee is terminated as a result of being unable to work due to illness, that would generally not be considered a just cause of termination for purpose of unemployment benefits. The analysis is that the employee cannot help the fact that they are ill, therefore they have lost their job through no fault of their own. That being said, however, they are not going to be eligible for unemployment benefits until a doctor has cleared them to be able to return to work. You are only entitled to unemployment benefits if you are able to seek employment elsewhere.

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Generally, an employee who resigns is not entitled to unemployment benefits because it was that employee’s voluntary conduct that led to their unemployment. The exception to this would be if the employee can demonstrate that they quit their job for just cause. Just cause in those circumstances would generally involve the employee having to demonstrate that they were put in an untenable position that would make it unreasonable for them to continue working. Simply being unhappy in your job would not meet this burden. You would have to show that the employer was engaging in some type of improper or illegal conduct that put the employee’s well-being at risk.

Understanding how unemployment works can help an employer manage its own costs associated with unemployment taxes. Taking the steps to document disciplinary terminations will help keep down the amount of unemployment benefits attributable to a company which will in turn help keep down the unemployment taxes they are obligated to pay. Richard N. Selby II 

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