When Should You Dispute Unemployment Claims?

It’s one of the things you hate most about being a business owner but sometimes it’s unavoidable — letting an employee go. Most of the time, the dust settles, your team regroups, and you move forward.

But occasionally you find yourself questioning an unemployment claim filed by a former employee. While your state’s unemployment office will make the final decision, understanding the law and the circumstances around the layoff will help you know if contesting a claim is the right step.

Employees are eligible for unemployment benefits only if they are out of work through no fault of their own. Translation: It matters how the employee left your company.

Consider the following:

• An employee who was laid off is always eligible for unemployment benefits.
• An employee who was fired is eligible for unemployment if the violations were relatively minor, unintentional, or isolated.
• If you fired an employee for misconduct, he or she is not eligible for benefits.
• Examples of misconduct include: revealing trade secrets, sexual harassment, chronic tardiness or unexcused absences, extreme insubordination, intoxication on the job, and dishonesty.
• An employee who quits is eligible only if the employee resigned for “good cause” — that is, the worker would have suffered some sort of harm or injury by staying.
  

You should contest a claim only if you have grounds to do so — meaning your former employee engaged in serious misconduct or quit without a compelling reason.