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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.