The recent changes to North Carolina’s unemployment laws, which went into effect on July 1, 2013, will likely lead to an increase in tax rates for most employers. In addition to the likely tax rate increase, when an employee is granted benefits by DES (Division of Employment Security), a business’s unemployment insurance rate may increase further. As a result, the issue of whether to challenge unemployment benefit applications may take on a larger role for some business owners. In an effort to avoid such increased expenses, employers should be aware of their opportunities to challenge unemployment benefit claims of ineligible employees and – most importantly – how best to prepare for such administrative proceedings.
Key Preparations for Employers
As most North Carolina employers are aware, an employee, generally, is ineligible for benefits if he or she (1) left work voluntarily without good cause attributable to the employer (e.g., voluntary resignation, failure to report to work, walking off the job); or (2) committed misconduct which led to his or her termination (e.g., violating an integral employer policy, theft in connection with work, falsifying work records or documents, insubordination). These are the two most likely situations upon which an employee may be denied benefits. Often, however, employers tend to focus on performance-related matters at a benefits hearing. Unfortunately, performance issues most often are irrelevant with respect to an employee’s eligibility for unemployment benefits under the law.
In order to more successfully challenge a benefits claim, employers should consider the following key preparations:
- Determine if challenging an employee’s application is an efficient use of the business’ time and energy to challenge the benefits application. In all instances, an employer is obligated to complete the initial Request for Separation Information From Employer – Form NCUI-500AB; however, the amount of time, effort and detail may vary depending on the desire to challenge the application.
- Determine if an in-person hearing would be more effective than a telephone hearing – consider that sitting in the same room with an employee or witness or reviewing documents with the hearing officer in person may be a more effective way of relaying information in the event that facts or documents are confusing.
- Gather all documentation related to the employee’s voluntary resignation, if applicable, such as a letter of resignation, emails from the employee indicating his or her intent to resign or, possibly, relevant attendance records.
- Gather all documentation related to the employee’s instance(s) of misconduct, if applicable, such as the employer’s conduct policy violated by the employee, all corrective counseling or disciplinary action forms regarding the employee’s misconduct, and all termination documentation.
- Provide a detailed narrative of the employee’s separation from employment on the initial Request for Separation Information From Employer (see Question 17 on the current form) and attach all relevant documentation you have gathered. If the documentation is lengthy, highlight or underline any relevant portions for easy reference by DES. Remember, do not focus on performance-related matters – instead, focus on voluntary resignation or conduct-related issues, whichever is relevant.
- Ensure that the employer’s representative and/or witness(es) attending the benefit hearing (1) are aware of and has reviewed all relevant information and documentation; (2) have copies (in triplicate) of all documentation at the hearing (if in-person) regardless of whether the documentation has been provided to DES or the employee by mail at an earlier date and time; and (3) are prepared to testify and answer questions effectively to matters focused on the employee’s voluntary resignation or misconduct. If the hearing is conducted via telephone, make sure that the employee and DES are served with all of the documentation on which you may rely or reference during the hearing – consider sending the documentation both by Federal Express, UPS or Certified Mail (e.g., a traceable method) and by regular mail.
- At the close of the hearing, request that all of the documentation that you provide be made a “part of the record” such that DES will consider and rely upon all information in making its determination.