To Fight Unemployment Claims – or Not

As an owner (or HR manager) of a small – or even large – Los Angeles or Orange County business, one of your main focuses probably is on keeping unemployment claims down. After all, you don’t want to have to pay an unemployment claim if it’s fraudulent:

  • The more unemployment claims you pay, the higher your unemployment tax rate. (Your rate depends on how many ex-employees collect unemployment after leaving your company.)
  • However, paying the claim –even if it’s “iffy” — could mean your company steers clear of a discrimination or wrongful discharge lawsuit, therefore saving time and money dealing with the suit. What’s more, paying unemployment also could raise your chances of winning a discrimination/wrongful discharge suit.

Los Angeles employer of record

So it’s a sticky wicket: pay every claim in order in order to possibly avoid a lawsuit but risk the chance you potentially increase your unemployment taxes considerably.

There are some very good reasons not to contest any claim. Here are two:

  • Let someone go – for whatever reason – and he likely is to be very angry. If you fired him, there was a good reason you didn’t want him around anymore. Do you really want to spend time – and lots of money – dealing with him again? Probably not.
  • What’s more, as Talent Management and HR (EREMedia.com) put it recently, “it’s your fault if someone is fired,” because there almost always are indications that a candidate will be trouble. So if you hired the individual anyway, you need to take some responsibility for it.

Does this just stick in your craw? After all, not contesting an unemployment claim when someone was fired for legitimate misconduct!? What planet are we living on!?

And we understand. Truly. Too many people file fraudulent unemployment claims as it is, so to not contest it feels as if we’re condoning such behavior!

When should you contest an unemployment claim?

When you fired an employee for legitimate misconduct and you have solid documentation. After all, no one filing an illegitimate claim is going to admit to doing so. So you need solid proof, which includes documentation and or witnesses (and remember to create the documentation before you fire the employee).

Let us take on the burden of unemployment insurance.

Helpmates can become your workers’ employer of record (EOR), thus becoming your now-employees’ legal employer. We therefore take on all related employer responsibilities, including unemployment insurance claims. We would handle – and pay for – all unemployment insurance claims. In other words, if we feel a claim is fraudulent, we make the decision whether to contest it and reap – for good or bad – all the consequences of the ruling.

For more information on our EOR services, contact the Helpmates office nearest you and ask to speak to the branch manager.

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