Questions and Answers

Answer:
Depending on the circumstances involved in the separation from employment, an individual who can show "good cause" for leaving may collect unemployment benefits.


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Answer:
An employer pays state unemployment taxes on each employee's wages up to a set taxable wage base (The limit up to which an employee's wages are taxable for unemployment insurance purposes. The IRS sets the federal limit and each state's limit must be no lower than the federal; however, most of the states have a wage base higher than the current $7,000 federal wage base. Each state sets their wage base annually using different criteria.).

The taxable wage base varies from state to state, and depending on how it is calculated, can be fairly high. For example, the 2001 taxable wage base in the state of Washington of $28,500* is based on the average weekly wage.

Conversely, the taxable wage base in New York is set by law at $8,500. Employers do not pay unemployment taxes on all of an employee's earnings, just a portion. That portion constitutes the employee's taxable wages, and is determined by the state's taxable wage base.

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I have an independent contractors working for me. Must I pay unemployment taxes on their earnings?
Answer:
If an individual can truly be viewed as an independent contractor, no unemployment taxes are paid on their earnings by the employer. However, many employers misclassify employees as independent contractors. The states normally use a variation of one of two tests to determine employment status: the" ABC Test" or the "Common Law Test." In each, the degree of control an employer has over an individual's performance, whether the individual is engaged in her own independently-established business, and the manner in which the individual's hours and pay are set, are factors in determining employment status, among others.

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What happens in an unemployment hearing?
Answer:
An unemployment hearing is usually the final step for both parties to give testimony regarding their cases. Unemployment hearings are informal compared to court of law situations. Each party is placed under oath by the hearing officer, and the testimony is tape recorded. All details surrounding the separation issue must be presented by first-hand witnesses.

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Answer:
Most states require that all covered employers display a poster specifying employee rights to unemployment insurance benefits. Some states also require employers to supply claimants with separation notice forms at the time a separation occurs. This correspondence can be obtained by contacting your local job service office.

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Answer:
If you receive an unfavorable determination with which you do not agree, write an appeal and send it to the state along with any supporting documentation so the state can schedule a hearing. You should first review your case to determine if an appeal is actually warranted. Consider the strength of the case. Do you have any first hand witnesses or supporting documentation? If you do not have the necessary witnesses or documentation, you should consider not pursuing the case to a hearing. In a few states, a request for reconsideration may be submitted in lieu of an appeal. If the decision is still unfavorable you may file an appeal for a hearing.

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Answer:
Many states will disqualify a claimant who does not maintain contact with former employers who are temporary agencies. Other states will consider this matter to be an availability issue. A few states will not consider the issue of maintaining contact to be disqualifying. Temporary agency employers should provide their employees with their policies on procedures for maintaining contact.

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Answer:
In almost all states, unemployment benefits are funded 100 percent by employers through a payroll tax based on their past unemployment experience. An employer with a high rate of turnover usually will pay higher unemployment taxes than an employer who consistently retains its employees.

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Answer:
Each year, the state "looks back" at an employer's previous experience to determine the rate the employer must pay in the upcoming tax year. In "reserve ratio" states, the tax rate is based on an "account balance," the difference between the taxes paid by an employer since it became liable in the state and the benefits charged during the same time period.

The account balance is divided by a payroll factor (usually an average of the three most recent years of taxable payroll) to arrive at a ratio, which is then applied to a table for the tax rate. In "benefit ratio" states, benefit charges for a specific period of time are compared to taxable payroll for the same time period to arrive at the tax rate.

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Answer:
It is every individual's right to file for unemployment benefits and, if eligible, collect. There are ways, however, to make sure that only those individuals who are truly eligible for benefits actually collect. By following a progressive disciplinary plan, documenting situations thoroughly, and responding promptly to notices from the state, you may be able to convince the state to disqualify the individual from benefits.

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Answer:
Individuals who file for unemployment insurance benefits are required to be able, available and actively seeking work during each week benefits are claimed. If an individual has refused suitable work without good cause, they should not be entitled to benefits.

Job refusals should be reported immediately to your local unemployment office if the individual has filed a claim. Most states have strict time limits for reporting the information. If the state finds the work was suitable and the claimant did not have just cause for refusing the work, a disqualification from benefits will be imposed. Some states will also relieve the employer's account of any benefit charges as a result of the refusal.

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Answer:
In order to disqualify a claimant from unemployment benefits on a discharge issue, an employer must prove the claimant's actions constituted willful misconduct. Supplying the state with documented proof that the claimant's actions were in deliberate disregard of the employer's best interest will help disqualify the claimant from benefits. Details concerning the final incident, prior warnings, and a signed company policy are imperative in proving misconduct

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Answer:
Many states have strict time limits concerning claim responses. If an employer fails
to respond to the claim notice with the separation information, the employer may lose all appeal rights, and the determination to award benefits will be based solely on the claimant's statement.
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Answer:
Personnel files on former employees should be kept for a minimum of three years after the date of separation. After three years a former employer is usually no longer in danger of falling into a claimant's base period. However, some states go back much further for tax-related issues. Employers should check their state regulations for the requirement concerning record retention.

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Answer:

In many states, an employer who falls within a claimant's base period will receive a notice when an individual files a claim for benefits, whether or not it was the last separating employer. This can go back almost two years. By responding to the claim notice, an employer may receive relief of benefit charges if the claimant's separation from its employ was not for good cause or for reasons constituting misconduct.

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