More Employers Fighting Unemployment Benefits
In Record Numbers, Employers Move to Block Unemployment Payouts

Waye Vroman
Economist, Urban Institute
Thursday, February 12, 2009 1:00 PM

It's hard enough to lose a job. But for a growing proportion of U.S. workers, the troubles really set in when they apply for unemployment benefits.

More than a quarter of people applying for such claims have their rights to the benefit challenged as employers increasingly act to block payouts to former workers. The proportion of claims disputed by former employers and state agencies has reached record levels in recent years, according to the Labor Department numbers tallied by the Urban Institute.

Wayne Vroman, economist at the Urban Institute, which investigates and analyzes social and economic problems in the U.S., was online Thursday, Feb. 12, at 1 p.m. ET to discuss the issue.

A transcript follows.


Waye Vroman: I am here to talk about UI applications and the recipt of benefits.


Rockville, Md.: My company has hired a subcontractor to provide our secretarial services. This sub laid off someone who used to be my secretary. They're now claiming that she resigned. She's trying to work with the unemployment folks about this -- we have an e-mail from one of our folks that states that we can consolidate two support positions into one and that Susie is persuing other options. Susie never resigned. Those of us familiar with the situation are not involved in the subcontractor's contract and my company can't tell the sub how to do their business. Any advice?

Waye Vroman: When a person files for benefits there is a section of the form that asks about the reason for the job separation. The claimant and the employer get to state their position. In this case if the person did not resign stating that to the agency is appropriate. If in gathering information about the separation the employer provides a different explanation the agency then has to "adjudicate" the issue. A staff person finds facts and makes a determination in light of the facts and applicable law and regulations. Their decision has to be made within two weeks of the application.

I think the important point here is that she did not resign.


Columbia, Md.: Thanks for taking my question. I understand that if you quit voluntarily, then you're not qualified for unemployment. But what if you're forced to quit? My company won't fire us, but the manager is making life difficult. Is there a situation where you can quit voluntarily but still be eligible for unemployment benefits?

Waye Vroman: One can quit and be eligible under certain circumstances. If the quit is related to work the person may be eligible. In particular, if the employer has changed the conditions of employment to make work more burdensome the UI agency should be informed of this and it can make a determination about the merit of the person's situation.

The application for benefits has a section that asks the reason for the job separation. The circumstances described in your situation should be stated in this part of the application for benefits.


Fairfax, Va.: I submitted my application for unemployment benefits here in Virginia in October; my former employer challenged my application, and after an initial telephonic hearing I was denied benefits. The appeals hearing (also by telephone, and recorded) was not held until this past Monday because of the large backlog of cases. It appears the sheer number of cases and challenges are hurting the economy more than in past recessions, as people without unemployment benefits simply stop spending. Do you have any data as to the number of UC challenges nationwide? Thanks.

Waye Vroman: In 2007 there were more than 4 million disputed application where the claimant and the employer disagreed about the circumstances of the job separation. Disputes are common and the UI agency has to decide on the merits or each indivudual disputed claim.

The UI program in the U.S. has many disputes over eligibility for benefits. Your appeal should be heard by VEC. The backlog problem is a national problem because of the increase in unemployment. Eventually VEC will get to your case.


Queens, N.Y.: Can you work part-time for an hourly wage (1099) and still receive unemployment?

Waye Vroman: States have rules on how much one can work and collect beneifts. Typically the amount of allowable earnings is low. I do not know New York's limit.


Alexandria, Va.: I have to file for unemployment, what can I do to make sure my employer doesn't fight it? What precautions should I take?

Waye Vroman: Beyond being as accurate as possible in your application I do not know of other defensive actions you can take.


Anonymous: Mr Vroman,

To your knowledge, are there agencies or individuals in the business of representing employees filing for unemployment benefits when the employer challenge their claims?

Waye Vroman: There is no claimant's bar. Representation by a lawyer is rare for workers. Legal services sometimes will help in UI applications.


Part-time: : I can't seem to locate it on Maryland's DOL Web site, so could you tell me if unemployment benefits are extended to part-time employees? Also, if laid off, where would I file? I work in Virginia but live in Maryland.

Waye Vroman: Maryland passed a part-time UI provision earlier this year. I am not familiar with the details.


Richmond, Va.: Can you tell us about the WARN Act? Reading about it in the Qimonda case makes me think I didn't get that when I was laid off years ago, I didn't know I had a right to 60 days severence pay.

Waye Vroman: I am not familiar with the details of WARN.


Virginia: Do I file for UI in the city/county where I work or where I live?

Waye Vroman: Most (all?) applications in Virginia are by phone or on-line. The phone numbers should be available from information in the phone system. There often are long waits because of the high volume of applications.

_______________________ WARN Act


Virginia: My hours were recently cut in half. It now looks like I may loose my job altogether. If I apply for benefits, would I get benefits on my full-time salary (100K) or on my half time salary of 50K. As you can imagine, living on 1/2 your salary is tricky, but living on 1/2 of my benefits as well would be near impossible. What can I do to ensure I am insured for my full-time pay?

Waye Vroman: The benefit determination for the weekly benefit is based on the high quarter (or two quarters) of base period earnings in most states. If you were moved down to half time pay miway in your base period your weekly benefit will be based on your earlier full time earnings regardless of recent earnings. The base period is the earliest four of the past five fully completed calendar quarters, e.g., for a claim filed today it would extend from October 1, 2008 to Sept 30, 2008.


Los Angeles, Calif.: If I file for unemployment compensation and then discover my employer never paid into the unemployment compensation fund and my employment is not documented, what do I do then?

Waye Vroman: File for benefits. The state agency will need to make a determination that you were an employee. A favorable determination will confer eligibility and a penalty for the employer for misclassification (you were an employee not an independent contractor).


Richmond, Va.: I was laid off once and the employers lied and said I was fired for misconduct. I got on my state's Web site where they post records of hearings. I wrote down the requirements to win and read for key phrases in the cases that won. I stressed that they had NO PROOF of misconduct. And the hearing the clerk asked them for documentation of my misconduct and they had none. The onus is on them to prove what they're arguing. If they can't the employee wins.

Waye Vroman: This is important: the burden of proof is on the employer in misconduct cases. If the employer cannot provide documentation of earlier personell actions (warning, placed on notice) the employer usually loses in the hearing.


Washington, D.C.: I am technically a "partner" in my business, and am self-employed. However, unlike other "partners," I have no guaranteed tenure, no particular role in management of the business, make no capital contributions, and accept 100 percent direction and control from senior management (our partnership is structurally unequal). Also, my compensation is far below that of senior managing partners.

If I am let go and it isn't for cause, am I eligible for D.C. UI?

Waye Vroman: If terminated you should file for UI. The agency will have to make a status determination, i.e., if you are an employee or not. If you are an employee (regardless of what your "partners" say) you may be eligible for benefits.


Reston, Va.: How does the process work in Virginia? If I file an unemployment claim, will someone in the state call the HR department for the firm I worked at? What questions are asked? Does the HR department typically route the call to the employee's manager? Does the state require the company to fax them paperwork? Is the process standardized?

Waye Vroman: The claimant's application includes a description of the circumstances of the job separation. The information is sent to the employer on a standardized form. If the descriptionf by the employer and the worker differ, the state agency has to decide how the separation took place and if the separation was disqualifying.

The agency works under tight deadlines and the employer must provide a response quickly, otherwise the agency makes a decision without input from the employer.

What happins inside the company is a matter of company policy and probably differs from firm to firm.

_______________________ This concludes our discussion with Wayne Vroman. Thank you for joining in.


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