Discharging an employee is a difficult decision. No matter the size or type of organization involved, the issue(s) involved in making the decision to discharge is serious. As a result of the time and thought that go into a discharge, many employers assume that all discharges are disqualifying from collecting unemployment benefits.

Unfortunately, as with all unemployment issues, it’s just not that easy. In each state, to be disqualified for unemployment benefits, an employee must be separated through no fault of their own. In terms of a discharge, this is defined as misconduct.

Generally, misconduct is an “intentional and willful disregard of the employer’s interests.” To prove intent state agencies are looking for the employer to show that the former employee had the ability to control the behavior and in most cases had received warnings that their behavior could lead to a discharge.

What is most frustrating for many employers is when they have warned a former employee and that person receives benefits because the state has determined that the employee was discharged due to poor performance. When an employee is simply unable to do the job that you have hired them to do this is not misconduct and is therefore not disqualifying in terms of unemployment benefits.

If the employee has the skills, physical and mental abilities to do the job and has shown ability to perform in the past but now chooses not to, that is usually misconduct resulting in a denial of benefits. Employers will need to focus on what the employee specifically failed to do that led to the issue.

By focusing on the behavior rather than the outcome, employers can avoid poor performance rulings in unemployment claims.

For example:

Bob has been a car salesman at XYZ Motors for two years. There is a sales quota of 6 cars per month. Bob did not make quota for two months. Bob had been warned that his refusal to greet customers and to take them on test drives was against policy and could lead to discharge. He was warned during his last two months to follow policy given at hire and after not making quota the 2nd month was discharged.

An employer, when asked by the state agency, could indicate that Bob was discharged for poor performance or failure to make quota. Both of these terms are indicators to state agencies to grant benefits.

What Bob was actually discharged for was the failure to follow policy regarding greeting customers and test-drives. Had he followed that policy as he had previously, he likely would have made quota.

There are occasions in which an employee is simply not suited to their position. They never demonstrated full capability; it will likely not be misconduct and benefits will be allowed. If an employee is unable to do the job in 30, 60 or 90 days, they will not be able to do it if given even longer.

For purposes of protecting the employer’s unemployment account from charges, CCC recommends a 90-day probationary period. This is because most states use a Base Year to determine claim charging. Employees discharged for any reason during the first 90 day period will generally not result in any unemployment claim charges to the employer’s unemployment account. Poor performers should be weeded out during or at the end of their first 90-days of employment to limit an employer’s unemployment liability on a claim.

Guidelines:
▪ Avoid: poor performance, inability to meet standards, or inefficiency if discharged for a willful or deliberate violation of rules/standards
▪ Focus on the behavior that caused the “poor performance” in determining whether or not a discharge is for misconduct
▪ Provide complete details with documentation


Contact CCC to see how we can save your organization time and money.
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