Although individual state laws may vary, there are some generalities that can help employers predict whether a terminated employee will qualify for unemployment insurance benefits. There are many situations that could result in exceptions to the norm, and state unemployment agencies have some discretion in handling such exceptions. Typically, benefits are likely to be awarded to an employee who is discharged through "no fault of his or her own," meaning, the employee did not willfully cause the termination.
Voluntary Terminations
- Resignations. Generally, an individual will not qualify for unemployment benefits if he or she voluntarily resigned. However, the circumstances surrounding the resignation will be taken into account, such as whether the employee resigned due to an illegal act of the employer (e.g., discrimination or harassment) or if the individual resigned for good cause (e.g., relocating due to a spouse's employment), which may allow the individual to collect benefits. It is a sound practice for employers to obtain signed letters of voluntary termination from workers who choose to leave. In the absence of a signed letter of resignation, employers should document the resignation details as closely as possible.
- Job abandonment. This is generally considered to be a voluntary termination. As a result, a worker who stops coming to work and violates an employer's call-in and/or attendance policy (with no excusable reason) typically will not get unemployment benefits. An employer may consequently benefit from having a job abandonment policy in place. There are some situations where job abandonment might have a situational exception, such as a medical emergency, and the individual could qualify for unemployment benefits.
Involuntary Terminations
- Termination for cause. Disciplinary terminations are more difficult to predict. The employer's factual and organized records of disciplinary infractions, the specific circumstances that led to the termination, and related policies or procedures that were violated are necessary for the state unemployment office to determine eligibility for unemployment benefits.
- Termination due to an extended medical absence. Circumstances where individuals are terminated under an employer's attendance or similar policies after exhausting job-protected leave for medical reasons may be viewed as outside the employee's control (i.e., not willful) and, therefore, possibly eligible for benefits.
- Termination by the employer after receiving a notice of resignation. In some situations, upon receipt of a notice of resignation from an employee, the employer terminates employment immediately or before the date of the employee's choice. When the employer does not pay the employee through the employee's notice date, this situation is generally considered an involuntary termination, and, as a result, the employee may be able to collect benefits.
- Layoffs. Unemployment benefits are typically available to workers who lose their jobs through no fault of their own for a reason such as a layoff due to lack of work.
Change in Hours or Compensation
- Reduced hours. In many states, an involuntary reduction in an employee's scheduled hours on a long-term basis can qualify the worker for partial unemployment benefits.
- Pay reduction. An involuntary reduction in pay that is significant may trigger eligibility for partial unemployment benefits.
- Furloughs. A furlough is a temporary reduction in hours, including reducing an employee's hours to zero for a period of time, and although a worker can be eligible for unemployment benefits during these times, most states have a waiting period before a worker can collect benefits. As a result, if a furlough is not longer than the waiting period, a worker might not be eligible for benefits. In other states, workers may only be eligible for partial benefits during a furlough.
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