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Understanding unemployment benefits

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Former employees filing for unemployment compensation is common. It is also common for employers to object to Employment Security paying a terminated employee unemployment compensation.

This column reviews the standards Employment Security uses to decide if a former employee is entitled to unemployment compensation. It also addresses circumstances where it could be in the employer’s best interest not to object to benefits.

As most people are aware, Washington state provides for unemployment benefits to some discharged workers. The state provides the benefits, because the Legislature found “the economic insecurity due to unemployment a serious menace to the health, morals, and welfare of the people of this state.”

The Legislature then exercised its police powers to compel “the setting aside of unemployment reserves to be used for the benefit of persons unemployed through no fault of their own,” and decreed that the state’s unemployment benefit laws be “liberally construed for the purpose of reducing involuntary unemployment and the suffering caused thereby …”

But not every unemployed person gets unemployment benefits. To be eligible, a person must have 680 hours of covered employment in a base year. And, the person must have been laid off for lack of work or terminated for a reason other than misconduct or gross misconduct. The person must also be physically able to work, available for work, and actively seeking suitable work.

Further, some individuals may not be entitled to unemployment benefits: self-employed workers, church employees, commissioned employees, elected government officials, and some corporate officers. Employees who quit are not usually entitled to unemployment benefits, unless the employee quit for good cause, such as illness, moving for certain family reasons, reduced hours, changed job location, or safety issues at work.

One area where benefit eligibility is often subject to dispute is when the employer believes it justifiably fired an employee for cause. However, a for cause discharge may not amount to misconduct or gross misconduct, and the employee could still be entitled to unemployment benefits.

State law defines misconduct as the willful or wanton disregard of the rights, title, and interests of the employer or a fellow employee, such as insubordination, inexcusable tardiness following warnings, dishonesty related to employment, repeated and inexcusable absences, violating the law or company rules. But, misconduct does not include inefficiency, unsatisfactory conduct, failure to perform, ordinary negligence in isolated instances, or good faith errors in judgment or discretion.

State law defines gross misconduct to mean a criminal act in connection with an individual’s work for which the individual has been convicted in a criminal court, or has admitted committing, or conduct connected with the individual’s work that demonstrates a flagrant and wanton disregard of and for the rights, title, or interest of the employer or a fellow employee.

In certain situations, an employer may want to object to Employment Security’s payment of benefits, believing it fired the employee for misconduct or gross misconduct. Before objecting, however, an employer may want to consider whether there is a potential dispute as to the true reason the employer elected to terminate the employee.

If a dispute exists, the employee could later use the evidence the employer submits to object (e.g. the employer’s written objection or the employer’s testimony at an unemployment hearing) to try and establish employment claims (e.g. unlawful discrimination or retaliation). In general, the evidence submitted to Employment Security is admissible in future legal proceedings; only Employment Security’s findings are generally inadmissible.

When confronted with the opportunity to object to unemployment benefits, an employer may want to consider the potential ramifications of an objection. Sometimes, the ultimate goals of a business may justify withholding comment or objection on unemployment benefits, despite the employer’s belief the termination was justified and based on employee misconduct.

Brian A. Walker represents businesses and individuals in commercial, business, employment, and real estate related litigation and transactions from the Wenatchee office of Ogden Murphy Wallace PLLC.