How to Better Defend Unemployment
Claims
Rebecca L. Dobbs, Esq. –
Attorney,SmithAmundsen LLC
Gregory J. Ramel, Esq. – First Deputy
Legal Counsel, IDES
August 6, 2012
Unemployment Jurisdiction

IDES has jurisdiction to determine and assess
employer contribution rates and to enforce its
determinations and assessments through its
internal review and hearing process
 IDES also has jurisdiction over benefit
payments and disbursement – complete
authority over determining benefit
entitlements, subject only to judicial review by
the appropriate circuit court following the
exhaustion of all administrative remedies
Employer Interests in Enforcing UI
Laws

Employer contribution rates based in most part
upon company’s experience rating, benefit
charges and wages paid.
 Employer’s financial interest to challenge
claimants when appropriate to disqualify a
former employee from benefits
 Preventing unwarranted claims keeps an
employer’s benefit charges and rates low
which helps keep the lowest contribution rate
possible, and the lowest quarterly payments
as possible.
Employer Funding

Unemployment insurance compensation fund
is largely made up of a payroll tax paid by
employers on a quarterly basis
 No payroll deductions are made from a
worker’s wages to subsidize the
unemployment insurance compensation fund
 Amount an employer pays depends on:


Size of employer’s workforce & number of former
workers receiving unemployment benefits
Employer’s experience rating
Employer Funding (cont.)
Rates
Maximum Minimum
Taxable
Wage Base
2011
8.40%
0.70%
$12,740
2010
7.25%
0.65%
$12,520
2009
6.80%
0.60%
$12,300
Thanks to IL Chamber and others…

(SB 72/PA 97-621):
Section 235 (820 ILCS 405/235):
Sets the taxable wage base as follows:
Calendar Year
Taxable Wage Base
2012
$13,560
2013
$12,900
2014-2019
$12,960
Section 1506.1 (820 ILCS 405/1506.1):
Sets an employer’s minimum rate at zero for calendar years 2012-2019.
Max rates begin in 2012 at 9.45% (including fund building rate).
Section 1506.3(820 ILCS 405/1506.3):
Sets the fund building rate at 0.55% for each calendar year when on
October 31st of the prior calendar year, there are outstanding bonds under
the UI Trust Fund Finance Act.
Stages to Monitor
Unemployment Rate/Claims
Initial Claims by individual employees
 Quarterly Charge Benefit Statements
 Annual Rate Notice


Quarterly Benefit Charge Statement

Annual Rate Notice
Employee Eligibility
Sufficient Base Period Wages in
Covered Employment
 Registration and Availability for Work
 Reasonable and Diligent Search for
Work
 Periodic Certification of Benefits Claimed


Disqualification of Otherwise Eligible
Employee
Complete or Partial Disqualification

Partial Disqualification



Arises primarily from income earned by a claimant
during receipt of benefits
If a claimant earns more than 50% of his “weekly
benefit amount,” the amount of benefits he or she is
eligible for decreases correspondingly
Complete Disqualification

If a claimant earns the same or more from other
“employment,” then he or she is disqualified from
receiving benefits for that week.
Discharge for Misconduct


Termination for misconduct renders an employee
ineligible for benefits until he or she is re-employed
earning at least the same weekly benefit amount in
each of at least 4 weeks
Misconduct – deliberate and willful violation of a
reasonable work rule or policy of the employing unit,
governing the individual’s behavior in the performance
of his work, provided such violation has harmed the
employing unit or other employees or has been
repeated by the individual despite a warning or other
explicit instruction from the employing unit
Determining Factors for
“Misconduct”



Must be related to the employment having a harmful
effect on the employer or other employees
Must be deliberate, willful, or with disregard for the
employer’s interests
Actions which demonstrate an employee’s willful or
wanton disregard of an employer’s interests revealed
by deliberate violations or disregard of standards of
behavior which the employer has the right to expect of
its employees or in carelessness or negligence of such
degree or recurrence as to manifest equal culpability
Attendance as Misconduct

Attendance Problems


Usually involve violation of abuse of employer’s
attendance policies
Example 1:

Man receives a call at work from his wife telling him
she is divorcing him. Man immediately clocks out
so he can go home to talk to his wife. Supervisor
sees him clock out and asks him why he’s leaving.
Man refuses to tell his boss anything. The next day
he is fired.


Misconduct?
Yes – but only because he refused to tell his
supervisor why he was leaving.
Attendance as Misconduct (Cont.)

Example 2:


Employee gets arrested, locked up and can’t make
bail. He can only make collect calls. He sends a
letter to his employer explaining his situation and
receives no response. He has no family or friends
to follow up with his employer. He is locked up for
9 months until his trial at which he is acquitted. He
then contacts his employer who tells him he was
replaced because he was absent from work without
notice for 5 consecutive days. Misconduct?
No – The employee tried whatever he could to
notify his employer.
Insubordination, Harmful Attitude Lack of
Professionalism as Misconduct

An employee may argue with a superior so
long as it is not disparaging or disruptive


Critical component is whether there is intentional
disregard of an employer’s interests
Abusive language is generally considered
insubordination and misconduct

Words are considered insubordinate and abusive
where they violated the behavior standards an
employer has a right to expect from its employees
Dishonesty, Theft or Felony
Conviction as Misconduct


Benefits prohibited where an employee is terminated
because of the commission of a felony or theft
committed in connection with work.
Disqualification for termination due to a felony or theft



Employer must have no involvement or responsibility
Employer must have notified the IDES of the possibility of a
felony or theft within 10 days following the employee’s next
claim for benefits
Employee must either:



1) admit to the felony to a representative of the IDES Director
2) Sign a written admission of the felony or theft to be delivered
to the IDES; or
3) Be convicted of, or given an order of supervision by a court,
the felony act or theft
Job Performance Problems as
Misconduct


Generally: Incompetence = unemployment
If job performance fails to improve after work
performance assistance or training, may
change to a situation of misconduct
 The greater the potential risk to the employer
as the result of poor performance, the more
likely an ultimate termination may be found to
be misconduct.
 And, the employee must be well aware of the
potential harm to be caused the employer if
poor performance continues.
Voluntary Termination or
Resignation
Voluntary Termination will disqualify a
former employee from benefit eligibility.
 However… exceptions to this rule…

Voluntary Termination - Exceptions







When worker is deemed physically unable to perform work by a
licensed and practicing physician
When worker left work for that of another employer and works for
at least 2 weeks for the new employer
Where a worker refuses to accept a transfer to other work offered
by his employer under terms of a CBA or employer plan when
such work would result in the separation of another worker
currently performing this work
Where sole reason for leaving work was sexual harassment of
the worker
Where work accepted after worker’s separation would be deemed
unsuitable for him
Where the worker leaves because he/she is a victim of domestic
violence
Expansion of this exception continues to develop…
Factors to Determine “Voluntary”

Employee has chosen to leave the
employment for reason not attributable to
the employer
“Attributable to the employer” does not
require “fault”
 It requires more of an “absence of fault” on
the part of the employee

Factors to Determine “Voluntary”
(Cont.)

Example 1:



Employer is reorganizing – results in changes to
the duties and responsibilities of a particular
manager. Manager resigns. Resignation
attributable to employer?
Yes – changes will most likely be considered
substantial changes to the “working agreement”
understood and expected by the employee
Must be a substantial and unilateral
modification to the employee’s working
conditions, duties, responsibilities of
reasonable expectations associated with the
job position.
Factors to Determine “Voluntary”
(Cont.)

Example 2:
Employee takes 2 week leave of absence
and asks for extension which is denied.
Does her failure to return to work at end of 2
weeks result in voluntary termination?
 Yes – Employer is within its rights to deny
an extended leave of absence. Employee’s
decision to not return to work was a
voluntary decision

Voluntary Resignation or
Constructive Discharge?
Constructive Discharge = “forced to quit”
 Employee’s working conditions are so
intolerable that the employee is forced to
resign voluntarily
 Test: what a reasonable person would do
under the circumstances


i.e, Were the newly (intentionally) imposed
conditions so difficult or unpleasant that a
reasonable person in the employee’s shoes would
have felt compelled to resign?
Acceleration of Voluntary
Termination Date

Example:
Employee provides 2-week notice of her
resignation. Employer tells her to clean out
her desk by the end of the day. Is she
terminated?
 Yes – employee was willing to work 2 more
weeks

Constructive Quit
Results from employee’s action that
results in his or her inability or
unwillingness to continue working, and
for a reason not attributable to the
employer
 Emphasis is often given to the intent of
the employee

Refusal of Suitable Work
Where an individual refuses suitable
work, they become ineligible for benefits
 Refusal of work arises only after a
discharge or separation

“Suitable Work”
Means suitable to a person’s job skills or
training, along with comparable pay.
 Cannot be refused simply because it is
not within employee’s “preference.”
 An offer of work must be definite and
genuine, and the terms or conditions for
accepting the employment must be
reasonable.

Acceptable Reasons for Rejecting
Suitable Work
Significantly lower wages or skills
 Physical obstacles
 Safety or potential health hazards; and
 Other “good cause”


Mechanics of an Individual Claim for UI
Benefits
General Process
Initiated by employee as claimant
 IDES contacts employer
 Employer may protest claim
 IDES calculates benefits, if any

Challenging A Claim

Protest filed by an employer triggers
employer’s right to receive an Adjudicator’s
Determination as to the claimant’s eligibility for
benefits
 Where protest is timely filed and includes all
necessary information, an employer is entitled
to party status in further claim proceedings
and has all appeal rights arising from such
proceedings and resulting determinations.
 IDES can challenge claim

Typically arises from finding of ineligibility during
calculation of benefits phase

Appeal of Decision or Determination
General Process
Claims Adjudicator
 To Referee
 To IDES Board of Review
 To Circuit Court

Most Common Litigation Issues
Not amount of benefits to which a
claimant is entitled but whether
termination disqualifies an employee
from benefits
 Ability to make successful protests
requires a strong familiarity with all the
different grounds for disqualification

Evidentiary Rules before IDES
Formal rules of evidence to not apply to
UI claim hearings and proceedings
 Matters of witness credibility are typically
left to Adjudicator or Referee
 Even though certain documents or
information might be admitted into
record, they may be given little or no
“weight.”

Exhausting Administrative
Remedies

Illinois Administrative Review Act governs the
manner in which a party can seek judicial
review
 Requires an exhaustion of all administrative
remedies or administrative appeal rights
 If a party has not sought relief from all appeal
rights allowed by the agency, the party is
precluded from seeking judicial review

Questions???
SmithAmundsen LLC
Labor & Employment Group
www.salawus.com