Controlling Unemployment Taxes

Presented by Unemployment Insurance Services

www.unemployment-services.com

Understanding the System

Origins Created by FDR as part of the New Deal Created to provide temporary relief to individuals

unemployed through no fault of their own Completely funded by the employers of the state

through payroll taxes or reimbursable payments It is not a welfare or entitlement program

How Does the System Work

The claimant has a twelve month period in which to claim up to 20 weeks of benefits in MO and 26 weeks in KS.

The liability and the interested employers are determined by the base period.

The base period is the determined by excluding the current quarter and the most recently completed quarter.

The previous four quarters make up the base period.

Benefits & Determinations The claimant can collect a maximum of 20-26 weeks of

benefits during the life of their claim. Maximum liability is $6,400 in MO and $12,194 in KS In cases of resignations, the claimant has the burden to

show they resigned for good cause attributable to the employer.

In discharges, the employer has the burden of showing misconduct

Misconduct is defined as a “willful or deliberate violation of duty or responsibility reasonably owed the employer”

How does the Employer get Charged Each employer maintains a UI account In Missouri in lieu of a tax rate, the employer agrees to

“reimburse” the trust fund dollar for dollar to former employees who collect UI benefits.

In Kansas, the employer is charged a tax rate on the total annual payroll based on a ratio of annual benefit charges to the two year average payroll. This is referred to as being governmental rated.

Substantial savings can be achieved through proper claim management.

Changes to Law in Kansas HB 2105 – Effective 7/1/13 Eliminated severance pay exemption Narrow the definition of “good cause” when

an employee resigns Greatly broadened “misconduct” in

employer’s favor• Changes in attendance• Changes in drug testing• Changes in proving misconduct for performance issues

Attendance in Kansas No longer necessary to have a written policy

– Only must show that an expectation exists Employers no longer must give the employee

a written warning to prove misconduct Burden is placed on the claimant to show

“good cause” for being absent If claimant is alleging health as the “good

cause” they must provide medical proof.

Drug testing in Kansas

Standards loosened to now include “reasonable suspicion” as opposed to “probable cause”

Allows for disqualifications in a “zero tolerance policy”

Adds test tampering as possible misconduct

Elevates a drug or alcohol offense to gross misconduct

Missouri Philosophical Changes Much more difficult environment for

employers Heavily influenced by current political climate Labor friendly appeal referees Emphasis is on proving that the actions were

“willful and/or deliberate” and that the claimant’s actions were intentional

Very difficult to prove misconduct in “isolated instances”

“He with the best story…”

Protesting the UI claim Identify the issue

Resignation or Discharge Burden of proof

Use the letter of protest as a road map Support the protest

Policies Written Warnings Witness Statements/other documentation Misconduct is the goal, not justification of discharge

“I Quit my job because..”

The employee has the burden of proving good cause that was attributable to the employer

Claimant must show that they made every attempt to preserve the employment

Good cause can be one of the following:• Hostile work environment• Discrimination or harassment• Change in the hiring agreement

Good cause is not:• General dissatisfaction with the employment• Disagreement over disciplinary actions• Transfer of work site or change in job description if notified

at time of hire that employer reserves the right to make adjustments

Things to Remember about Resignations Get a letter of resignation whenever possible Allow the employee to fulfill their notice period Always document issues that might be in dispute If you can not obtain a written resignation, send

the claimant a certified letter “Constructive discharges” are NOT resignations

We accepted his resignation and told him to stay home If you let him go early, the claimant will be

eligible for the difference between the last day of their notice period and their actual last date they worked

Let the employee complete their notice period The employee can be re-assigned The employee is obligated to follow your policies

during this period Do not stop the documentation process

Difatta-Wheaton v. Dolphin Capital Missouri Supreme Court decision Holds that an employee who is released due

to their inability to return to work from health related issues will be considered discharges.

Employers will be forced to prove misconduct connected to the employment.

Hold the job for as long as possible

Attendance in Kansas Written attendance policy is no longer

required (but strongly suggested) Employer only must show that they had a

known expectation and was consistently applied

Written warnings are no longer required. Proof of reprimand will reinforce position

Claimant must show that if the issues were health related they were under the care of a doctor

Attendance in Missouri

The statute: Infractions of an employer’s attendance policy can be misconduct, if the employer can show that the claimant had instances of attendance that were avoidable and/or improperly reported. The claimant needs to have knowledge of a written attendance policy Written warnings enhance the ability to prove misconduct Emphasis will be placed on the FINAL instance of absenteeism or

tardiness If final incident is not disqualifying, the state will seek a pattern of

avoidable and/or improperly reported instances Extremely important to document reasons for absences or tardiness.

Include time of call to establish if instance was properly reported. One instance of failure to properly report the incident or if the

instance was avoidable, misconduct can be established.

How to beat the Attendance Statute in Missouri

Do not focus on number of absences Get supervisors to document reasons and times of

the instances Reprimand the employee for failure to properly

report the incident of absenteeism or tardiness “Failure to report” removes the good cause issue By focusing on reporting issues, you focus on a

black and white issue

Drug Testing Misconduct can be the use or impairment caused by alcoholic

beverage or a non-prescribed controlled substance Has to be conducted by a certified lab

Can be urine, blood, saliva, or breath test Must show a chain of custody approved by certification Sample must be collected by a licensed health care professional

The test can be conducted if there is probable cause Can be requested or required if the employee is notified at the

time of hire that it is a condition of employment Random testing, if mandated by law Post-accident testing Testing required by a Employee Assistance Program

Defining Misconduct in Today’s Environment Emphasis is on proving “intent” No longer enough to show a violation of

policy Documentation must reflect a “intentional or

deliberate disregard for employer’s interests Buzzwords are “intentionally” and/or “willfully”

Documenting Other Employee Deficiencies Select issues that you can prove

Show that the claimant was aware of his responsibility

The claimant has shown the ability to perform the task in the past

Be specific: What was expected, what they failed to do correctly and how they can improve

Whenever possible use your policies or job descriptions

Protesting issues of performance Show a progression of discipline/coaching The employee was aware of their responsibility The employee has performed his tasks correctly and

timely in the past The protest is not a justification of discharge Avoid the implication that the employee was

“unable” to perform the work If possible be patient. Must prove the acts were

intentional and willful

The Effects of a Good Written Warning Provides detail for the examiner The claimant was aware of company

expectation The claimant was receiving clear instructions Most importantly, shows that the claimant

had control over the events Helps to establish “intent” Gives the employee the opportunity to

improve upon their deficiencies

Issues of “Gross Misconduct”

Gross misconduct is defined as behavior or actions that that warrant immediate discharge

Includes insubordination, theft, workplace violence, and harassment

Documentation is crucial One chance to prove misconduct Witness statements First hand information essential

“You can’t handle the truth!”

The unemployment hearing process Conducted by an Unemployment Law Judge Both parties have the right to confront each other First hand testimony is absolutely essential Documentation is required to support testimony Rules of testimony and evidence are enforced

Prepare for the hearing Determine the issue Decide who should testify Make a timeline Discuss the hearing beforehand