Receiving an unemployment claim for an active employee may raise a red flag. Is this legitimate? Has their identity been compromised? While some of these claims may be fraudulent, it is important to remember that anyone can file for benefits, and certain circumstances allow active employees to collect benefits.
By reviewing key factors that may have caused the active employee to file and communicating with them about the receipt of an unemployment claim, you can determine if the claim is legitimate and take appropriate actions regardless of what you learn.
Separation notices provide former employees with information on their right to file for unemployment after a position.
Important Considerations
When you receive a claim for an active employee, your first reaction may be to report this claim as an identity theft, or fraud, claim. However, before you report this as a fraud claim, it is best to do a little investigation as it is possible for an active employee to file for benefits in certain circumstances. There are a few key questions to ask as you determine the legitimacy of the claim.
Is the employee still working the same hours?
When an active employee has a reduction in their hours – or number of days worked – they may be able to qualify for partial unemployment benefits.
While each state has their own computation for determining if an individual is eligible, a general guideline is that individuals who are earning less than their weekly benefit amount may be eligible for at least some benefits from the state. Some states have an earnings disregard which means they subtract a portion of an individual’s earnings to arrive at a smaller earnings amount. This allows more people to qualify for partial benefits.
Does the employee have another employer?
If your employee is working more than one job, they may have had a reduction in hours or separation from their other employer. While there was no change in employment on your end, the state will notify you that a claim was filed if earnings were reported during the base period.
Did the employee file the claim?
If there hasn’t been a change in the hours an employee is working and they did not file for benefits under a different employer, the claim could be fraudulent.
Valid Cases to Watch
Claims received for employees with legitimate reasons still warrant review. While in many cases these are valid claims, it is still possible for fraudsters to take advantage of these situations.
Is the employee part of a temporary layoff or furlough?
Employees who are part of a temporary layoff or furlough with a definite return to work date can legitimately file for benefits. If the employees are being paid during the shutdown, however, this could be a situation where you may want to reach out to the employee and verify that they initiated the claim.
Keep in mind that most states require a one-week waiting period before benefits are paid. If the layoff lasts only one week, no benefits are typically issued.
Is the employee on leave of absence or receiving Workers’ Compensation?
Employees on approved leave of absence or collecting Workers’ Compensation are generally not eligible for unemployment benefits as they do not meet the able to work requirements. Therefore, you may want to reach out to employees in these situations to verify if the claim is legitimate or fraudulent.
Staffing Agencies
For staffing clients, the definition of an active employee is a bit different and this needs to be taken into consideration.
Staffing employees who are active but in between assignments and maintaining contact with their agency but have not been placed on another assignment can file for benefits.
Staffing agencies are encouraged to use discretion when determining whether to contact an active employee about a claim to confirm its validity.
About Us
For more than 40 years, 501(c) Services has been a leader in offering solutions for unemployment costs, claims management, and HR support to nonprofit organizations. Two of our most popular programs are the 501(c) Agencies Trust and 501(c) HR Services. We understand the importance of compliance and accuracy and are committed to providing our clients with customized plans that fit their needs.
Contact us today to see if your organization could benefit from our services.
Are you already working with us and need assistance with an HR or unemployment issue? Contact us here.
The information contained in this article is not a substitute for legal advice or counsel and has been pulled from multiple sources. Some information was provided by our friend, Darby Gibson, Client Marketing & Insights Specialist, at Thomas & Company.
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