How Staffing Firms Should Respond to a SUI Unemployment Claim


insurance_smIf there is one thing that is reliable in the staffing industry, it is that timing is often anything but predictable. Between training and recruiting talent, following up on invoices and being ready at a moment’s notice to respond quickly to the ebb and flow of business, a staffing agency’s timing is critical to their ongoing growth. 

Due to this quick pace, it is easy for things that seem small or untimely to be pushed to the side or prioritized for another time. With some items, this practice is absolutely necessary, but with others, like state unemployment insurance (SUI) claims, timely response is of the utmost importance.

It is up to you, the employer, to monitor claims and respond quickly if you wish to contest a claim. Delay can mean expensive penalties, while active management ensures that you retain your rights while controlling costs.

Here are three things every staffing firm should know when it comes to SUI claims:

  1. The Claims Process

The claims process begins when an employee files an unemployment claim with their state agency. Typically, an employee will file because of layoffs or downsizing, but sometimes employees who have been terminated with cause may also file.

The time period for claims filing varies from state to state.  After a claim is made, then you, as the employer will be asked to provide employment, wage or salary information, plus details concerning the separation of employment.

If the termination of employment was with cause (e.g. employee misconduct), and the employee is still requesting benefits, your agency may dispute the claim at this time. Just be sure to do this in a timely manner or the employee may have their claim approved due to the delay.

  1. The Appeals Process

Should the state agency approve the claim and you wish to dispute it, you will have a window in which to file an appeal. Be sure to note carefully when this time period is so that you stand the best chance of having the claim overturned.

Appeals generally require filling out specific forms and providing supporting documentation, which could include (but are not limited to) employee handbooks, disciplinary notices, resignation letters or exit interviews. The state agency will then review the appeal and make a determination on whether to approve or deny your appeal.

At this point, your business may request a hearing at which both parties—the employer and the former employee—must be present, either in person or by phone. In most cases, you will have the opportunity to present your case along with any supporting documentation or proof of termination with cause.

You may have the opportunity also to present and interview witnesses (such as an HR manager or other employee) or have an SUI hearing specialist or attorney present. Each state’s process is different, and you may have to go through multiple appeals before a final decision is made.

Bottom line: carefully note state requirements for each part of the appeals process, file all information on time and understand your rights as an employer in what can be a tense situation.

  1. Always Respond!

Even if you believe that an unemployment case is an easy approval or denial, always respond to unemployment claims within your state’s statutory period. While this might seem like an extra step in your already busy day, it could save you serious cash in fines and penalties in the long run.

In some states, not only will it cost you money to ignore these claims, but you may also lose your right to appeal, have a hearing or even receive further notification of the claim process.

Your best bet when it comes to SUI claims is to simply develop an aggressively proactive approach to response, no matter how daunting it may seem. There are some tasks in your business you can re-order or re-prioritize, but this is one that always deserves speedy attention.

Many agencies are surprised to learn that there are outside services to administer the SUI claims process from start to finish.  Advance has relationships with several of these third-party providers.  It may make sense to contract with one of these services as a way to reduce HR time and cost.

If your staffing agency requires assistance in this matter, contact us. We only work within the staffing industry and understand the unique concerns of your business. Request a free consultation with Advance Partners today.

{The information from this article was provided by Paychex.}