Controlling Unemployment Taxes

2. Controlling Unemployment Taxes Presented by Unemployment Insurance Services www.unemployment-services.com

3. 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

4. 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.

5. 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”

6. 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.

7. 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

8. 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.

9. 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

10. 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”

11. “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

12. “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

13. 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

14. 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

15. 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

16. 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

17. 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.

18. 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

19. 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

20. 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”

21. 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

22. 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

23. 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

24. 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

25. “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