December 5, 2003
UNEMPLOYMENT COMPENSATION AND THE “TRIAL PERIOD” POLICY
By: John Moran, Associate Analyst
You asked for a description of the unemployment compensation “trial period” policy. This policy allows an employee to leave his job within the first 30 days of hire, due to no fault of the employer, and be eligible for unemployment benefits while the trial-period employer is charged a pro rata portion of the employee’s compensation benefits. You specifically mentioned a situation where the employee leaves work to further her education. You also wanted to know what legislation could be introduced to relieve trial-period employers from liability.
Unemployment compensation law allows a person to be eligible for benefits if he voluntarily leaves work that is deemed unsuitable. The trial period policy stems from administrative and court rulings that define whether employment is “suitable. ”
Since benefit claims are decided individually based on the facts of the case, any one case would have to be reviewed in its entirety for a complete analysis. But the example your constituent cites where the employee leaves work to further her education is explicitly included in statute as an eligibility disqualification.
Legislation could be proposed to prohibit the state from charging an employer’s experience rate if an employee leaves work during the trial period through no fault of the employer. By law, there are a number of instances where an employee can quit work, remain eligible for benefits, and the employer’s experience rating (part of the employer’s unemployment tax) is not charged. We could not find any evidence of bills introduced in recent years that would make trial period work non-chargeable to the employer.
SUITABILITY AND THE TRIAL PERIOD POLICY
The Labor Department’s Employment Security Appeals Board of Review considers appeals of department decisions regarding unemployment compensation (UC) benefits and it decides how the department will interpret UC law and regulations. The board has consistently held, and the courts have affirmed, that employees must be given a reasonable trial period to determine whether, under the statutes, a new job is “suitable” for them. UC law requires the state to consider a number of factors when determining work suitability.
In determining whether or not any work is suitable for an individual, the [labor department] may consider the degree of risk involved to such individual's health, safety and morals, such individual's physical fitness and prior training and experience, such individual's skills, such individual's previous wage level and such individual's length of unemployment… (CGS § 31-236 (a)(1)).
The law also lists five specific instances, such as a person being required to join, or resign from, a union as a condition of employment, in which work would not be deemed suitable.
In a 1996 decision (Harvey v. The Savings Bank of Manchester, Case No. 0152-BR-96) the appeals board reaffirmed the need for the trial period (while also deciding to shorten it to 30 days, except for unusual circumstances):
The [trial period] doctrine reflects an implied understanding in every contract of employment, akin to an employer’s probationary period in which it assesses the suitability of the worker, that an employee is entitled to a reasonable time to determine if he or she is suited for the work. The trial period doctrine evolved from the public policy of encouraging employees to give employment that is potentially not suitable a sincere and honest trial and not penalizing them by risking their eligibility for unemployment benefits in attempting the employment.
The board has also ruled that when an employee finds his new work does not meet his expectations, such as the employer has not provided pay at the promised level, yet the employee stays on the job beyond the trial period, then the employee is deemed to have acquiesced to the conditions and would not be granted UC benefits (K. E. Steinhardt v. Administrator, Unemployment Compensation Act, et al. 1999, Ct. Sup. 5656, CV 98 0163153).
LEAVING WORK FOR EDUCATION
Statutes specifically disqualify a person from receiving UC benefits if he is found to have left work to attend a school, college, or university, and the ineligibility continues during the period of school attendance (CGS § 31-236 (a) (6)). This provision appears to address the question raised by your constituent who indicated the employee that left his company during the trial period, did so to attend college. If the person is ineligible for benefits, the trial-period employer is not charged in his UC tax calculation.
JOB QUITS WHERE EMPLOYEE REMAINS ELIGIBLE AND EMPLOYER IS NOT CHARGED
State law provides a number of instances where an employee may quit his job, either due to unsuitability or for personal reasons, and still remain eligible for UC benefits, yet the last employer is not charged for a portion of that employee’s benefits. The quits for personal reasons (such as to care for a seriously ill spouse or child) are exceptions in the section detailing disqualifications (CGS § 31-236). The disqualification section also addresses suitability and includes the suitability parameters mentioned earlier in this report.
Another section addressing employers’ experience rate includes the following provisions when an employer’s experience rate will not be charged and the employee may still be eligible:
1. the employer paid wages of $ 500 or less to the employee;
2. the unemployment is due to (a) a natural disaster declared by the President, (b) damage to the place of employment caused by severe weather, or (c) fire not caused by the employer;
3. the employee is discharged for violating an employer’s drug testing policy that is consistent with state and federal law; and
4. the employer continues to employ the individual to the same extent that it employed him in the past (this usually applies when employee has two jobs and loses one of them; the other employer is not charged for unemployment resulting from another employer) (CGS § 31-225a(c)).
The law could be amended to provide that any trial-period employer’s experience rate not be charged for employees voluntarily leaving employment during the 30-day trial period. This would mean that benefit time accrued during the trial period would have to be picked up by the overall unemployment system, which is entirely supported by employers’ UC tax.
An employer’s UC tax is in large part based on its experience, but part is also based on the solvency of the state’s UC fund. Removing the trial-period charge from an individual employer would mean spreading it out over all employers as part of the fund solvency charge.