April 27, 2000
EXPLANATION OF CONNECTICUT AND OTHER STATES' UNEMPLOYMENT COMPENSATION ELIGIBILITY
REQUIREMENTS, CHARGEABILITY RULES, AND
EMPLOYER RIGHTS TO CONTEST CLAIMS
By: Laura Jordan, Associate Attorney
You asked (1) what Connecticut's unemployment compensation (UC) eligibility requirements are and whether other states' eligibility requirements are different; (2) what rights an employer has to contest a former employee's claim that he is eligible for benefits, including a description of the appeals process; and (3) what the chargeability rules are.
In general, to receive unemployment compensation benefits, claimants must have earned at least 40 times their weekly benefit rate during their base period. Also, they must have been dismissed through no fault of their own (i.e., the law identifies numerous circumstances, such as quitting a job, under which a claimant is disqualified). Other states' monetary requirements vary, as do their disqualifying circumstances. A summary of the 50 states' eligibility and disqualification provisions is attached. Federal law requires all states to require claimants to be willing and able to work.
An employer may contest a claimant's eligibility for unemployment compensation at the time (1) the claimant requests benefits, (2) the labor department awards benefits, or (3) the employer learns of the award, if it first learns of the award in its quarterly statement of charges.
If a benefit adjudication specialist rules against a contesting employer, the employer may file an appeal with the compensation appeals division. It may appeal the division's decision to the Board of Review and it may appeal the board's decision to the Superior Court.
In general, employers' unemployment compensation tax accounts are “charged” for the amount of benefits that their employee's receive. However, state law contains a number of circumstances under which an employee's receipt of benefits will not affect an employer's unemployment compensation tax rate.
Minimum Earnings Requirement
States may impose minimum earnings requirements before claimants become eligible for UC and all states do so. Connecticut law requires a worker to have earned at least 40 times his weekly benefit amount during his base period. Thus, for example, if a claimant's benefit is $250 per week, he must have earned a minimum of $10,000 in his base period before he can collect (CGS § 31-235 (a)(3)).
Under current law, a claimant is disqualified from receiving UC benefits during any week that he receives temporary total disability payments under the workers' compensation law; wages in lieu of notice; or dismissal or severance payments, unless as a condition of receiving the payment he is required to give up a legal right or claim against the employer (CGS § 31-236 (a)(4)(A)).
Disqualification for Quitting a Job
States have complete discretion to disqualify employees who quit work without sufficient cause. Under Connecticut law, a claimant is not eligible if he voluntarily leaves suitable work without good cause attributable to his employer. The disqualification lasts until the claimant gets another job and earns at least 10 times his benefit rate.
Six non-work-related reasons for leaving are exempt from this disqualification and are considered “qualifying quits”: leaving (1) to care for a seriously ill spouse, child, or live-in parent; (2) because transportation to work, other than a personal vehicle, was discontinued and there is no other reasonable transportation; (3) work taken while on layoff when recalled by a former employer; (4) solely because of a government law or regulation; (5) part-time work to accept full-time work; and (6) work to protect yourself or a child living with you from domestic violence.
Disqualification for Being Fired
Under Connecticut law, a claimant cannot collect UC if he is fired or suspended for (1) willful misconduct (including deliberately violating a reasonable and uniformly enforced company rule or policy); (2) felonious conduct; (3) stealing services or property worth $25 or more or any amount of currency; (4) just cause; (5) participating in an illegal strike; (6) being disqualified from performing a job because of failing a legally required drug or alcohol test; or (7) being absent without notice at least three separate times within 18 months. A claimant is also disqualified if he is discharged while serving a prison sentence of at least 30 days. In most cases, the misconduct leading to the disqualification must be work-related. The disqualification lasts until the claimant returns to work and earns at least 10 times his benefit rate.
Refusal to Accept Suitable Work
A claimant who fails to apply for and accept suitable work, including an employee of a temporary help service who refuses suitable employment offered by the service, is disqualified until he returns to work and earns at least six time his benefit rate.
The Federal Unemployment Tax Act (FUTA) requires all states to deny benefits to the following categories of workers: aliens, professional athletes, and employees of educational institutions.
After having received benefits during a benefit year, no individual is eligible for benefits in a new benefit year unless he has again become employed and been paid wages since the commencement of the prior benefit year of at least $500 or five times his weekly benefit rate, whichever is higher, by an employer that is covered by the unemployment compensation law.
Specific Example Provided
You asked if a person would be eligible for unemployment compensation if he worked on a loading dock and suffered an injury that made it impossible for him to perform his regular duties, but he was capable to work as a clerical worker.
State law requires unemployment compensation recipients to look for work and accept suitable employment. If the worker in the example you provided refused a clerical position that was suitable, he could be disqualified from receiving benefits until he returns to work and earns at least six times his benefit rate.
Other States' Requirements
We have attached tables provided in the 1999 Highlights of State Unemployment Compensation Laws that identify the qualifying requirements and disqualifying conditions in the 50 states. The federal unemployment law requires that all states, at a minimum, be involuntarily unemployed and be able and ready to work.
At Time of Job Separation
When an employer terminates an employee for any reason, it must prepare an unemployment notice (known as a Form Connecticut UC-61) and give a copy to the terminated employee at the time of termination. If it is impossible or impracticable to give the form to the employee, the employer must mail it to the employee's last known address.
A former employee must present the Unemployment Compensation Job Center with his unemployment notice to receive benefits. If the employer has certified that the claimant lost his job due to a lack of work, the state labor department is unlikely to investigate his reasons for job separation. But if the labor department determines that a fact-finding hearing is needed to determine a claimant's eligibility it must send a notice of the hearing to the employer. The department mails the notice to the employer's address that appears on the notice of separation.
If no notice of separation is provided by the claimant the department mails the hearing notice to the most recent address of record that the employer provided to the department's Employer Status Unit.
If the reason for the claimant's separation is a voluntary quit or a discharge for misconduct, the labor department will mail the employer a Form UC-840 (a Notice of Hearing and Unemployment Compensation Claim). The employer may attend the pre-determination fact-finding interview, request participation by telephone, or submit the separation information in writing on a Form UC-790 (a Fact Finding Supplement).
At the fact-finding hearing, an adjudication specialist determines whether the claimant is eligible for benefits. The employer and the claimant provide claim-related information such as employment dates and the reason for separation.
If Benefits are Approved
If the adjudication specialist determines that the claimant is eligible for benefits, he informs the employer of this in writing and gives it information about its right to appeal the benefit award and whether the benefits will be charged to his unemployment compensation experience tax account. (An employer's unemployment insurance irate is affected by its experience.)
The employer may appeal the award on a form provided with the notification or by letter that gives a detailed reason for the appeal. The labor department must receive the appeal within 21 days from the date of the notification. An appeal can be valid if the department receives it after 21 days if the employer can prove that it had good cause to miss the deadline. Under some conditions, the employer can appeal the decision to charge his experience account.
State law requires the adjudication specialist to award benefits (1) whenever an employer receives notice of a fact-finding hearing, but fails to appear at the hearing and (2) if the employer does not provide a timely and adequate written response by the close of business on the day the hearing was scheduled. Employers may fax their responses to the adjudicator.
If Employer's Quarterly Statement of Charges is the First Notification of Benefit Award
Employers receive a Quarterly Statement of Charges (a UC-54Q) at the end of each calendar quarter, unless no charges were made during that quarter. It may appeal a determination that it is chargeable for a portion of a former employee's benefits due to its non-participation in a fact-finding hearing when it was not previously notified that the department awarded benefits.
Appealing the Benefit Award
If an employer disagrees with the adjudicator's decision, he may appeal it to a referee within the unemployment compensation appeals division. It may appeal the referee's decision to the Board of Review and it may appeal the board's decision to the Superior Court.
Connecticut's unemployment compensation system is financed entirely through taxes on employers. The vast majority of employers are assessed three different taxes to fund the system: the charged rate tax; the fund balance tax; and the bond assessment tax.
The amount of state unemployment compensation taxes that an employer pays is a function of the (1) amount of wages paid by the employer that are subject to the state's taxable wage base; (2) the amount of unemployment benefits paid to the employer's workers over a specified period of time (i.e., the amount that is “charged” to the employer's account); (3) solvency of the state's unemployment compensation trust fund; and (4) financial obligations associated with state bonds issued to pay off a debt to the federal government.
The charged rate tax is generally the largest component of an employer's unemployment compensation tax. The charged rate, also known as the merit or experience rate, is based on the premise that an employer's contributions to the state's unemployment compensation trust fund should be related to that employer's use of the fund. The charged rate represents the ratio between the benefits paid to that employer's unemployed workers during a specified period of time and the total amount of taxable wages paid by their employer during the same period. The ratio calculated by this method is expressed as a percentage.
The typical period upon which an employer's rate is based is the previous three years, ending each June 30. However, if there are chargeable benefits for at least the 12 months preceding June 30, the employer can be rated based on that experience. If the employer does not have sufficient time on which to be experience rated, that employer's rate will be the higher of either 1% of its taxable wage base, or the state's five-year benefit cost rate. The labor department computes the latter figure annually by dividing the total benefits paid to all claimants in the state during the five years by the total taxable wages paid by all employers for the same period.
State law sets a .5% minimum and a 5.4% maximum charged rate that employers can incur. The charges are assessed in increments of .1%. If the percent is not an exact multiple of .1%, the charged tax rate will be the next multiple higher. Thus, if the resulting percent yields less than .5%, that employer is charged .5%, but even if the resulting percent is greater than 5.4%, that is the maximum that can be charged.
Non-Charging Separation Provisions
An employer's experience account will be unaffected by benefits that are paid for an employee who:
1. voluntarily quits his job for a good cause that is attributable to the employer;
2. is on temporary layoff from his regular work or who has been recalled after a temporary layoff, but leaves his employer for a new job;
3. leaves work with an employer that is outside his regular apprenticeable trade to return to work in his regular apprenticeable trade;
4. leaves work solely due to a government regulation or statute;
5. leaves part-time work with his employer to accept other full-time work;
6. leaves the employer to care for a seriously ill spouse, parent, or child;
7. leaves employment to protect herself or a child living with her from domestic violence;
8. continues to be employed to the same extent by an employer at the time he establishes his claim as he had been during his base period provided the employer gives timely notification to the labor department; or
9. had earnings of $500 or less from the employer during his base period.
In addition, dependency allowances (e.g., extra benefits for a dependent spouse or child) do not affect an employer's experience account.