Has The Economy Made It Harder To Get Unemployment Benefits?

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The economy finally seems to be on the upswing. But, has that made it more difficult for terminated employees to receive the small protection offered by unemployment benefits?

Even though things are improving, many people are still out of work. At, at this time of year, it’s not uncommon for companies to make further cuts. Unemployment insurance benefits provide eligible terminated employees some minor assistance while the employee seeks to transition to a new job. In Illinois, unemployment benefits are no windfall, especially to a terminated executive. The maximum weekly benefit for a terminated employee is just over $400.

Not every terminated employee is eligible to receive unemployment benefits. You have to earn a minimum amount to even qualify; you cannot quit or be fired for cause, as defined by Illinois law; and you must actively search for alternative employment. With these requirements in mind, the Illinois Department of Employment Insurance (IDES) has, in the past, generally appeared to lean in favor of the employee when determining eligibility.

However, through working with both executives and small business owners, my office has been seeing a shift. I am not sure if state budget pressures are pushing this change, but IDES employees have been seemingly going out of their way to contact small business owners and encourage them to contest unemployment claims.

This may or may not be a good idea. While it is true that unemployment claims may increase the unemployment insurance taxation rate for a small business, my office has also seen more animosity created when claims are contested. It’s one thing if there is real “cause” for contesting a claim, but the standard set by Illinois law is pretty high. Showing up late for work may or may not fall within the definition. It can depend on the number of times the employee showed up late; whether warnings were given; whether the company followed its own disciplinary policy; and it can all come down to the opinion of the hearing officer assigned to the claim.

At the same time, a business owner who is encouraged by IDES to contest a claim is probably more likely to do so. And, it seems logical that it would follow that a claim where IDES encourages the employer to contest is more likely to be denied. Of course, you cannot rely on logic when examining decisions made by the State of Illinois or its employees. This may save employers and the State some needed resources. Or, it may end up costing both a lot more. Think about it. An employee who believes his/her termination was the result of wrongful conduct such as retaliation or discrimination is probably more likely to pursue a claim against an employer who takes the extra step of interfering with unemployment benefits. That doesn’t even take into account the resources required to address the multiple appeals allowed when benefits are approved or denied.

All I can say is that making it harder for employees to receive unemployment benefits could very well have unintended consequences.