3 ms·

If you fire an employee, why do you pay unemployment? I would understand if you laid them off, but firing? Also, if you are paying for their unemployment, why

If you fire an employee, why do you pay unemployment? I would understand if you laid them off, but firing? Also, if you are paying for their unemployment, why is unemployment being deducted from their paycheck too?

clarkevans 15y ago
In most states it's quite difficult to prove that you fired for cause -- performance is quite subjective. Typically the employee needs to do something dramatic & harmful for you to deny unemployment.
- roc 15y ago
  It's pretty easy to document poor performance. Any McJob employer can swing it and their margins are almost certainly lower than anything involving knowledge workers. I understand that no-one likes to do the business-overhead side of things in small businesses. But either the costs of paying (undue) unemployment aren't that big of a problem, or the employer has no-one to blame but themselves for not documenting cause.
  - clarkevans 15y ago
    There's a big difference between McJob and software development. If someone doesn't handle N customers, fails to show up on time, or has several documented customer relationship issues: it is clear cut. You have to give the employee several opportunities, etc. If you have an equivalent recipe for a marginally performing software developer that doesn't cost more to implement than just paying the unemployment : I'd love to hear it. Also consider team morale. Waiting for several phases of failure to "document" your case is a great way to lose your top performers and lose a customer. I think it's less expensive just to fire -- ideally /w severance in exchange for unemployment, if your state permits it.
    - roc 15y ago
      > "There's a big difference between McJob and software development." Yes and no. The basics are the same: you need to document responsibilities, goals and performance. Document performance that doesn't meet the goals. Document some sort of plan by which you try to help the underperforming employee meet their goals and then document their continuing performance. Is it potentially cheaper to just pay a modest severance or unemployment insurance? Quite possibly. But documenting performance is not voodoo and the fact that just paying a modest severance or unemployment is cheaper than documenting performance rather undercuts the assertion that unemployment costs are onerous.
      - westicle 15y ago
        Not to mention fairer on the employee. Not everyone is a self-starter or "rockstar". Failing to document clear responsibilities and goals and then measure performance against those goals shortchanges you and them. This may be an unpopular sentiment around HN circles, but just expecting every employee to "get it" and not having a consistent process to deal with underperformance (which can have many different and often addressable causes) is a crappy way to treat employees in my view.
gwright 15y ago
I don't think people are being careful about the terminology here. Firing could mean terminating employment because someone is no longer needed (what you are calling 'laid off') but it can also mean terminating employment because they broke some rules or laws (i.e. didn't show up for work, harrased co-workers, etc). If you are fired "with cause" (i.e. you did something wrong) you aren't eligible for unemployment. If you quit you are not eligible for unemployment. Only if you are fired "without cause" are you eligible for unemployment payments.
- HeyLaughingBoy 15y ago
  If you quit you are not eligible for unemployment. Let's be careful about this. It depends on the reason you quit. If you were being harassed and the company did nothing about it, or you had unsafe working conditions, etc, you can still collect. It's better to say that if you quit for reasons that have nothing to do with the employer, you cannot collect unemployment. I had a co-worker who quit because the raise he was promised (in writing) at hiring time never materialized. The company had to pay unemployment while he looked for work.
  - gwright 15y ago
    Good point. Thanks for the meta-clarification.
pkteison 15y ago
The employee files for unemployment insurance regardless, lying and claiming they were laid off. You file a dispute, claiming they were terminated for cause. The unemployment office makes it quite clear that you will lose your dispute and should drop it. You refuse, because you have a good clear case where clearly this guy was fired for cause. You present your good clear case, and you lose anyway, and the person fired for cause still gets unemployment, and your unemployment insurance rates go up. That's just how it works. It's not how it's written, and it's not how it's supposed to work, but it's how it works.
- adient 15y ago
  I find it odd when people create such strange generalizations in their head. Whether this comment is from your own anecdotal experience or not, it is just plain wrong as a general matter. Defeating an unemployment appeal is certainly possible and not that difficult if you've done your due diligence during the process.
- riverlaw 15y ago
  You are wrong. I won every case (~5) filed against me over ~3 years working at Tech Support. If you have proper documentation as to why you fired someone you do not have to pay unemployment insurance.
  - pkteison 15y ago
    I'm flat out wrong? I see your anecodote and raise you a statistic: "In 2009, employers filed 405,153 appeals to deny benefits to former workers and 36% won, a figure that hasn't changed too much in recent years, according to the U.S. Department of Labor." Wall Street Journal "Feeling Blue about Pink Slip Taxes" http://online.wsj.com/article/SB10001424052702303960604575158214061078180.html http://online.wsj.com/article/SB1000142405270230396060457515... 36% won. So 2/3rds of the time (read: most of the time), employee wins. By all means, still appeal. But odds are not fantastic. Plan on having to pay out some unemployment that you shouldn't have to. A written employee handbook and records showing when policies were violated will save you some money sometimes, but don't count on it. You can fire employees, for cause, and still see your insurance go up, even with an appeal.

clarkevans 15y ago

In most states it's quite difficult to prove that you fired for cause -- performance is quite subjective. Typically the employee needs to do something dramatic & harmful for you to deny unemployment.

roc 15y ago
It's pretty easy to document poor performance. Any McJob employer can swing it and their margins are almost certainly lower than anything involving knowledge workers. I understand that no-one likes to do the business-overhead side of things in small businesses. But either the costs of paying (undue) unemployment aren't that big of a problem, or the employer has no-one to blame but themselves for not documenting cause.
- clarkevans 15y ago
  There's a big difference between McJob and software development. If someone doesn't handle N customers, fails to show up on time, or has several documented customer relationship issues: it is clear cut. You have to give the employee several opportunities, etc. If you have an equivalent recipe for a marginally performing software developer that doesn't cost more to implement than just paying the unemployment : I'd love to hear it. Also consider team morale. Waiting for several phases of failure to "document" your case is a great way to lose your top performers and lose a customer. I think it's less expensive just to fire -- ideally /w severance in exchange for unemployment, if your state permits it.
  - roc 15y ago
    > "There's a big difference between McJob and software development." Yes and no. The basics are the same: you need to document responsibilities, goals and performance. Document performance that doesn't meet the goals. Document some sort of plan by which you try to help the underperforming employee meet their goals and then document their continuing performance. Is it potentially cheaper to just pay a modest severance or unemployment insurance? Quite possibly. But documenting performance is not voodoo and the fact that just paying a modest severance or unemployment is cheaper than documenting performance rather undercuts the assertion that unemployment costs are onerous.
    - westicle 15y ago
      Not to mention fairer on the employee. Not everyone is a self-starter or "rockstar". Failing to document clear responsibilities and goals and then measure performance against those goals shortchanges you and them. This may be an unpopular sentiment around HN circles, but just expecting every employee to "get it" and not having a consistent process to deal with underperformance (which can have many different and often addressable causes) is a crappy way to treat employees in my view.

gwright 15y ago

I don't think people are being careful about the terminology here. Firing could mean terminating employment because someone is no longer needed (what you are calling 'laid off') but it can also mean terminating employment because they broke some rules or laws (i.e. didn't show up for work, harrased co-workers, etc). If you are fired "with cause" (i.e. you did something wrong) you aren't eligible for unemployment. If you quit you are not eligible for unemployment. Only if you are fired "without cause" are you eligible for unemployment payments.

HeyLaughingBoy 15y ago
If you quit you are not eligible for unemployment. Let's be careful about this. It depends on the reason you quit. If you were being harassed and the company did nothing about it, or you had unsafe working conditions, etc, you can still collect. It's better to say that if you quit for reasons that have nothing to do with the employer, you cannot collect unemployment. I had a co-worker who quit because the raise he was promised (in writing) at hiring time never materialized. The company had to pay unemployment while he looked for work.
- gwright 15y ago
  Good point. Thanks for the meta-clarification.

pkteison 15y ago

The employee files for unemployment insurance regardless, lying and claiming they were laid off. You file a dispute, claiming they were terminated for cause. The unemployment office makes it quite clear that you will lose your dispute and should drop it. You refuse, because you have a good clear case where clearly this guy was fired for cause. You present your good clear case, and you lose anyway, and the person fired for cause still gets unemployment, and your unemployment insurance rates go up. That's just how it works. It's not how it's written, and it's not how it's supposed to work, but it's how it works.

adient 15y ago
I find it odd when people create such strange generalizations in their head. Whether this comment is from your own anecdotal experience or not, it is just plain wrong as a general matter. Defeating an unemployment appeal is certainly possible and not that difficult if you've done your due diligence during the process.
riverlaw 15y ago
You are wrong. I won every case (~5) filed against me over ~3 years working at Tech Support. If you have proper documentation as to why you fired someone you do not have to pay unemployment insurance.
- pkteison 15y ago
  I'm flat out wrong? I see your anecodote and raise you a statistic: "In 2009, employers filed 405,153 appeals to deny benefits to former workers and 36% won, a figure that hasn't changed too much in recent years, according to the U.S. Department of Labor." Wall Street Journal "Feeling Blue about Pink Slip Taxes" http://online.wsj.com/article/SB10001424052702303960604575158214061078180.html http://online.wsj.com/article/SB1000142405270230396060457515... 36% won. So 2/3rds of the time (read: most of the time), employee wins. By all means, still appeal. But odds are not fantastic. Plan on having to pay out some unemployment that you shouldn't have to. A written employee handbook and records showing when policies were violated will save you some money sometimes, but don't count on it. You can fire employees, for cause, and still see your insurance go up, even with an appeal.