We all know that employees who are no longer working, whether they left voluntarily or were discharged, have the right to file for unemployment benefits. What about those employees who are still working – can they file for unemployment benefits and will they be found eligible?
For the purposes of this tip, we are defining an active employee as someone who is not permanently separated from your organization. Receiving an unemployment claim from an active associate may raise a red flag. However, anyone can file for benefits and there are certain circumstances where an active employee may be able to collect benefits.
Is It Legitimate Or Fraudulent?
When you receive a claim for an active employee, your first inclination may be to report this claim as an identity theft claim. Before you report this as a fraud claim, it is best to do a little investigation as it is possible to be an active employee and file for unemployment in certain circumstances.
Is the employee still working their same hours?
When an active employee has a reduction in their hours, they may be able to qualify for partial unemployment benefits. While each state has their own computation for determining if an individual is eligible, a good rule of thumb is that individuals who are earning less than their weekly benefit amount may be eligible for some benefit from the state. Some states will offset a portion of the claimant’s earnings (subtract a portion of their earnings to arrive at a smaller earnings amount) to help more people qualify for partial benefits.
☑ What Can You Do?
Check to see if they have had a reduction in hours from their normal schedule. This can save you from reporting this as a fraudulent claim and speeds up the determination process.
Does the employee have another employer?
If your employee is working more than one job, they may have had a reduction in hours or separation from their other employer. While there was no change in employment on your end, the state will notify you that a claim was filed since earnings were reported during the base period.
☑ What Can You Do?
Asking the employee if they filed a claim can provide insight into how to respond to this claim. If they did file due to a separation from other employment, you will want to respond to this claim that they are still an active employee and indicate any changes in their regular work schedule.
Did the employee file the claim?
If there hasn’t been a change in the hours they are working and the employee did not file for benefits under a different employer, then this could be an identity fraud case.
☑ What Can You Do?
Both the employee and 501 should report this to the state workforce agency as fraud. When both parties (the employee and the employer) report the case as fraud, this provides the state with a clear indicator that this case may be fraudulent and can possibly prevent a hearing on the matter.
Valid Cases to Watch
Claims that are received for active employees for more common reasons should still be reviewed. In most cases these are valid claims. However, with fraud cases still surfacing, fraudsters could try to take advantage of these situations.
Is the employee part of a temporary layoff or furlough?
Employees who are part of a temporary layoff or furlough with a definite return to work date can file for benefits. If the employees are being paid during the shutdown, this would be a situation where you would want to reach out to the employee to see if they initiated the claim. Remember, most states have a waiting week for benefits so if the layoff is only for a week, benefits may not be paid.
Is the employee on a leave of absence or worker’s compensation?
Employees who are on an approved leave of absence or collecting worker’s compensation are typically not eligible for unemployment compensation. They do not meet the “able to work ” requirements set out for unemployment even if they are on an unpaid leave. You may want to reach out to employees on a leave of absence or on worker’s compensation to make sure that this is not a fraudulent claim.
For staffing clients, the definition of an active employee is a bit different and this needs to be taken into consideration. Staffing employees who are active but in between assignments and maintaining contact with their agency but have not been placed can file for benefits. Staffing agencies should use their best discretion on when to reach out to an active employee to determine if the claim for benefits is valid.
The above information was provided in part by Thomas & Company.