HOW TO LOWER EDUCATIONAL INSTITUTIONS’ UNEMPLOYMENT COSTS

By August 7, 2018Blog, Newsletter

With a new school year ahead, this is a good time to review guidelines related to the concept of “reasonable assurance” for educational institutions and, in some states, nonprofits that provide educational support services. Reasonable assurance, commonly referred to in the industry as RA, is a regulation in each state’s unemployment law that provides for denial of benefits between successive academic terms (e.g. summer break) if there is a reasonable expectation of employment in a similar capacity in the subsequent term.

The general idea is that any employee who performs services for an educational institution, and who is temporarily laid off between academic terms or during an established and customary vacation period or holiday recess, has a likelihood of returning to a similar position. A common application of RA is when teachers are on summer recess and are scheduled to return to employment in the next school year. It does not apply to individuals that permanently separate through lack of work, voluntary resignation, or discharge.

Each state may have slightly different verbiage, but guidelines tend to be similar to the following:

Benefits based on service in an educational institution are not payable to an individual in any week of unemployment which begins during the period between two successive academic years or terms and there is a reasonable assurance that the individual will perform services in the same or a similar capacity in the second year or term.

Reasonable assurance applies to vacation and holiday periods scheduled within the school year

Employers often think that RA is an issue to address at the close of the school year. And although it relates to providing individuals with the “reasonable assurance” of returning to work the following school year, RA also applies to periods between individual terms and customarily scheduled vacation or holiday periods.

The language found in a majority of reasonable assurance laws appears similar to the following:

Benefits may not be paid to an individual for a week that begins during an established and customary vacation period or holiday recess, if the individual performs the services in the period immediately before the vacation or holiday and there is a reasonable assurance that the individual will again perform such services after the vacation or holiday.

 Every state has minor differences in the way that reasonable assurance law is interpreted, including the way that an educational employer, or education institution, is defined.

Please note that, in addition to school employees, this concept may also apply to employees of nonprofits who perform services to, or on behalf of, an educational institution in a limited number of states such as CA, NJ, VA and WI to name a few.

Something to keep in mind is that when an individual is denied benefits because of RA, and if that person is not given an opportunity to work in the second year or term or upon returning from a vacation or holiday period, that person may still be able to claim retroactive benefit payments.

Notifying employees of reasonable assurance

It is strongly recommended that RA be given in written form, although it is not required. Written notification would enable you to provide indisputable documentation, if needed, to defend yourself against claims for unemployment benefits.

Any letter or form provided should include the following elements:

  • Date
  • Employee’s name
  • Verbiage clearly stating that the individual is being given reasonable assurance of returning to work for the specific school year involved, as well as any scheduled vacation or holiday periods contained within
  • Employer’s name
  • The school year’s start and end dates
  • Scheduled school year vacation dates or holiday periods
  • The issuer’s name and job title, and ensuring that the notice comes from an individual who is authorized to issue reasonable assurance but not authorized to enter into a contract
  • Conspicuous statement of the following: “This notification is not intended to create a contract of employment or to alter an existing contract of employment, if any.”

Save a copy of all RA letters that are provided to your employees. Also request a signed copy, or retain a signed verification of receipt.

When contacted by your unemployment insurance consultant, be sure to advise her if the worker has RA to return following the break and provide a copy of the RA letter. While written notification is not a requirement, its usage is strongly encouraged and can strengthen the unemployment case.

It is important to note that if the offer of subsequent employment following the break is subject to a contingency such as funding, enrollment, or program changes, then RA does not apply and cannot be pursued.

For questions about reasonable assurance as it applies in your state, members of 501(c) Agencies Trust can contact Doug Adams at 800-442-4867 x166 or dadams@501c.com.

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