When evaluating an unemployment claim, the state workforce agency will determine whether the employee or the employer was the separating party. If the employer is considered the separating party, the separation will be treated as a discharge. Meanwhile, if the employee is the separating party, it will be considered a voluntary resignation.
Even though the burden of proof is on the employee in voluntary resignation cases, it remains important for employers to understand what constitutes a voluntary resignation, what documentation retain after one occurs, and which types of resignations may not be fully voluntary or, may still result in benefit eligibility despite being voluntary.
What is a Voluntary Resignation?
A voluntary resignation occurs when an employee initiates separation of their own volition. For unemployment purposes, it also means that the burden of proof falls to the employee to prove they are eligible for benefits.
While requirements vary state to state, employees are generally not eligible for benefits unless they demonstrate good work-related cause. They must also show they exhausted all reasonable remedies before resigning.
Voluntary Resignation Considerations
While a voluntary resignation puts the employee on the proverbial hot seat, it is still important for you, as the employer, to be prepared to make a strong case. State adjudicators will consider many things, including the following key areas:
Did the claimant provide a notice of resignation?
If yes, document as many details as possible:
- The date of resignation
- The intended last day of work
- Whether the notice was worked, and if not, why not and the employee was paid through the notice.
Was a resignation letter provided?
If yes, file it in the employee’s record. If resignation was via text message, retain screenshots. If no, consider asking for a resignation letter in writing.
Alternatively, make detailed notes about how the resignation was communicated. Document conversations about the resignation, including who the employee spoke to and any relevant details to the conversation (why they were resigning, date of resignation, intended last day of work, etc.). Including these details on a signed statement by the individual to whom the employee resigned can be helpful and ensure you have all the details available should a claim be filed.
It’s ok to ask questions!
Sometimes the real reason for resigning isn’t initially clear. It is acceptable to ask follow-up questions to identify and issues that might be resolved to retain the employee. Document these efforts to demonstrate that you were unaware of any concerns and attempted to retain the employee.
Resignations That May Qualify
Domestic Violence Situations
States are increasingly allowing benefits when an individual leaves their employment due to a domestic violence situation. However, employers are typically not held liable for benefits in these cases.
Care for a Family Member
If an individual resigns to care for a family member, they may be eligible for benefits, though eligibility varies widely from state-to-state. The severity of the illness and relationship to the employee can be key determining factors in eligibility.
It is important to note that even if an individual’s separation reason qualifies for unemployment, they may not meet availability requirements depending on the extent of their caregiving, which could result in disqualification.
Moving with a Spouse/Military Reassignment
Spouses of military service members are often eligible for benefits when relocating. Eligibility criteria differ by state.
Dangerous Conditions
If working conditions are intolerable and the employee took reasonable steps to resolve them without success, they may be eligible for benefits. Conditions can include, but are not limited to:
- Sexual harassment
- Unsafe work conditions
- Pressure to commit illegal acts
Another Job
If an employee resigns to accept other employment but the job offer falls through, they may be eligible for benefits. However, an employer is not typically liable for those benefits, though there are some exceptions, such as New York.
Notice Periods
Most states view employment as “at will,” meaning either party can end the employment relationship at any time, with or without notice. However, while legally you are not required to allow an individual to work out a notice period, state workforce agencies view separations differently depending on how the notice period is handled.
Employee Provides and Works Out Notice Period
If the employee provides and works out their notice period after resigning, state workforce agencies will view the separation as a voluntary resignation.
Employee Provides Notice Period, Employer Immediately Separates
However, if an individual provides a notice period after resigning but is informed by the employer that they will not be allowed to work out the notice, state workforce agencies will now view the separation as an employer-initiated discharge. This transitions the burden of proof back to the employer, who will now need to prove misconduct, which is highly unlikely in these scenarios.
Paying Out Notice
In some states, paying out the notice instead of allowing the employee to work the period may allow for the state to continue to view the separation as a resignation. Check state-specific regulations.
It is important to make the business decision that is right for your organization when separating from employees. However, keep in mind that a sound business reason does not equate to a disqualifying reason or situation for unemployment purposes.
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The information contained in this article is not a substitute for legal advice or counsel and has been pulled from multiple sources. Some information was provided by our friend, Darby Gibson, Client Marketing & Insights Specialist, at Thomas & Company.
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