Employers contesting layoff benefits

Jeff Tyler Apr 2, 2009

Employers contesting layoff benefits

Jeff Tyler Apr 2, 2009


Jeff Tyler: Imagine getting laid off, applying for unemployment benefits, and finding your ex-employer is challenging you. More companies are contesting benefits. To explain, Marketplace’s Jeff Tyler takes us to court.

Jeff Tyler: At the appeals court in downtown Los Angeles, Monique Diaz is fighting for her unemployment benefits. Her last employer, a collections agency, claims she doesn’t deserve assistance. The company fired her for missing her collections quota.

Monique Diaz: I did everything I could, but people just, right now, do not have the money.

Maybe she wasn’t the best collections agent, but you can’t be denied unemployment benefits based on job performance. People are generally ruled ineligible only for misconduct or if they quit. Still, workers’ advocates have noticed a troubling trend:

Andrew Stettner: Workers are increasingly having their claims challenged by their employer.

Andrew Stettner is deputy director of the National Employment Law Project:

Stettner: Since your employer pays taxes on an unemployment claim, and that their tax bill will go up as more of their former employees claim benefits, they have a real incentive to challenge claims.

Many companies hire specialists to handle unemployment matters. The biggest is Talx, a subsidiary of the credit-reporting company Equifax. Stettner says Talx routinely contests benefits on grounds of misconduct, even if it’s still gathering evidence to back up an allegation.

Stettner: They just write, “Employee broke a rule,” and then they fax it in. And that’s enough in most states to stop the benefits. And then a lot of people don’t know what happened to them and they don’t get their benefits.

Talx declined requests for an interview. Instead, the company referred me to Doug Holmes, who heads an industry trade group focused on employment issues. Holmes says companies sometimes resort to a pre-emptive unemployment challenge in order to buy time.

Doug Holmes: They may have one or two days to check with the employer, or check their records to try to identify the information that is needed.

When a claim is contested, the checks stop coming until the dispute is resolved.

Monique Diaz hasn’t received benefits for two months:

Diaz: I’m glad I have friends and family that, you know, will help me out with the bills.

In some states, the wait for an appeal can take up to a year.

In Los Angeles, I’m Jeff Tyler for Marketplace.

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