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Some people otherwise eligible for benefits can still be disqualified from receiving benefits, based on how and why they lost their jobs. Generally, unemployment benefits are designed for people who are laid off because the employer doesn't have enough work for them, or who lose their jobs because of something the employer did wrong. So, workers will be disqualified if:
Should you contest one of your employee's unemployment claims? If they don't deserve the benefits, you should, but there's no point in wasting your time and running up legal bills by contesting the payment of benefits to workers who deserve them.
If you have to lay someone off because business isn't booming as you had hoped, or if you fired someone because you want to hire your brother-in-law instead, don't bother to object when your ex-employee makes a claim. On the other hand, if you have to fire someone for stealing or someone quits to start their own business, you can and should contest a claim for unemployment benefits.
What do you do if you're not sure whether the worker deserves benefits or not? Go ahead and contest the claim, up to the point where you'd need to hire a lawyer. At that point, if the worker has won, you may want to reevaluate whether the issue is worth pursuing. Your lawyer should be able to estimate your chances of winning.
There may be times when it's not in your interest to prevent your worker from collecting benefits, even if you would probably win if you tried. The most common situation is where you want to get rid of someone but don't have a good (or a legal) reason for doing it, or you suspect the worker is going to sue you.
What do you do? You "buy out" the worker by offering a severance package. The package may include an agreement that you won't do anything to prevent the worker from collecting unemployment, along with some severance pay, continuation of health benefits, or other items. If you go this route, have the worker sign an adequate release of liability before he or she leaves.