Congress created the unemployment insurance system in 1935. States are charged with establishing local eligibility requirements and benefit levels within federal parameters. Employers fund the unemployment insurance programs through quarterly payments. Businesses are charged for each employee who uses the system which creates a great incentive for employers to try to find a way to disqualify former employees or to try to claim that a former employee associated with their business entity as independent contractors and not as in house employee.
Employee who leave a job voluntarily are disqualified from receiving unemployment benefits unless they can prove that they left for "good cause" attributable to the former employer. There are several way under the law to provide a showing of such good cause, including a showing that the resignation was due to illegal acts of sexual, racial, gender, age discrimination by the employer, a situation involving “whistle blowing” and retaliation by the former employer forcing the employee to resign. Similar situations involving unfair and illegal employer acts which force a voluntary resignation from an employee or a voluntary acceptance of a lay-off by an employee will be reviewed by the unemployment insurance office to determine if the former employee may still be entitled to receive benefits.
How a Voluntary Layoff can be Shown to Be Necessary
An employee who resigns his or her job or accepts a voluntary lay-off by an employer will not be disqualified from receiving unemployment benefits if he or she can show that the reasons for leaving the former employment were so “urgent, compelling and necessary” that leaving the job was essentially an “involuntary” act forced on him or her by the actions of the former employer. Courts have allowed former employees to receive benefits in such situations as where lack of transportation to work caused an employee to resign, employee left work to join a spouse in another State, leaving work to join a non-marital partner in a new location beyond commuting distance, and leaving work and accepting severance package where the employee had a reasonable belief that refusing to accept the package would result in a termination. On the other hand, courts have refused to recognize “good cause” where the former employee could not obtain transportation to work due to a suspension of his driver’s license, an employee could not get transportation to work after his car broke down and he refused to use alternative transportation means and leaving work and accepting a severance package where the fear of termination was unfounded and not reasonable.
The general understanding must be that even if an employee has voluntarily resigned or voluntarily accepted a lay-off from his or her job there is no one clear line of demarcation as to whether or not that employee will also be denied as an unqualified employee his or her unemployment benefits. It is best to consult as soon as possible after the resignation or voluntary lay-off with an experience employment attorney to best preserve all of the employee’s rights and interests. There are way too many twists and turns in this area of law for the layman to simply accept without question a decision by the unemployment office to deny benefits to an employee who may turn out to be completely qualified and entitled to receive such post separation benefits.
One situation which may not be commonly know by the general working public is where a temporary help agency employee who does not seek a reassignment before filing for unemployment benefits will be determined to have voluntarily quit and may be denied benefits. The temporary employment agency must have previously advised that worker in writing of the requirement to contact the agency for reassignment upon completion of the former assignment. If that employee was not so noticed by the employer temporary agency, her employment attorney may be able to help her to be qualified to receive the unemployment benefits which she is properly entitled to receive.
The only conclusion possible here is that it is always best to consult with an employment attorney as soon as possible after being denied benefits by a State unemployment office. There may be important legal rights still available to that former employee that only an employment attorney will be able to readily point out and act on in a timely manner to preserve the employee’s rights and interests.