Not all fired employees are eligible for unemployment.
Eligibility for unemployment is dependent on the situation under which the person was let go. — Getty Images/PeopleImages

When an employee is fired, they may wonder if they are allowed to collect unemployment benefits. This can be a tricky gray area, because eligibility often depends on why the employee was terminated.

In general, unemployment benefits are available to those who were let go through no fault of their own. However, if someone was fired due to misconduct or violation of company policy, they might be ineligible to collect unemployment.

Below, we outline how unemployment works, the factors that impact eligibility for benefits and the rights of fired employees.

How does unemployment work?

Unemployment insurance is a joint federal-state program that provides temporary benefits to those who have been let go by their employers for reasons beyond their control. The income and health insurance benefits provided are meant to hold the individual over during their job hunt. Because seeking work can be a long process, unemployment can last up to 26 weeks, depending on the previous job.

The amount and duration of benefits a person receives are determined by how long they were at their last job and how much they earned. There are also extended benefit plans in case they have exhausted all their state benefits. Congress is constantly changing and amending unemployment benefits and extensions, so be sure to keep yourself updated as time goes on.

If an employee quits their job by their own choice, they are not typically eligible for unemployment benefits. There are, however, certain extenuating circumstances that may make them eligible. In order to see if those apply to you, you can select your state here and follow the instructions to file for unemployment.

[Read: 3 Things You Need to Know About Employee Benefits]

This can be a tricky gray area, because eligibility often depends on why the employee was terminated.

Reasons for ineligibility

If you were let go from your job due to a round of layoffs or an acquisition, or because the position is no longer needed, you'll likely be eligible for unemployment, as these circumstances are largely out of your control. However, if the company fired you for a "cause" like misconduct, it could impact your eligibility. A few examples of fireable "causes" that exclude an employee from collecting unemployment include:

  • Stealing from the company.
  • Excessive absences.
  • Failing a drug test (if the company has a clear policy about drug use and its consequences).
  • Falsifying records.
  • Sexual harassment.
  • Abuse or harm caused to other employees.
  • Violating company policy.
  • Criminal behavior relating to the job.

Additionally, if you were let go by your employer for any reason before you reached a certain length of employment (typically one year), you may not be eligible to collect benefits.

Keep in mind that unemployment eligibility laws may differ from state to state. If you live in a different state from where you worked, apply for unemployment in the state you are living.

Rights of fired employees

The first thing to do after being fired is to find out what your rights are and if you are eligible for a severance package. Retrieve any documentation that may pertain to why you were fired. Be sure to have a paper trail in order to back up the evidence for the dismissal. Even if you think an email or memo may not be relevant, hold onto it, as it may be needed if your unemployment claim is denied.

If you file an unemployment claim and it is denied, you have the right to appeal that decision. You’ll need to represent yourself in most cases, so it will be in your best interest to have as much evidence as possible to support your case.

Can an employer contest an unemployment claim?

If you're the former employer of a terminated employee, you will be contacted by the government if that employee makes an unemployment claim and you have the right to contest it. However, an employee also has the right to fight the denial of an unemployment claim.

You may simply wish to let the issue go, but if you're going to contest the claim, be sure that you have clear and proper documentation of the employee’s “cause” for firing in order to avoid an expensive employment lawsuit.

[Read: How Do I Know It’s Time to Fire Someone?]

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Published January 31, 2020