Defending an Unemployment Compensation Claim
| Publication year | 1984 |
| Pages | 69 |
1984, January, Pg. 69. Defending an Unemployment Compensation Claim
In 1983, Colorado employers paid an average of $112 per covered employee for unemployment compensation. With the enactment of House Bill 1591, the expected average will rise to $240, more than double the amount paid at the 1983 rate.(fn1) Because unemployment compensation rates are based on the individual employer's benefit experience, the cost of unemployment compensation may be controlled if the employer can avoid an award of benefits attributable to its account.
The article offers guidelines for reducing this business expense by contesting payments to employees who are not entitled to unemployment compensation under the Colorado Employment Security Act ("Act").(fn2)
Many employers resist litigation of unemployment compensation claims because the Act is liberally construed in favor of the employee.(fn3) However, the guiding principle of the Act is to provide benefits to only those employees who are "unemployed through no fault of their own."(fn4) The General Assembly specifically recognized that a full award of benefits is inappropriate where "certain acts of individuals are the direct and proximate cause of their unemployment."(fn5) Consequently, the key question in a separation case is whether the unemployment is voluntary or involuntary. If the separation was voluntary on the part of the employee, most likely there are statutory grounds for resisting the payment of benefits.
The employer's first notification of an unemployment compensation claim is upon receipt of a Notice of Potential Charge from the Division of Employment and Training ("Division"). Space is provided for the employer to submit information pertinent to the separation. An employer who fails to respond to the notice is precluded from later contesting an award of benefits.(fn6) The employer must act promptly; the statute affords only twelve days from the date the form is mailed for the response to be received by the Division.(fn7) Additional information may be presented out of time only for good cause shown.(fn8) Regulations require that any request to file out of time be supported by an affidavit stating the reasons for the untimely action, the facts supporting the reasons and a specific request for leave to file out of time.(fn9)
Upon receipt of the information, a deputy makes an initial determination as to the validity of the claim. The deputy's Notice of Decision is mailed to the employer. If dissatisfied with the deputy's decision, the employer has fifteen days to request review of the deputy's decision by a hearing officer.(fn10) Only about one-third of the decisions made by deputies are appealed. Consequently, a timely response by an employer which results in denial of benefits may be dispositive of the claim.
If the employer requests a hearing or receives notice that a hearing will be held, the theory of the case should be fully developed. Because the hearing is a trial de novo, the employer is not restricted to the defense(s) raised in its initial protest or request for hearing.(fn11) In a separation case, there are three general defenses to employer liability under the Act: (1) the...
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