10 Common Misconceptions About Unemployment Insurance

As an attorney who has practiced in the niche area of unemployment insurance law for several years, I have noticed two things.  The first is that many people think they know everything about unemployment insurance law, often based on “common sense” or things they have heard from others.  The second is that very few of them actually do.  The various statutes, regulations, and administrative and court decisions that govern unemployment insurance in New York impose many rules on claimants and employers that often seem counterintuitive or even unfair.

The following are ten of the most common misconceptions about unemployment insurance that I have heard from clients, family, friends, and even other attorneys:

  1. An employee who quits is not eligible for unemployment insurance benefits.  An employee who quits with “good cause” is eligible for unemployment insurance benefits.  While virtually every employee who quits thinks that he or she had a good reason for quitting, “good cause” is a legal term under the unemployment insurance law.  It is not defined in the statute or regulations, so the New York State Unemployment Insurance Appeal Board and the courts have defined “good cause” on a case-by-case basis.  Some examples of “good cause” include changes in the terms and conditions of employment promised at the time of hire, medical reasons based on advice from a doctor, and continuing harassment by a supervisor after complaints have been made to the employer.
  2. An employee who is fired is eligible for unemployment insurance benefits.  An employee who is fired for “misconduct” is not eligible for unemployment insurance benefits.  Misconduct has been defined by the New York State Unemployment Insurance Appeal Board and the courts as a “volitional act or omission that is detrimental to the employer’s interests.”  Not every lawful firing or firing for “good cause” is “misconduct” under the unemployment insurance law.
  3. Employers decide whether their former employees receive unemployment insurance benefits.  Only the New York State Department of Labor can decide whether a claimant receives unemployment insurance benefits.  Employers cannot grant or deny unemployment insurance benefits to former employees, but they can protest claims made by their former employees.  The Department of Labor investigates claims and makes an initial determination, based on the information gathered from the claimant and his or her former employer.
  4. An employer and employee can agree that the employee will receive unemployment insurance benefits.  Employers often informally tell employees that they will be eligible for unemployment insurance benefits or encourage them to apply for unemployment insurance benefits.  Employers and employees sometimes make private agreements regarding unemployment insurance benefits in severance agreements.  While these private agreements may be enforceable as contracts, they do not affect a claimant’s eligibility for unemployment insurance benefits under the unemployment insurance law.  Regardless of any agreements between the employer and employee, the Department of Labor will make its initial determination based on its investigation of each claim.
  5. An individual who is employed, but earns less than his or her weekly benefit rate, is eligible for unemployment insurance benefits to make up the difference.  An individual who earns more than his or her weekly benefit rate is ineligible for unemployment insurance benefits, regardless of the number of days or hours he or she worked.  However, the opposite is not always true.  Eligibility for unemployment insurance benefits is based on the number of days worked each week.  An individual who works (even for an hour or less) four or more days in a week is ineligible for unemployment insurance benefits, regardless of how much he or she earned.  An individual who works one, two, or three days in a week, but earns less than his or her weekly benefit rate, may be eligible for unemployment insurance benefits at a reduced rate.
  6. An individual who is employed part-time is eligible for unemployment insurance benefits for days or hours that he or she does not work.  In New York, eligibility for unemployment insurance benefits is based on the number of days of total unemployment in a week.  The total number of hours of work per week or per day is irrelevant.  An individual who works zero days in a week can receive the maximum benefit rate.  The benefit rate is reduced for individuals who work one, two, or three days in a week.  An individual who works four or more days in a week is ineligible for unemployment insurance benefits.  For the purpose of this calculation, “work” means any work, regardless of whether it is one minute per day or eight hours per day.
  7. An employee who was fired for “good cause” or who was an “at-will” employee is ineligible for unemployment insurance benefits.  An employee who is fired is ineligible for unemployment insurance benefits if he or she was fired for “misconduct.”  Just because a firing is lawful or justified does not mean that it is considered “misconduct” under the unemployment insurance law.  When the New York State Department of Labor or Unemployment Insurance Appeal Board determines that an employee who was fired is eligible for unemployment insurance benefits, it does not necessarily mean that the firing was unlawful or unjustified.
  8. “Good” employees are eligible for unemployment insurance benefits, and “bad” employees are not.  Eligibility for unemployment insurance benefits is based on the final incident that caused the employer-employee relationship to end, not on an employee’s entire history with an employer.  This means that an employee who has worked for an employer for many years, received promotions, and won awards may be ineligible for unemployment insurance benefits if the final incident is disqualifying.  Conversely, a lazy employee with a long disciplinary history may be eligible for unemployment insurance benefits, if the final incident is not disqualifying.
  9. Eligibility for unemployment insurance benefits is based on financial need.  Although unemployment insurance benefits generally help unemployed individuals cover living expenses while they search for their next job, financial need is irrelevant to an individual’s eligibility for unemployment insurance benefits.  For example, a claimant who is otherwise ineligible will not be granted unemployment insurance benefits because he or she desperately needs the money to avoid hunger or homelessness.  Conversely, a claimant who is otherwise eligible will not be denied unemployment insurance benefits because he or she has thousands of dollars in savings and would use the additional money to take a vacation.
  10. Employees contribute to the unemployment insurance system by paying taxes.  Only employers contribute to the unemployment insurance system.  Although employees have income and payroll taxes withheld from their wages, these are not contributions to the unemployment insurance system.

This is just a sample of the many issues that can arise under New York’s unemployment insurance law and is not a substitute for legal advice.  If you are seeking legal advice or representation related to unemployment insurance in New York, contact Korder Law.

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