|Can My Old Employer Appeal My Approval for Unemployment Benefits?||
Last updated: December 2004
The following question was submitted to John Roska, an attorney/writer whose weekly newspaper column, "Q&A: The Law," runs in the St. Louis Post-Dispatch (Illinois Edition) and the Champaign News Gazette.
I applied for unemployment after losing my job, and was approved at first. Then, my old employer appealed, and I was found to be ineligible. Now I have to have a hearing to see if I'm eligible. Why does the employer get to appeal my case? Since the benefits are paid by the State, why does the employer care if I get unemployment?
Unemployment benefits are paid indirectly by your old employer, through taxes. They're not paid directly from your employer to you, as some people think. But your benefits do come out of what employers pay in State taxes.
Employers care about their tax rate, which is based on how often their employees draw unemployment. They get to appeal unemployment claims to try to keep their tax rate low.
Employers pay a State unemployment tax on their payroll. Unlike Federal, State, and Social Security taxes, unemployment insurance taxes don't come out of your paycheck. The unemployment tax is paid entirely by the employer.
The unemployment taxes that all employers pay create the money pool that pays your benefits. Federal money pays to administer the program.
The unemployment tax rate is set by the Illinois Department of Employment Security. The lowest rate is 0.6% of payroll, and the highest is 6.8%. For small employers (less than $50,000 in wages in a calendar quarter), the maximum rate is 5.4%. This compares to Indiana's rates of 0.2% to 5.5%.
A particular employer's unemployment tax rate is based on their "experience rating." That rating is determined by how many unemployment claims are paid for that employer. The more the paid claims, the higher the tax rate. The construction industry, for example, has one of the highest rates, given its seasonal and uncertain nature.
That experience rating is why your employer cares about your claim for benefits, and why they get to appeal. If your claim is denied, it won't be counted against their experience rating. Keeping that experience rating low keeps the employer's tax rate low. And the less the employer pays in taxes, the more they can pay you. (Or keep for themselves, if they prefer.)
Employers who want to protest a former employee's claim for benefits must file a "Notice of Possible Ineligibility" within 10 days of getting notice of a claim. If they do, they're a "party," and can appeal an approved claim. If they miss the deadline, they're still asked for information and evidence about the claim, but don't get to appeal if it's approved. The fact that your eligibility for benefits was reversed means the employer in your case is "party" who could appeal.
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