Arran's Alley

Watch what they do, not what they say.

Mick Arran

Mick Arran
Location
Savannah, Georgia, USA
Bio
I've done everything from recycling to teaching in a pre-school. Most recently I was for 10 years an acting and theater teacher as well as a pallet builder. I read a lot and I'm an old man who remembers the distant past with somewhat more clarity than this morning's breakfast. I've been blogging for a decade and I don't do "light". If you're looking for recipes, self-promoting displays of items made for sale, titillating stories about how I was a pimp for an afternoon, or the beauties of toasters, you've come to the wrong place. Check the Front Page.

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FEBRUARY 15, 2009 2:51PM

Employer Unemployment Fraud

Rate: 5 Flag

How's that again?

Here's how it works: your employer lays you off because "times are hard, business is down, we have to cut back". You go sign up to collect your unemployment insurance so you can pay some bills and feed your family until you find another job (or the benefits run out). But instead of a benefit check, you find a notice that your ex-employer is fighting your lay-off. According to him, you weren't laid off, you were fired for screwing up or you quit voluntarily. "Huh?" Yeah.

It's an unusual trick, mostly because in disputes the employer almost always loses a claim like that. Documentation is required - one, sometimes two written warnings in an employees' file, signed or initialed by the employee to prove s/he's seen them - that the employer either can't produce because it doesn't exist or has to forge and can't substantiate. But they are so desperate to save money and so sure they can get away with virtually anything after 8 years of Republican-style laissez-faire that more and more are trying it.

It's hard enough to lose a job. But for a growing proportion of U.S. workers, the troubles really set in when they apply for unemployment benefits.

More than a quarter of people applying for such claims have their rights to the benefit challenged as employers increasingly act to block payouts to former workers.

The proportion of claims disputed by former employers and state agencies has reached record levels in recent years, according to the Labor Department numbers tallied by the Urban Institute.

Under state and federal laws, employees who are fired for misbehavior or quit voluntarily are ineligible for unemployment compensation. When jobless claims are blocked, employers save money because their unemployment insurance rates are based on the amount of the benefits their workers collect.

As unemployment rolls swell in the recession, many workers seem surprised to find their benefits challenged, their former bosses providing testimony against them.

***

"In some of these cases, employers feel like there's some matter of principle involved," said Coleman Walsh, chief administrative law judge in Virginia, who has handled many such disputes. But, he said, "nowadays it appears their motivation has more to do with the impact on their unemployment insurance tax rate. Employers by and large are more aware of unemployment as a cost of business."

(emphasis added)

What they're counting on is that many of the people abused this way won't fight back, won't go through the potentially long, drawn-out process of defending their rights in hearings. It's the same numbers game that employers have been playing for years: the accountants say they will make more money (way more) if they don't buy safety equipment and train workers to use it than they will pay out in lawsuits when a certain percentage of workers are killed or injured because of that lack of training and equipment.

Bottom line: it's cheaper to bury a worker than protect him. In this case, it's cheaper to pay somebody to make false claims to the state unemployment investigators than to pay out massive amounts for unemployment insurance.

What they're doing is fraud, btw. It's illegal to forge documents, it's illegal to misrepresent the cause of dismissal to avoid paying higher rates.

Don't let them get away with putting you or your family in jeopardy to feed their greed. Fight. You'll almost certainly win. (Unless you live in a state still run by Republicans, in which case you're probably fucked.)

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Comments

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This is going to get a lot worse before it gets better.
Mick:
You are absolutely correct. People who are unemployed shouldn't have to "prove" anything. It's ridiculous. I wrote about the definition of unemployment several weeks ago and recently re-wrote the column on my main blog along with how we define "foreclosure."

http://13hawks.blogspot.com/2009/02/whats-accurate-unemployment-and.html

Thanks for posting this. It's very important.
This is nothing new, but you're right that with massive layoffs and the state of the economy it will undoubtedly become more routine.

Here's another scam to watch out for (which I observed in an isolated case a long time ago, but it could easily crop up again): Employer sues recently terminated employee in small claims court for petty theft of a trivial amount of money. This is not because the employer cares about recouping the value of whatever they claim the employee stole. This is because the employer hopes the employee won't bother to fight it, since the amount at stake is so small, and the now unemployed former employee has other things to worry about than showing up in court to contest the case.

This is a low risk proposition for the employer. If the employee doesn't show up, the employer gets a default judgment, which they can then take to the unemployment bureaucrats to use as "proof" that the employee was fired for cause, and therefore is not eligible for unemployment. Even if the employee does show up, the employer may win if the judge isn't wise to the scam, and the employer still gets the judgment they can use to contest the right to unemployment. And if the employee wins, the employer isn't out anything other than court costs; they can still try to contest the right to unemployment on some other basis, and since they owed it anyway, it was worth a try to avoid paying it.

MORAL: If you are laid off and your employer sues you, DO NOT ignore the lawsuit, even if it is for very little money. Go in there and contest the hell out of it. Bring former coworkers in to back up your story that you are an honest person and the employer has ulterior motives for claiming otherwise. Make sure the judge understands that there is a lot more at stake here for the employer than just the amount demanded in the small claims case (i.e., the employer has a motive to lie).
Mick, You are performing an important public service alerting people to this abuse. It happened to me, and I was shocked and scared. I fought it and my past employer didn't bother to show up at the hearing.
You know, I had a former employer try to pull that lawsuit scam on me and they also tried to contest my unemployment.

What I did is turn to my brother, who is an attorney, and we countersued. And we didn't just sue the company. We filed suits against my boss, his boss, the CEO, the HR rep for my division, her boss, and the HR director for the company.

We very quickly got a call from the company's legal department offering to drop the lawsuit and the fight against my unemployment benefits if we'd drop our lawsuits.

Of course, they then tried to keep the last commission check I earned but one quick phone call from my brother to their legal department and they had the funds in my bank account the next day.
I read about this. Just makes me sick.
Does anyone know the penalty in Maryland for an employer who lies during an unemployment hearing? Not only did the employer lie about why I was fired (gross misconduct), but the accuser (who did not attend both meetings) falsified claims on negative write-ups that I refused to sign before I was fired a few days from returning from FMLA. In one case, I was written up for missing a deadline for a day I was at work--and it was a deadline for one of my class assistants! Even the hearing examiner asked why there were no documents supporting "fact" that I was a menace to staff and students.

Like the guy who had his brother attorney represent him, I am seriously considering filing civil suits against those who trumped up charges before I was fired and up until that point.

BTW, great comments!
CORRECTED POSTING!!
Does anyone know the penalty in Maryland for an employer who lies during an unemployment hearing? Not only did the employer lie about why I was fired (gross misconduct), but the accuser (who did not attend both meetings) falsified claims on negative write-ups that I refused to sign before I was fired a few days from returning from FMLA. In one case, I was written up for missing a deadline for a day I was NOT at work--and it was a deadline for one of my class assistants! Even the hearing examiner asked why there were no documents supporting "fact" that I was a menace to staff and students.

Like the guy who had his brother attorney represent him, I am seriously considering filing civil suits against those who trumped up charges before I was fired and up until that point.

BTW, great comments!
I just went to a hearing and my exboss lied under oath. He tried to also have my CalCOBRA benefits denied by saying I left voluntarily. He admitted to the judge that was a mistake, since it conflicted with his statement I was terminated due to lack of experience, etc. He was also trying to have me denied unemployment for misconduct. He is a real slime and should lose his CPA license.
I got "laid off". Because there wasn't enough money in the company and since I was the youngest I was first in line to fight the bullet. According to what was said to me by my boss on my last day, after I clocked out of course and stepped out to the parking lot. So, later that night I filled out my unemployment application and two weeks later I started receiving benefits. Month after it checks stopped ended. The unemployment office called and said that my ex-employer is indicating that I was fired because of committing fraud and because I was late all the time for like seven years. he he.. That just sound funny as I'm writing it. It's funny but it's true. That bastard! Obviously I wasn't committing any kind of fraud and I was late on occasion but not every day. Half the people in that company come in when ever they feel like it. But I get looked at funny when I come into the office 5 minutes late. Plus I would always inform my manager if I'm coming in later than anticipated. I would say probably 2 out of 10 days I would come in 5 to 7 minutes late. Anyway apparently some kind of forged document was faxed in to the unemployment office and my benefits are frozen. Tomorrow is my 2nd interview. I will know more. For now, it's just crazy how greedy old rich people are. I hope there will be justice.
A few days before I went on vacation, the boss informed me that he was cutting our lead mechanic's pay because payroll was to high. The day before I left he brought in a new girl to "cover" my position while I was gone. (Repair shop: one person office - me). Didn't think to much about it because I know the boss doesn't like to do my job when I'm out and it was a family member with no experience. I received several phone calls from lead mechanic while I was out saying that he was continuly sent home. When I returned from vacation, the new girl was still there. I figured she was going to go over what she did with me and that was that. At noon, the boss came in and told me my hours would now be 20 instead of 40 and my pay was dropped from 15hr to 10hr. He said payroll was to high and he had been carrying the shop for a while. As you can imagine, I was so stressed it made me sick so I called in the next day. (keep in mind that I have been there 5 1/2years and rarely took a sick day). I came in the next day and was told I would work 8-12 and new girl 12-4:30. Here's the kicker: He has been paying another mechanic off the books and now paying her off the books. I was contacted every morning telling me not to come in that they did not need me. Today is day 5 for unemployment waiting period and like evey morning, I texted him to see if I was working. He told me to call the office. Office doesn't open til 8am. So I went because I did not want him to say I was late. New girl had no idea so she called him. He told him no work but I should come in tomorrow to sign papers. What papers could he possibly have to sign??? I have been there for 5 1/2 years and never been written up or a verbal warning. What do I do? I can't afford to quit but I can't stay there if that's what he wants. I'm afraid he has taken this time that I've been off to come up with a sceme to fire me. I have put my health and my family in front of this job and for what? To get screwed by this scumbag??? Please respond if you have any advice!!!!!