Losing an employee is difficult and can create disarray in your company structure, not to mention added stress when it comes to finding and training a replacement. The last thing you need is a former employee filing a fraudulent unemployment claim against your company.
To protect yourself, it is important to have someone on your side. A PEO (Professional Employer Organization) company will have the resources and experience needed to quickly identify fraudulent claims and help find a resolution. Here are five common fraudulent claims that a PEO can help you resolve:
1. Lying About the Cause of Termination
The simplest and most frequent form of unemployment fraud is simply lying on the application. In most states, unemployment insurance is limited to those who were fired without cause by their employers. Those who had violated company policies, or willingly left the company, typically do not qualify for unemployment insurance. They file with the hope that no one will investigate the claim. A PEO company will automatically verify the cause of unemployment and respond accordingly on your behalf.
2. Concealing Income Sources
Unemployment benefits are tied to an employee’s previous wages and current income levels. A common practice among fraudulent filers is to try to conceal spousal income or other potential earnings. A PEO company will perform a discrete investigation of the claimant and determine if they are in a better financial state than what is stated on the application. If it turns out that the claimant lied, your unemployment insurance company and the appropriate authorities will be notified.
3. Concealing Medical Condition
Unemployment insurance is a gateway to a wide variety of government benefits, including long-term disability. Individuals having a hard time finding employment might attempt to file for disability in order to extend their unemployment benefits. With every claimant, your insurance rate will increase, making such fraudulent filers a destructive element on your bottom line.
4. Claiming Discrimination
Those that do not qualify for unemployment may try to overturn the decision by claiming discrimination on your part. A former employee can maintain access to unemployment benefits if the business arrangement is terminated due to civil rights violations.
A PEO company will work diligently to guarantee that you have the policies and paperwork in place to shield yourself against fraudulent claims such as these. The only way to truly defend yourself is to document every meaningful policy and encounter between the former employee and management. When employment is terminated, a PEO company will sit down and record the cause for the termination from the employee’s perspective. This will be of great use if the employee decides to claim discrimination later.
5. Claiming Unprofessional Conduct
In many states, it is legal for an employee to leave a hostile work environment and still claim unemployment. When filing a claim, the burden is on the employer to disprove the allegation of a poorly managed worksite. A PEO company will work with you to create a vibrant work environment and make sure you have the correct documents in place to avoid these situations.
When handling any unemployment insurance claim, time is of the essence. A PEO company will help you distinguish between a valid and fraudulent claim – saving you time and money.
