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5 Facts about Unemployment Benefits

This month, as 2014 comes to a close, we are taking a look back at some of the most important blog topics we have covered both in case you missed them, and to help you prepare for 2015!

If you lose your job or your employer lays you off, you may be able to get unemployment benefits. The payments may be a welcomed relief. But you should know that they’re taxable.

Here are five important facts from the IRS about unemployment compensation:

  1. You must include all unemployment compensation in your income for the year. You should receive a Form 1099-G, Certain Government Payments. It will show the amount paid to you and the amount of any federal income taxes withheld.
  2. There are several types of unemployment compensation. They generally include any amount received under an unemployment compensation law of the U.S. or a state. For more about the various types, see Publication 525, Taxable and Nontaxable Income.
  3. You must include benefits paid to you from regular union dues in your income. Different rules may apply if you contribute to a special union fund and those contributions are not deductible. In that case, only include as income any amount you get that is more than the contributions you made.
  4. You can choose to have federal income tax withheld from your unemployment. You make this choice using Form W-4V, Voluntary Withholding Request. If you do not choose to have tax withheld, you may have to make estimated tax payments during the year.
  5. If you are facing financial difficulties, you should visit IRS.gov. “What Ifs” for Struggling Taxpayers explains the tax effect of events such as the loss of a job. For example, if your income decreased, you may be eligible for some tax credits, such as the Earned Income Tax Credit. If you owe federal taxes and can’t pay your bill, contact the IRS as soon as possible. In many cases, the IRS can take steps to help ease your financial burden.

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The Disciplinary Meeting & Discussion

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The following steps are important to follow every time you begin disciplinary action with an employee.

  • State the standard or policy.
    • It is important to the DOL that upon hire, the employee is made aware of the standard of work that is required of all employees. 
    • It is equally important to the DOL that the employee is aware of all company policies upon hire. 
    • Because of this expectation, when a former employee files a claim for unemployment benefits, the DOL always asks the employer whether or not the claimant was aware of the company policy they violated. The employee should already understand standards and policies. During a disiplinary discussion, it is important to reiterate this information.
  • Refer to specific conducts and incidents, not “attitude” or “opinions”.
    • When reviewing unemployment insurance (UI) claims, DOL Claims Examiners only look at relative ‘incidents’ when determining eligibility of benefits. 
    • Whether or not a claimant is awarded UI benefits has nothing to do with attitude or opinions.
  • Describe the effect of the violation on the business and/or other employees.
    • This is important, the DOL always wants to know how the employee’s actions affected the business.
    • If the employee merely annoys you, but can perform their duties up to standards and have no direct effect on the business; if you terminate them without just cause, they can be awarded benefits. 
  • Make clear the consequences of future violations. Will further poor performance put their job in jeopardy?
    • Whether or not the employee knew their job was in jeopardy is an important factor in a Claims Examiner’s determination.
    • It’s important that the employee understands that they could lose thier job, otherwise, they have no chance to change the behavior and improve-thus becoming eligible for UI benefits.
    • They need to understand that they may lose their job, and then you must allow an adequate amount of time for improvement. Ask your HR Strategies Human Resources Consultant more about that time period. 
  • Review the Disciplinary Report with the employee.
    • These forms show that there was a disciplinary session, that the employer put an action change plan into place, and that the employee understood that they needed to improve and agreed to follow the action plan. 
    • These forms are MAIN FORMS OF DOCUMENTATION that are essential during unemployment insurance cases.
  • Have the employee sign the report to acknowledge the discipline.
    • This proves understanding and shows the employee agrees with the changes they will have to make to keep their job.
    • Keep these in the employee’s file.

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