Pa Unemployment Question

[Paolo]

Advertisement Expert: Brian Phillips - 1/31/2011 I have been working at my current company for 1.5 years for the same CEO that was at my previous company(4 years total). I am his executive assistant as well as the office manager. After many months of being dissatisfied with a stressful, unrewarding position, I spoke with my boss. He has been very unhappy with my performance and was planning on speaking with me about the same issues.  He suggested I could start looking for another job and they would keep me employed until I find something else.  I told him that I plan to go to graduate school in May and therefore it wouldnt make sense for me to get another job for 3 months. I told him that I would be happy to be "let go" once they find a replacement for my position if it would be possible for me to collect unemployment. He responded that we could work something out, but that he would like me to do some kind of part time work so that they get something out of me collecting unemployment if they have to pay for it.  My question is whether my boss/the company would actually be paying for unemployment or if that money already exists because they have to contribute money every month. I am very stressed out and looking to get away from the company as soon as possible, but I think it seems ridiculous to have to agree to working for my boss part time in order to be +let go" and collect unemployment. Any advice you could give me on this would really be appreciated.

ANSWER: Alexis,

Employers and employees pay unemployment taxes in Pennsylvania on earned gross wages.   In regard to your question, the employer will pay an Unemployment tax on the first 8,000 each employee earns.  This tax goes into an account and the employer can never get it back- regardless of whether you have people collecting UC or not.   So, don't think of it like an unemployment piggy bank- it is cash paid out that the employer NEVER gets back under any circumstances.     So, the tax money in the account is the "reserve" and would be used to pay out the claims from people who work at the company.  Generally, the employer's UC account would have more money in there than what is paid out.  If the UC pay outs are more due to people collecting from the account then the unemployment rate will increase and the employer pays a higher UC tax on ALL employees to offset a potential for a negative balance.   Think of it like this-  a landscaper who lays off his crew for the winter to collect UC until the spring will pay a higher UC tax rate than an accounting office with steady work and low likelihood of separating employees.  

So, it is likely there is a reserve of UC funds in the employer's account to pay out UC claims,  but whether there is or isn't,  it really is a mute point.   It is also a false argument to suggest a condition that you must work part time for the employer to let you collect.    Actually, the employer doesn't make these decisions- it is made by the laws in Harrisburg.   You and your employer only provide information on the details of the separation then the laws determine if you are eligible to collect UC.  

I understand you and the employer are trying to work out a deal so they will LET YOU collect unemployment and you all come out ahead.   Whether you agree to work part time-  or not-  is a completely separate issue from whether you would ever be entitled to collect unemployment.    Just so you know-  you ARE NOT ELIGIBLE under PA law to collect unemployment due to the circumstances leading to your separation from employment as you outlined it.  

Being unhappy at your job, or agreeing to make a deal to allow someone to collect when they are not eligible by law are not reasons that don't qualify for UC benefits.  I will go out on a limb to suggest the only way you would or could open a claim under these conditions is if either you, your employer, or both of did not tell the truth when filling out the State's UC paperwork.   It is not good to "stretch the truth"(lie?) about your separation in order to collect UC.  This is also called fraud.. and punishable..

I hope this helps.  Not the answer you wanted; but the truth nonetheless.  If you need a more specific answer on a follow up question,  just reply.

Good luck and success at Grad School.

Brian Phillips

Harvis, Inc.

Human Resource Services and Outsourcinghttp://www.HARVIS.org

---------- FOLLOW-UP ----------

Thank you for your quick response.  I would be applying for unemployment because my employer is letting me go because he does not feel I am doing the job that he wants and would like to hire someone new. It just happens to be that I hate the job and don't mind that he wants to let me go. Does that not qualify for unemployment if I lose my job because my employer doesn't think Im right for the position?

ANSWER: Alexis,

Yes, if the employer indicates you were laid off due to your performance being no longer satisfactory, then that would grant you eligibility for UC.  

The decision must be due to the employer's action to let you go- then you and the employer will get the results you anticipated.   The fact you and the employer may have collaborated on this for a while is a different issue altogether.    Going into details in this situation with PA UC would only complicate things and encourage them to ask you both more probing questions.  

FYI.....   When you go to school- you would not be eligible to continue collecting UC unless you also remained ready and eligible to work.  UC in this regard is only intended for people who are ready and willing to work.   If you can work and attend grad school, then fine-  collect UC and take classes at the same time.   But if you attend grad school and say you are too busy to work and go to school, then you would not be eligible to collect UC.   OF course, I understand this can and does happen..  I'm not a pollyanna on UC issues...

Whatever happens, I am just illustrating the nuances of UC as it can become complicated in how the laws are interpreted in different situations.   

Good luck and success,

Brian Phillips

Harvis, Inc.

---------- FOLLOW-UP ----------

What would you recommend to be the best way to explain where the money for Unemployment comes from? My boss does not understand the process and does not want the money to come from his business.

[Vincenzo]

Alexis,

Many employers aren't sure how to navigate the system and UC laws.   That is where "experience" comes in.  Personally,  I have been to about 50 UC hearings and hundreds of unemployment cases over the years.   I never stop learning...     Here are a few sources:

First is the UCP-39 Employer's Guide to Unemployment in Pennsylvania:http://www.portal.state.pa.us/portal/server.pt?open=514&objID=598475&mode=2

Next is the UCP-40  and is all about how to control your unemployment costs:http://www.portal.state.pa.us/portal/server.pt?open=514&objID=598477&mode=2

The owner can read the informationonline;  or print a copy using the .PDF icon at the top of the page.  

At this portal, there is much more information too-  but this would be a good start.

Enjoy.

Brian