Unemployment Insurance Compensation

Unemployment Insurance Compensation (“UI”) may be available to a worker who, through no fault of his/her own, is separated from employment and is available for suitable work.

Claims produce an initial determination by the Commission.  An Appeal to a Referee, who conducts a hearing, takes testimony and subsequent levels of appeal to the Commission and to the judicial branch.

The employer is not a party to the action but may contest an application for unemployment insurance.

A claimant may be disqualified from eligibility for unemployment benefits if the involuntary separation from employment was a result of misconduct, or if the worker is able to apply for suitable work or fails to accept suitable work, or voluntarily left employment.  Misconduct is defined to include falsification of employment application, violating an uniformly promulgated and enforced workplace rule, damaging property of the employer because of the employee’s gross negligence, working under the influence of alcohol or drugs, refusing to follow reasonable orders given by the employer, jeopardizing the safety of others, or being incarcerated.

If the employee is separated from employment because of unsatisfactory attendance and the worker cannot show “good cause” for that absenteeism, the worker will be ineligible for benefits, unless absence from work arises from the work itself, i.e. a work-related injury.

Even if an injury that is non-work related is the result of the employee’s non-attendance, the employee may be eligible for benefits if he/she can show that he or she had good cause for the absence and that the absence was not his/her fault.

An employee who has been given work restrictions that preclude his/her return to the job may be eligible for unemployment even if no job exists within the work restrictions with the employer.

Frequently Asked Questions:

1.         Can the employer participate in the unemployment proceedings?

ANSWER:     The employer will receive notification that an unemployment claim has been filed that may affect the employer’s unemployment insurance account.  The employer is put on notice that it may protest the claim and the employer will have ten (10) days from the mailing date of the Notice of Claim (Form UI-412A) to protest the claim stating the reasons for the protest.

After the protest is filed, an initial determination is made after a Fact Finding Interview with the parties. Either party to the unemployment action may “appeal” within fifteen (15) days.  A hearing is set with a Referee, particularly a phone hearing, and witnesses may be subpoenaed by either party.  Each party may testify on their own behalf, present documentation and records, question opposing witnesses, and give a closing statement at the end of the hearing.

Either party may hire counsel at their own expense.

2.         What “misconduct” is sufficient to disqualify a claimant from eligibility for unemployment?

ANSWER:     Kentucky law provides specific examples of misconduct.  The most frequent misconduct disqualification occurs because the employee has failed to obey a reasonable and uniformly enforced rule of the employer.  The most uniformly enforced rules include:

  • testing positive for drugs or alcohol
  • adherence to attendance policies
  • in certain instances off-work conduct and
  • non-adherence to employment attendance policies

3.         How should the employer enforce workplace rules?

ANSWER:     There are many good reasons for the employer to prepare and distribute a well-crafted Employment Policy Handbook.  Unemployment insurance is a good example of why such workplace rules are important.

Most employers who prepare company handbooks require their employees to acknowledge receipt of the company handbook in writing.  The handbook typically sets forth general rules relating employment but may also include specific work rules that may be helpful in defending an unemployment claim.

It is highly recommended that an attorney review the company handbook for completeness, accuracy and for effectiveness.

4.         Can an employee who voluntarily terminates their position with an employer receive unemployment benefits?

ANSWER:     Usually a voluntary termination of employment by the employee renders the employee ineligible to receive unemployment benefits if he/she files for benefits.  An exception to this general rule is where the employee may resign but does not do so voluntarily.

Employees who have good cause defined as “when the worker is faced with circumstances so compelling as to leave no reasonable alternative but loss of employment, unemployment may also be available.”  A reduction in pay may also be reason for a voluntary resignation, and an employee may be entitled to unemployment.

Most unemployment cases focus on whether the employee or the employer initiates the separation from employment.

5.         What effect does the unemployment process have on other proceedings, i.e. lawsuits for wrongful discharge and other statutory claims?

ANSWER:     Kentucky law provides that no “findings of fact or law or final order in proceedings for unemployment compensation” would be conclusive and binding on any other proceeding.

Since sworn testimony is taken of the witnesses, the testimony may be used in other proceedings but the finding of the Commission would not be admissible.