In most cases a worker is eligible for unemployment insurance if the employee is discharged through no fault of their own or if the employee resigns for good cause based on some action or omission of the employer. Benefit amounts are based on the employee’s past earnings. These eligibility standards apply in most states. If an employee has worked outside of Vermont for a period of time but has worked in Vermont for part of the previous eighteen (18) months, the worker is eligible to apply for unemployment benefits in Vermont. If a worker has any doubt, he or she should apply for benefits by calling the Vermont Department of Labor toll-free 1-877-214-3330. The Vermont Department of Labor administers the unemployment laws in Vermont. Detailed information on unemployment benefits and other state labor laws can be found at www.labor.vermont.gov.
After a claim is made by a former employee, the Department of Labor will gather information concerning the employee’s termination through documents provided by the employer and employee and information gathered by telephone. Thereafter an initial determination will issue as to whether or not the employee is eligible for benefits. After this decision, the losing party will have the right to appeal the decision to an Administrative Law Judge (“ALJ”) who will hold a telephone conference which is much like a mini-trial where both parties participate at once, have the right to provide testimony of witnesses, cross examine the other party’s witnesses and introduce documentary evidence. Both parties have the right to counsel in the hearing before the ALJ. Once the ALJ issues a decision, the losing party may appeal to the full Employment Security Board which will not take new evidence but will review the transcript of the hearing before the ALJ, the documentary evidence, applicable law and the oral arguments of the parties.
It is important to keep in mind that unemployment benefits are designed to provide the employee with a basic financial bridge to their next job. It is not a genuine test of whether or not there was a “wrongful discharge” as the law is designed to pay benefits in the ordinary course as part of the “safety net” implemented through the Social Security Act. In fact, in almost all cases nothing that takes place during the unemployment process or any findings that the Department of Labor makes are admissible into evidence in a later wrongful discharge proceeding before a court or administrative agency. When an employee qualifies for benefits the employer’s experience rating will increase and this may affect the percentage of unemployment insurance tax based on an employer’s total payroll. Therefore the employer does not pay for the full amount of the benefit (there are exceptions among public employers) but just a fraction of the cost in an increased unemployment tax.
If an employee is laid off due to economic reasons or fired for unsatisfactory performance, the worker is ordinarily entitled to benefits. The following reasons for a termination are not disqualifying according to the Department of Labor:
- An argument between the employee and employer
- A difference in work habits
- An unintentional mistake
- A temporary lapse of sound judgment
- A single instance of bad behavior.
On the other hand, if the employee is terminated for “gross misconduct” the worker will be disqualified for benefits and will have to go back to work, earn six (6) times the worker’s benefit amount and is terminated by the next employer through no fault of their own in order to re-qualify for unemployment.
The burden is on the employer to establish that the employee is ineligible for benefits by proving they engaged in “gross misconduct.” Gross misconduct is defined as a deliberate disregard of the employer’s interests after at least one warning is issued. Obviously, if a worker punches a supervisor, steals from the employer or engages in other egregious misconduct, or commits arson they will usually be found to have engaged in gross misconduct without the need for a prior warning. The Department of Labor will focus on whether or not the employee’s actions were deliberate or intentional.
This is where evidence of a prior warning to the employee is critical for the employer’s case. The Department of Labor wants to see that the employee knew that their conduct was wrongful and yet deliberately continued to engage in that behavior. The warning given must be issued for the same offense for which the worker is fired. Therefore, if an employee is written up for persistent tardiness but is fired for violating a safety rule, that written warning will not help the employer’s case.
The employer must keep detailed records, such as copies of prior warnings, written, dated and signed by the employer and, ideally, the employee. Oral warnings should also be memorialized in the employee’s file in a writing dated and signed. The written warning should clearly identify the unacceptable behaviors, give specific recommendations on how to improve and state that if the behavior continues the employee will be terminated. In certain circumstances written statements from co-workers who may have witnessed the behavior are advisable. If there is some concern of a future wrongful discharge lawsuit, the employer should consult with counsel before preparing witness statements or submitting material to the Department of Labor.
Each case is decided on its own facts so it is difficult to give black and white examples of disqualifying gross misconduct. However, provided there is a written record of warnings, a worker who persists in refusing to wear a VOSHA mandated ventilator or comply with other safety rules are examples of gross misconduct, exposing the employer to VOSHA fines and citations. Other examples include an employee who persistently lies, surfs the web instead of working, or deliberately fails to satisfy employer attendance requirements without excuse.
In limited cases an employee who quits may be eligible for benefits if he or she quits for “good cause” attributable to the employment. In these cases, the burden of proof is on the employee to show there are substantial reasons which forced the employee to quit. First, the employee must show that he or she brought the issue to the employer’s attention and the employer failed to remedy the situation. Secondly, the employee needs to prove that there are significant reasons why he or she could no longer work under these circumstances. For example, where an employer/owner touches an employee in a sexual manner or engages in sexual harassment which does not stop after an employee complaint, the Department of Labor has found these facts to be sufficient to be good cause for quitting, entitling the employee to unemployment benefits. A severe cut in pay, workplace bullying or a significant change in duties may also qualify.