The Power of Employers

Many individuals who are eligible for unemployment benefits do not actually collect them. While we cover many of the reasons why this happens throughout the report, what we did not anticipate in our interviews was how much employers impact workers’ ability to access and receive unemployment — and even determine the validity of an unemployment claim.

In a 2016 report, Alix Gould-Werth highlighted the ways in which employers and workplace environments can shape workers' access to UI and affect their decision to pursue benefits. The research found that while we typically think of the claims process for benefits as occurring entirely between the state and the applicant, in the case of UI, worker behavior is, "shaped by the workplace institution. Workers’ access to UI may depend as much on their personal relationships with supervisors as with their transactions with street-level bureaucrats, on information provided by their employer rather than information provided by the government, and on the structure of their work as much as their level of labor force participation." The report categorized workplace environments as facilitating, silent, or blocking — all of which, "impede or facilitate benefit access in a distinct manner."

In the best-case scenario, our interviewees’ employers reviewed with them what benefits they were eligible for, assisted them with their applications, and even ensured that they wouldn't contest their UI claims. For temporary or gig workers, these “non-traditional” jobs can introduce a lot of confusion about which programs a worker might be eligible for, if any. In these cases, support —and even encouragement— when applying for pandemic unemployment benefits went a long way. But our interviewees also shared horror stories highlighting inaccurate employer-contested claims, fear of retaliation, and more.

Ways Employers Keep their Employees from Collecting Unemployment Insurance

Contesting unemployment insurance claims. When employers contest UI claims, it is often to keep their experience rating, or the taxes they pay into the UI system, from increasing. To be eligible for unemployment insurance, an individual must stop working through no “fault of their own”—most often meaning they did not quit or were not fired. How is this determined? Usually by verifying the claim with the employer. This puts employers in a powerful position: if they contest a claim, it is hard for an employee to counter their word. This means that they can keep an employee from collecting benefits. It can even chill them from applying in the future.

As we noted earlier in our report, Mique declined to take an extra shift because his second child was due at any point. When his employer told him not to come back to work, Mique filed for unemployment. He discovered two weeks after receiving benefits that his employer saw his decline for overtime as insubordination. In his letter from the unemployment office, Mique was told he “falsified information in his application and that he got fired from his job… and that was the first we heard of him being fired,” said Inez. “We knew it wasn’t true but there was no one to back him.”

One segment in that letter scared them from ever applying for UI again: “It said that if we tried to apply again, even though it would be a fresh application, the new application would say that he lied in the past and they would do an investigation to see whether [his new claim is] legitimate.”

This letter was sent three years ago; and now, when they could have used the extra financial support for themselves and their three children, they chose not to apply. Mique caught COVID and lost work hours. Inez held faith that his current employer would have supported his claim, but still, they opted out simply because, “by the time it would take to get the approval after the investigation, he’d already be back at work.”

Job instability creates room for intimidation. Workers with less job stability fear the potential of straining their relationship with their employer by filing an unemployment insurance claim. “I know that they would prefer me to work and I don’t want to create conflict,” said Edna, a Chicago-based home health-aid who gets her assignments from a healthcare staffing agency. After the pandemic hit, the elderly client with whom Edna worked decided that having an aid posed too much of a risk, and Edna was let go from that assignment. “I still work, though my job is at a standstill,” she said. Edna had no income but saw herself as working because she was on call — if the agency called her with an assignment, she’d be available to take it. She is among the many workers in “zero-hour contracts,” still on the payroll but not being given any work.

Edna expressed concern about upsetting the agency that finds her jobs, worried that speaking up might result in them not calling her into work as frequently. It’s not uncommon for employers to punish low-wage or temporary workers by reducing their hours or assigning them erratic shifts, often referring to them as “hard to work with” or “difficult”.

Immigrant workers, who may be eligible for unemployment benefits, might also face intimidation or retaliation in the workplace. Gloria, a green card holder who works as a janitor at an entertainment venue in Brooklyn, expressed concern about losing her immigration status when applying for unemployment insurance. Though green card holders are eligible for UI, a lack of clarity and information from employers can lead to fear and confusion about the process.

Pressuring or withholding information from employees so that they work, despite their fears of being exposed to the virus. To be eligible for unemployment insurance, workers cannot deny “suitable work” when it is available. For many individuals today, working during the pandemic feels scary and presents a real health risk. Whether those fears are sufficient to deem work unsuitable is up for debate, with the Labor Department recently issuing a letter clarifying that jobs that might unreasonably expose a worker to COVID-19 could be deemed “unsuitable work." Still, many employees assume that if their employers call them back to work, they have to go back. They worry that if they don’t show up to work, they may harm the relationship that they have with their employer. They also believe that by choosing not to work—even for health reasons—that they would forfeit eligibility to collect unemployment insurance benefits.

There are also employees whose employers withhold information to get workers to show up on the job. Nakita, a certified nursing assistant (CNA) from Chicago, said she had been working for a continuing care retirement community that had not been forthcoming with the COVID-19 cases within its facility. If she had known how many infections were found at the facility, she’s not sure that she would have stayed as long as she did.

She left her position when Illinois issued its stay-at-home order in March because she didn’t want to potentially expose her family to COVID—especially her mother, who is immunocompromised. The chances of that happening were high, she said, since she worked closely with a population susceptible to the virus. She asked in her July interview: “Why do I have to jeopardize the health of everyone around me—my children, my mother, my fiancé, and even those I work with?”

Radhiya, along with her husband, faced similar concerns. In her July interview, she shared that her husband left his position at a major retail chain because he was afraid of contracting the virus and spreading it to the family—in particular their four children, two of whom had caught the flu in February. When we asked if he had applied for unemployment, she said no. He didn’t trust the system because of his past experience applying nearly two years ago, when he was approved and collected unemployment for two months. He later received a notification from the Illinois Department of Employment Security (IDES) that he had been overpaid and was told to pay back a “ridiculous sum,” Radhiya said. “He basically said to me: ‘Why would I apply and have them do me the same way, and end up going through the same thing again?’”

Employer filed claims don’t always benefit workers. Employer filed claims work well enough in practice. Workers that have been laid off or had hours reduced but remain “job attached” (meaning the employer intends to rehire them) might benefit from employers submitting claims on their behalf, thereby speeding up the eligibility verification and overall process. But in reality, employer-filed claims can create additional obstacles for claimants waiting to receive their benefits—from missing weekly recertifications to inputting incorrect information. Often, workers have little visibility into these employer-filed claims, or might submit their own claim due to a lack of clarity from their employers, creating additional processing issues. Ultimately, nobody is more invested in making sure UI applicants receive their benefits than the applicants themselves. Even when employers are wanting to do right by their employees, some find they are too overwhelmed or lack sufficient knowledge about the process.

When furloughed in May from his position as an athletic facilities manager at a local college, Donald said his employer notified him about his eligibility for UI but didn’t share much beyond that point when it came to the overall process and next steps. “HR gave us information, but they didn’t have answers a lot of the time,” said Donald. When he hadn’t heard back on the status of his UI claim, he emailed his HR representative who “brought in a liaison from the unemployment office,” he said. That liaison told him that his contact information would be sent to the state’s Office of Unemployment Insurance Operations which would result in a quicker response to his queries, than being placed in a queue. “But I’ve never heard back from them.”

In the end, Donald and many of his fellow colleagues came together in a group text, offering tips and information on how to handle those challenges with the UI office and their claims. After a months-long wait, he received his first payment in late June.

Still, employers wanting to support and advocate for their workers—especially if they have to lay them off—can play a big role in helping them access unemployment insurance:

• Notify employees when they are eligible to apply. Many people who are eligible for unemployment insurance don’t apply because they don’t believe they’re eligible, according to NELP. Incentivizing or requiring employers to notify employees (or former employees) when they are eligible for benefits would be a huge support and add clarity to an already confusing situation.
• Let employees know that if they apply, you won’t contest their application. The idea that an employer might contest their application, or that applying might sour a relationship, can have a chilling effect on a worker’s decision to apply for benefits. “The job doesn’t want you getting unemployment. I know that they prefer me working and I don’t want to cause any conflict,” said Edna. Still, “I applied for unemployment and they told me in a letter that I qualified. But I never received it. Not sure how that happened or where it went. Not sure if the job held off paying it.”

  Even if an employee correctly files an unemployment insurance claim, employer contestations can have dire consequences for the applicant. The most obvious being that they won’t end up collecting benefits, or worse, needing to repay benefits that have already been paid out and spent. These experiences may have a chilling effect, leading eligible individuals to avoid applying for benefits in the future.

• Help employees with their applications. There are ways employers can help employees apply without taking on responsibility for the entire application themselves. “The way I would prefer it to happen is employers notify the agency about who they laid off [and] how much they were paid,” said Michele Evermore from NELP, without making employers responsible for such actions as recertifying.
• Safety concerns as just cause for quitting. Especially during a pandemic, workers should be able to reject work as “unsuitable” when it would potentially put their health and the health of their families at risk. Making safety concerns a just cause for quitting or rejecting work would allow workers to collect UI benefits and minimize exposure to them or their families.