It is difficult in these economic times to avoid talk on the television and radio of the financial crisis we are in or the seemingly hopeless state of the economy. Likewise, unless you are only tuning into the Disney Channel, it is hard to miss the topic of unemployment and how its effects are playing a part in the world today.  Now,  I recognize that flipping the channel to a show about a teenage alien can be a much-needed reprieve, but only with knowledge can you really find peace. 

On the news today we are hearing about the loss of jobs in the economy and stories from the numerous people currently laid off about their struggles to continue to pay their bills while they search for a new career.  What we are NOT hearing about is YOU, the business owner, manager or HR professional giving your all to protect every cent and asset of your firm. Unemployment benefits can cost your firm thousands of dollars; having said that, the benefits are there for a reason. Many people out of work do deserve unemployment benefits. If you, as a company owe them, pay them. But, if you can avoid unnecessary unemployment costs, avoid them!

In my last article I touched briefly on how to protect your firm’s assets from unemployment liability using vigilant documentation and arming your firm with a solid employee guide. Today we will dive deeper into the subject of disciplinary action. Specifically how you can protect your firm when disciplinary situations escalate to termination. It is important for all employers to know that the way you manage and document disciplinary issues can directly correlates to how many unemployment claims your firm is found accountable for.

Misconduct vs. Gross Misconduct

It is an unfortunate part of life in the business world that people make mistakes, both knowingly and unknowingly. With that, there are different levels of misconduct. You will have employees who make bad impressions, do the wrong thing, or those who just don’t seem to “get it”. 

“Misconduct” in simple terms is any deliberate act or omission that is detrimental to the employer’s interests. For unemployment purposes, remember that misconduct is not mere inefficiency, inadequate performance based on inability, ordinary negligence in isolated instances, or good faith errors in judgment. In many cases, regular misconduct would require “progressive disciplinary action” to release your firm from liability.  Compared to “gross misconduct”, misconduct is the “lesser” form of wrongdoing. We will discuss this in more detail below.

“Gross misconduct” is considered a more serious offense. Most definitely any illegal action by the employee would be considered gross misconduct, i.e. stealing, violence, sexual misconduct, etc.  Yet, the action need not be illegal to be considered gross misconduct.  Per onque.com, a definition widely used by the court system for gross misconduct is “intentional, wanton, willful, deliberate, reckless, or in deliberate indifference to an employer’s interest.” For unemployment purposes, assuming that you can prove the actions and show the severity, your firm would not be held responsible. Many HR professionals would suggest that if you have an employee who you believe is guilty of gross misconduct you immediately suspend the employee to give yourself time to investigate the situation further, prior to termination.

Unfortunately, as with all things, there is a level of subjectivity involved in determining misconduct versus gross misconduct. The courts ultimately will want to see a good faith effort on the part of your firm and the aforementioned “progressive disciplinary action”.

Progressive disciplinary action involves coaching and counseling your employee when issues of bad behavior arise. Firms should have a progressive action policy in place and use the same process for all employees.

For the first offense there is normally a verbal warning, second offense a written warning, and the proverbial strike three results in termination. With each action you take you need documentation that the employee is aware of the situation and aware of what future occurrences mean for their future with your company. Even a verbal warning should be documented and have a signature of recognition from the employee.

All employees should be aware of the progressive policy and know how failure to comply with company policies will affect their employment. An employer must understand that new progressive action is necessary for each disciplinary situation. For example, if you verbally warn an employee of an attendance issue and then catch them on the Internet against policy, you will need to conduct a separate verbal warning for the Internet issue.

Arming yourself with documents affirming your progressive actions will make your interactions with the unemployment courts smooth and breezy.  Going to court with only your testimony of “they did it all the time” will get you nowhere.  Let’s discuss a few examples:

• Example 1 – Employee falsifies their timecard
  You grow suspicious of your employee’s overtime hours racking up week after week.  Deciding to investigate, you review your surveillance videos to discover that for weeks the employee has been taking long lunches and sneaking out prior to the close of business.  In this instance, the employee was knowingly leaving work at one time and documenting a different time, therefore being paid for time that they knowingly did not work, and thus stealing from your firm. In this situation, you would immediately release your employee, and based on the offense, possibly press charges. Gross misconduct of this kind would release you from liability. 
• Example 2 – Internet Usage
  Your firm has a policy of no Internet usage during working hours. You have an employee who makes an exception to jump online and pay a bill, check out their Facebook page or email a buddy, once.  A one-time offense of this kind, though deliberate and knowing, is not extremely detrimental to your firm, nor would it be considered a “serious” offense in the eyes of the court.  If you terminate your employee after a one-time offense, your firm would likely be held liable for the unemployment benefits of this employee.

In closing, please do not misunderstand me, there are definitely situations where retaining an employee to avoid unemployment liability can be much more detrimental to your firm.  Something to remember is that a good reason for terminating someone is not always a good enough reason for the courts to deny unemployment benefits. Employees are there to make your life easier, and to facilitate the growth and success of your business. If after a fair evaluation, you look at an employee and can say that they make your job harder, it is time to cut ties. 

One sure fire way to try out an employee with out any liability is to turn to a recruiting firm.  The next time you are ready to upgrade your staff, consider using this resource. Recruiting firms are a resource to meet candidates with minimal risk. We all know that “try before you buy” can instill confidence in a product, and the same can be done for an employee!  Celebrity Staff offers a Match-Hire program for companies to hire new staff on a trial basis.  Celebrity Staff will manage the interview and placement process, as well as payroll and performance issues, including attendance and attitude. After a predetermined time frame has expired, you can hire the candidate onto your payroll at no additional fee. You will enjoy all the perks with out the risk!

Sarah Bonow, Celebrity Staff Operations Manager

About Sarah Bonow, Celebrity Staff Operations Manager
Sarah B. has worked for Celebrity Staff since 2001. She was hired as an Administrative Assistant, and since then, she has been promoted several times to her current position of Operations Manager. Sarah assists in the management of both clients and prospective candidates while overseeing the day-to-day happenings at Celebrity. Sarah has a Bachelor’s degree in Marketing and is working toward a CPC. Off the clock she likes to run and is learning how to play golf.