Tip 6: Be prepared for hearings.

All unemployment benefits hearings require first-hand testimony as to the facts and events under consideration. By proactively documenting all employee actions and disciplines, you collect the information you will need for a hearing. By having all documents readily available during the hearing, you avoid relying on hearsay evidence which is generally not persuasive enough to win your hearing, and may not even be considered, depending on the case.

If you work with a claims administrator or a trust like UST, you may have access to your own hearing representative. Working with a hearing representative will also help you prepare for the case by providing you with someone who is not only on your side, but has many years of experience in working through claims hearings.

Tip 5: Know the difference between voluntary resignations, discharges, and lack of work claims.

In almost every state, a voluntary resignation, especially for non-compelling reasons, usually disqualifies the employee from receiving unemployment benefits.

But there are significant exceptions because some states may allow benefits for a quit with “good cause.”

Here are some good things to remember:

1. In a voluntary quit, the burden of proof rests with your former employee.
2. A discharge for misconduct is legally defined as willful misconduct connected with your work that resulted in a tendency for damage to your nonprofit interests.
3. A discharge in which you initiate the termination puts the burden of proof on your nonprofit. Make sure you have the right documentation on hand for at least 18 months.
4. Always avoid the words “unsatisfactory performance” in cases where the employee is able to perform the job, but is negligent of performing their duties. This term has a legal definition of an employee who is unable to perform the job, and will likely result in benefits awarded to the claimant.
5. In discharges due to misconduct, be prepared to provide documentation of the final incident that led to the discharge.

And never, ever forget, lack of work claims are the very reason unemployment insurance exists. They provide benefits to employees who, through no fault of their own, are separated from work. But to get any award, claimants must be able to work, available for work, and actively looking for work.

Tip 4: Track unemployment costs and budget appropriately.

Track claims, monitor potential liability and review past history to forecast budgets for unemployment taxes. Be familiar with the base period and benefit year in your state and review tax information to ensure budgets are adequate. By better understanding how your unemployment tax costs are affected by layoffs, you can plan for the future and make sure you have the cash on hand for fluctuations in staffing that may affect your future costs.

If you are a reimbursing employer, meaning you have opted out of the state unemployment tax system to reimburse the state for your own UI claims, you should very carefully manage unemployment claims and make sure you aren’t paying for any that are unwarranted. Also, you can catch errors by the state if you know how much you should be paying. If you work with a trust like UST, your claims representative should be doing this for you and will be able to walk you through any questions.

Even if your nonprofit doesn’t have a dedicated human resources team, it’s important that your human resources practices are up to snuff. Best practices include:

• Performing detailed reference checks before hiring new employees.
• Consistently using (and documenting) progressive discipline.
• Enforcing all rules and policies uniformly. Even the smallest deviations undermine your credibility as a fair nonprofit employer.
• Follow an employee’s progress from the moment they are hired.
• Perform thorough talent assessments before hiring or promoting employees to alleviate problems down the road.

There are online performance assessment tools that you can use to help screen employees before hire, and assess after hire. For example, UST members have access to pan, an online aggregation of hundreds of assessments from more than 50 of the industry’s top test publishers. These online assessments include employee acquisition, evaluation, and development solutions to help reduce costs in the hiring and recruiting process for UST members, as well as decrease turnover and its related costs.

Tip 2:  Compose effective written warnings.

Every manager, HR generalist, and employee from here to Timbuktu knows that warnings are an act of progressive discipline. But what many of these same people fail to remember is that warnings are an act of progressive discipline that effectively ensure an employee understands what is expected of them.

In the case of an employee discharge, state unemployment agencies look for warnings to determine if your former employee was discharged for misconduct. Effectively clear, and non-judgmental, warnings help you meet this burden of proof with concrete evidence, when written to include:

• The violation
• The action that must take place for the situation to improve
• The consequences to the employee if this standard is not met
• The employee’s action plan and comments
• The signature of the employee, a witness, and the issuer

At the end of July the National Unemployment Law Project released a blistering analysis which found that much of the financial burden facing 30 states which will have to pay back nearly $1 billion by the end of September could have been avoided with better planning.

According to the analysis, had each of the states forced to borrow from federal funds enacted more responsible financing of their funds leading up to the Great Recession, fewer states would have had to slash the safety net created for jobless workers through unemployment insurance benefits. The report further details how excessive tax giveaways and breaks for many employers left many states with depleted unemployment trust funds that were unprepared for even a modest downturn.

Citing evidence from 1995 to 2005 in which 31 states reduced employer contribution rates by at least 1/5, the report reveals that while employer tax rates fell to a historic low in the decade leading up to the recession, the combined balance in all state trust funds was half the amount experts recommend.

Funds were so abominably low, Michigan and New York even had to begin borrowing from federal funds before the recession had even officially begun.

The trend continues today. As of yet, few states have made significant changes to the structure of their unemployment insurance funds which would prevent another mass borrowing or would allow them to reinstate a fully funded unemployment trust fund in the next few years. Only Alabama has done enough to predictively repay the federal loan within the next few years.

For employers that have paid increasingly high unemployment taxes the news can come as a shock.

Although tax rates for employers within the state unemployment insurance system have increased substantially since 2009, the higher payments have done little to cover the increased benefits payments and the high level of interest being charged on federal loans, much less build up the level of reserves available.

To combat the continued depletion of funds, many states have even shifted the blame onto those found jobless by reducing benefits and eligibility across the board. Not surprisingly, each cut has severely jeopardized the capacity of unemployment funds to insure families and stabilize the economy during swift downturns, which has led to further increases in tax payments made by employers in the state system.

Thankfully, nonprofits with 10 or more employees have the exclusive ability to opt out of the state UI tax system and reimburse the state only for the benefits paid out to their former employees. This protects the benefits paid out to nonprofit employees, while simultaneously reducing the operational costs of unemployment, which allows nonprofits to do more for their mission.

For a complimentary overview of how UST could help your nonprofit reduce unemployment expenses and lower improper payment rates, please sign up for an upcoming webinar, or fill out a Savings Evaluation today.

Laura, Megan, Angela, Lisa, Robin, and Kim pose with their UST mugs outside our office.the very best of our members “Mugging with UST!”

Beginning mid-March we’re going to be featuring the very best of our members “Mugging with UST!”

Send us your pictures* with a UST mug, logo, pen, newsletter, or whatever else you can think of, and we’ll feature you on our social media channels! All submissions should be sent to stroup@ChooseUST.org.

*Please include the link to your website if you would like us to also highlight the nonprofit you work for! (We’re all about sharing the love.)

In almost every nonprofit setting, it’s pretty safe to say that leadership requires the most out of every employee to create the greatest possible impact on the governing mission. Whether this means that case workers take emergency calls from clients more than they are schedule to, or that an administrative assistant wears multiple hats as the social media coordinator, office manager, event planner, and even an intake specialist, continually changes. But, despite the great pressure nonprofits place on each employee to give their absolute best, employee development is often overlooked.

A recent Bridgespan Group survey has revealed that most nonprofits rank their ability to provide development and growth opportunities to employees as their fourth greatest management weakness overall even.*

The same survey went on to explain that a lack of employee development has become the “Achilles heel” of the nonprofit community. Because only 30 percent of nonprofits have created or sustained an agency-wide plan for employee development—and only 23 percent of those track its progress—the large majority of organizations don’t have a clear understanding of what skills they need for each position as their mission evolves. Many more don’t even have an idea of where that talent would come from.

To help you develop a plan to address future leadership gaps, Bridgespan put together a list of 52 free ways that nonprofit agencies can improve their internal employee development. Some of the easiest and most impactful employee development initiatives that they list include:

• To prepare employees for positions of team leadership and management, have key employees lead monthly meetings
• Allow potential future leaders to manage junior staff such as interns or volunteers
• Organize and execute team building activities at monthly meetings
• Allow key employees to represent the organization in professional or community networks
• Ask employees you want to develop to participate in drafting portions of grants or business contracts to improve their business capabilities
• Have staff participate in developing key budgets
• Ask staff to organize initiatives throughout the organization or in the community

On its own, on-the-job development isn’t enough though. To foster truly effective options for employee and organization development, get your board involved with individual employees through the agency. And have each person who is involved with your development program—whether that is a board member or a developing leader—regularly assess what works best at getting employees ready so that you are more likely and more able to advance them within your agency.

*Rounding out the top 3 are communication of priorities, coordination across organization boundaries, and performance assessment and consequences.