"Who pays for unemployment?"

In Michigan, employers pay a tax on the first $9,000 each employee makes.  The amount of tax they pay is an "experience rate" which is set each year based on claims for unemployment the employer has had against it.  And positive balance employer is an employer who has paid more into the system than they has been paid out in claims to former employees.  A negative balance employer is one for whom more has been paid in claims than the employer paid into the system.  An employer with a good experience rate probably is paying only around .06% tax on the first $9,000 an employee makes.  A negative balance employer could be paying 3% or more.

There is also a FUTA or Federal Unemployment Tax which employers pay, again based on payroll.  Its usually somewhere around .05%, with credit given for amounts paid into the state systems, and  the Federal Government uses that money to subsidize state systems.

In Michigan, employees have to have worked at least 13 weeks for the employer.  I don't know what the qualification period is in Ohio.  And its intended to be paid to workers who are laid off.

At least in Michigan, if the employer contests the employees right to receive Unemployment, it means that they are arguing that the employee should be disqualified for some reason:  i.e. they didn't work sufficient qualifying weeks, they were discharged for cause, the employee resigned rather than being laid off.  A hearing is then held at which the Employer has the burden of proving that they employee should be disqualified.   It seems like a small point,  but the burden of proof being on the employer is a significant advantage to the employee.  For instance, if the employer misses the hearing for any  reason,  and that happens frequently, the employee automatically wins.

So, if your employer is contesting your right to benefits, they are saying you should be disqualified from receiving benefits for some reason.  You should carefully review the reasons you left employment and all the surrounding circumstances.  It would be wise to write everything down now while your memory is fresh, rather than wait.  You should also consult someone familiar with Unemployment in Ohio and seek their advice.  In Michigan we are permitted not only attorneys, but there are non-attorney advocates who are familiar with the Unemployment Compensation Law and the various requirements who can appear and help for a  very modest fee.  A lawyer may be more expensive,  but hopefully you could find one that would do this on a contingent fee basis.

Like any other insurance when a claim is made the rates go up.  That is why they are fighting it.  If you were dismissed from your job for a "non disqualifying reason" you should have no problem.  If you were fired because of misconduct etc... you have a problem.  Or if you quit and were not fired you have a problem. If none of these conditions exist, relax and realize that you are getting the money you deserve.  It is meant to help you until you find another position particularly if you lost your job through no fault of your own.  Good luck finding something new.  I just went through a few months of unemployment and it was no fun.  If I could have been guaranteed that I would be working before my money ran out I may have been able to relax instead I just found it entirely stressful.  I also did not file an unemployment claim though I should have.

You’re on the right track.

Employers pay taxes to the federal and state governments to cover unemployment.  Unemployment benefits are issued by the government.

But.  An employer’s history can affect their tax rate.  Direct from my payroll accounting textbook:

In all states, some type of experience-rating plan provides for a reduction in the employer’s tax contributions based on the employer’s experience with the risk of unemployment.  ...  The amount of the unemployment compensation contributions (taxes paid), the benefits paid by the state, and the employer’s payroll are entered by the state on each employer’s record.  The benefits paid are subtracted from the contributions, and the balance of the employer’s account is divided by the average payroll for a stated period of time to determine the reserve ratio.  Under this plan, the balance carried forward each year equals the difference between the employer’s total contributions and the total benefits paid to former employees by the state. The contribution rates are then established according to a schedule under which the higher the reserve ratio, the lower the tax rate.

I suspect you can tell why I hate payroll accounting.    So even though the benefits are paid by the state, the fact that you’ve put in a claim against your former employers can affect how much they have to pay the state going forward.  Thus, they’re disputing it.  I have a hunch that if they can prove that you provided false information that led to the approval of your unemployment application, the judge can cease or rescind your benefits, which would wipe this mark of your employer's record.

Awful, awful textbook. Thanks for finally putting it to some use. :-)

Wisconsin originated the idea of Unemployment insurance in the US in 1932^[5]. In the United States, there are 50 state programs of Unemployment Insurance plus one each in the District of Columbia and in Puerto Rico. Through the Social Security Act of 1935, the Federal Government of the United States effectively coerced the individual states into adopting plans of Unemployment Insurance.

Unemployment Insurance (UI) is a federal-state program jointly financed through federal and state employer payroll taxes (federal/state UI tax)^[6]. Generally, employers must pay both state and federal unemployment taxes if:

(1) they pay wages to employees totaling $1500, or more, in any quarter of a calendar year; or^[6],

(2) they had at least one employee during any day of a week during 20 weeks in a calendar year, regardless of whether or not the weeks were consecutive. However, some state laws differ from the federal law^[6], .

The federal government lends money to the states for unemployment insurance when the states run short of funds. In general, this can happen when the unemployment rate is high. The need for loans can be exacerbated when a state cuts taxes and increases benefits. All loans must be repaid, with interest.

Congressional actions to massively increase penalties for states incurring large debts for unemployment benefits led to state fiscal crises in the 1980s.

Because it is a joint federal/state program run by the states, taxing business for the benefit of labor, the politics of unemployment insurance are very complex.

If you are scheduled for a hearing, it means your employee doesn’t feel you are entitled to unemployment. Gather up any and all paperwork you might have concerning your leaving their employ - you are going to need it.

Here’s the word straight from the government:

 

Purpose

In general, the Federal-State Unemployment Insurance Program provides unemployment benefits to eligible workers who are unemployed through no fault of their own (as determined under State law), and meet other eligibility requirements of State law.

• Unemployment insurance payments (benefits) are intended to provide temporary financial assistance to unemployed workers who meet the requirements of State law.
  
  
• Each State administers a separate unemployment insurance program within guidelines established by Federal law.
  
  
• Eligibility for unemployment insurance, benefit amounts and the length of time benefits are available are determined by the State law under which unemployment insurance claims are established.
  
  
• In the majority of States, benefit funding is based solely on a tax imposed on employers. (Three (3) States require minimal employee contributions.)
  
  
• For additional information, click here.   http://workforcesecurity.doleta.gov/unemploy/uifactsheet.asp

 

Where things get sticky is that this type of insurance is designed to protect employees who were laid off because there wasn’t enough work for them--basically a layoff because business is bad.

 

I’m not saying that it is honest or moral, but there is a major temptation to for employers to claim that the employee was discharged for some sort of misconduct or bad job performance. The reason for this is that when an employee is discharged and the system has to pay money to the employee, the employer’s rates will go up until the money is paid back. Now if a company goes from one hundred to ten employees, the money may never be paid back in full. But to avoid paying the higher reimbursement rate, companies have been known to contest claims.

 

Over the course of my life, I’ve represented both employees and employers. I have seen hanky panky on both sides. I saw a company that lost a major customer and had to let 25% of its work force go because they didn’t have the business.  The company actually tried to claim that these forty or so people were discharged for cause.  It didn’t work.

 

On the other hand, I’ve seen employees fired for showing up to work dead drunk or stoned claim that they weren’t fired for cause.

 

It goes both ways.

 

As far as the appeal goes, I suggest that you contact the agency in your state that administers your program and find out what your rights are. My guess is that it is probably pretty informal. But, if it isn’t, it might be worth it to at least talk to a lawyer before hand.

 

Good luck!