What to Do When an Employee Walks Off the Job

One of your employees  hasn’t come to work  for the past few days, and his or her manager has not been notified of the reason for their absence. By the third day, without any luck contacting the individual, you must assume your employee has walked off the job. Your immediate thought is to hire another employee to fill the now-empty role. But instead, you need to focus on another, more important issue.

You must document their departure. If not, you’ll lose at the unemployment office.

If you fail to properly document the exit of your employee, you are in danger of losing more than just a member of your workforce. There are many loopholes that may allow your employee to claim unemployment benefits, which could force you to pay higher taxes.

You must be prepared for quick action and clearly document that the employee walked off the job voluntarily, disqualifying that employee from unemployment benefits. You must take immediate action; otherwise, the employee may be entitled to collect unemployment insurance. If the employee quits, files for unemployment benefits and wins, it is because you have no documentation. And the result will be a higher rate of unemployment insurances taxes for the next three years.

When an employee walks off the job or just plain quits, you have a number of responsibilities to immediately attend to:

  1. Contact the employee and ask for a letter of resignation within a specific number of days. Otherwise, you, as the employer, must assume the employee quit.
  2. Make sure your file with all employee documentation is up-to-date, including written warnings, corrective notices, hours, etc.
  3. Notify your accountant that the employee quit voluntarily and should not affect your unemployment insurance tax rate.
  4. Be on the lookout for a notification of an unemployment-insurance claim so you can respond quickly.

Contacting your employee is the most ignored rule of unemployment insurance, and failure to do so can turn a walk-off into a layoff. If you do not contact your employee to confirm he or she voluntarily quit, the state may assume the individual was laid off because the next schedule did not assign the employee any working hours.

You must contact your employee within a certain number of days; the specific number varies by state. Some states do not have a law regarding the time (simply recommending “as soon as possible”), whereas others have very short timeframes. You must look at your individual state in order to be certain. For example, in Illinois, you must contact the employee within eight business days.

The next step is to ensure that all of your documentation is organized. All employers should have a complete collection of signed employee handbooks, performance reviews, corrective notices and warnings. You should also include a record of your attempted and/or successful contacts with the employee. This way, you will be prepared for any action the employee may or may not take.

The next contact to be made is with your accountant. If your payroll sees a decrease in the number of employees and an increase in the unemployment insurance rate, your accountant may assume this is fine. But it is important to alert your accountant that the separation was voluntary and the unemployment insurance tax rate should see no change.

Finally, be on the lookout for filed unemployment claims. If a claim is filed and denied by the office, you still need to respond with information confirming their denial. If a claim is filed and granted, you have a limited number of days to contest the claim. The number of days allowed to contest varies from state to state, as does the number of days to contact your employee. In Texas, for example, you have 14 business days to contest a claim.

In order for the matter to be resolved quickly and easily in your favor, explicit paperwork must be on file for each employee to avoid unemployment insurance claims. An employee walk-off is a trickier situation than most when analyzing unemployment insurance. If you’re well-informed about the unemployment laws in your state and have a solid documentation system, you can keep your tax rate low. However, it pays to never assume you are safe from an unemployment claim when an employee walks off the job.

See my previous articles for more tips on combatting bogus unemployment claims and lowering your unemployment insurance tax rate.

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