Terminating an employee – or having them resign, can be difficult. Given the stress associated with either process, many employers do not think through “next steps” – particularly issues that may arise outside of the organization, such as unemployment benefits.

The law surrounding unemployment benefits is specific to the state where the employee worked during their tenure. Employers should also consider:

1. An employee is typically eligible for benefits if terminated for performance issues. However, Virginia (and the law of several other states) proscribes specific reasons when employees are disqualified from benefits, such as absenteeism, violating a known company rule (i.e., misconduct), or testing positive on a drug test. A failure to articulate a reason for the separation (i.e., it was a “bad fit”) leans towards benefits being awarded.
2. Contesting (and pursuing) employment benefits can be time consuming and difficult. The Virginia Employment Commission typically holds telephonic hearings where evidence (including testimony) is considered before rendering a decision on benefits. These processes (and the preparation before/after – as there is a right of appeal) should be balanced with the actual cost to the employer in choosing not to contest benefits. If an employer is concerned about the cost of their unemployment insurance premiums, I recommend that they speak with their carrier.
3. Not all resignations are created equal. Typically, an employee is disqualified from benefits if they resign from employment. However, employees that resign and then are subsequently terminated can be awarded benefits. For example, an employer’s decision to “decline” an employee’s two-week notice can be treated as a termination – despite the employee initiating the resignation. Similarly, an employer’s “option” to resign in lieu of being terminated can oftentimes be seen as a termination (even if labeled a resignation).