Punters and Pushers

Posted by Ask a Manager

https://www.askamanager.org/2026/01/when-should-an-employer-contest-unemployment-benefits.html

https://www.askamanager.org/?p=34986

A reader writes:

When should an employer contest an unemployment charge and when should they let it be? I’m an HR department of one, and the managers have me contest almost everything! It’s hard to explain to them when unemployment is supposed to  get awarded (poor performance) and when it isn’t (gross misconduct).

Can you help to determine what it should look like? This past year, we had an unprecedented number of firings and it’s been a doozy.

Most of the time, employers should avoid contesting unemployment benefits unless something egregious happened. They definitely shouldn’t be doing it as a reflexive response to any unemployment filing.

First, the basic rules around unemployment benefits: in most states, if someone is fired for not performing well enough, they’re eligible to receive unemployment. If they’re fired for clear misconduct or significant rules violations (which includes things like chronic lateness or absenteeism, cussing out a customer, drinking at work, lying on a timesheet, etc.), they’re not. In overly simplified terms, the idea is that if someone was trying to do their job but just wasn’t good enough at it, they get benefits. If the firing was easily avoidable and their “fault,” they don’t. (You can argue with whether or not it should work this way, but regardless this is how it’s set up.)

Too often, employers view benefits eligibility through a punitive lens — “she shouldn’t get unemployment because she was a screw-up / didn’t try hard enough / messed up the X project / was a pain to manage.” But it’s generally not in companies’ best interests to approach it that way (even putting questions of basic humanity aside). Any employment lawyer will tell you that challenging unemployment makes it vastly more likely that a fired employee will end up suing the company (whether or not they have real cause). For example, say you’ve got someone who was fired and has wondered if their age/disability/pregnancy/whatever played a role but they’re weren’t planning to pursue it … but then you fight her unemployment, which comes across to most people as “they fired me and now they want me to starve and lose my house.” Now she’s bitter and angry, and she decides to talk to a lawyer after all. Even if you ultimately prevail, you’re going to have to spend time and money dealing with it.

In most states, employers pay into the unemployment system based in part on how many of their former employees end up collecting it, so they figure they have a financial incentive to keep those numbers down. But you can’t make that calculation without factoring in the above.

So at a minimum you should tell your managers that contesting unemployment is only for situations where there was gross misconduct, not just where someone wasn’t good enough at the work.

Also: what’s going on in your organization that’s causing an unprecedented number of firings? Maybe that’s legitimate and unavoidable, but are your managers making bad hires? Managing people badly? I’d dig in there as well.

The post when should an employer contest unemployment benefits? appeared first on Ask a Manager.

https://www.askamanager.org/2026/01/when-should-an-employer-contest-unemployment-benefits.html

https://www.askamanager.org/?p=34986