Practice Areas

Is Your Company's Unemployment Rate Giving You a Headache? It's Time to Start Lowering It!

June 2013

By: Sean F. Darke, Esq.

Every year I receive telephone calls from clients in the month of December cursing the IDES up and down regarding their new unemployment rate. I try to explain that the Company is ultimately in control by protesting, appealing, and probably appealing again. It is a good time to take control and begin to lower your rate!

Companies typically choose to be dormant over the next eight (8) months and then wonder why or have given up on an attempt to lower their rate. But it's time for the Company to take back control of its unemployment rate. The following article will start that process, but it's ultimately up to the Company to be aggressive and vigilant.

For a very simplified explanation, the Company's unemployment rate is based on the previous 36 months' contributions and taxable wages. The most influence a Company has is regarding the contributions and whether or not they are handled correctly.

I often hear Companies giving up on their unemployment rate because they always lose! But that is the importance of an appeal to a referee and even to the Board of Review. If your Company understands that it will often lose at the local office level and that the fight will begin with the appeal to the referee, the Company can relax and stop worrying about the first battle. But the steps that the Company takes in its appeal to the referee is what will revive them at the referee's hearing and ultimately the quarterly statement protests.

The first key is the protest! Companies make one of the most critical mistakes at this stage by failing to check the 500C box. This can be a crucial mistake because the Company is letting the claimant off the hook. Most companies understand or have some knowledge on the big four (4) disqualifications of benefits, i.e. 601, 602, 603, and 604. The big four (4) are very powerful because they determine whether or not an individual is "disqualified for benefits." If a company prevails on a disqualification section, then the individual cannot obtain any benefits. But if the Company loses, the Company needs to keep the individual honest by protesting under section 500C, which places the burden on the individual to be able to work, available for work, and actively seeking work.

Section 500C is a second tool to reduce the Company's rate, which can knock out months of unemployment benefits, if the individual is not keeping up with his/her obligations. Further, in order to continue to place pressure on the individual, the Company should send in protest letters every ten days that the Company believes that the individual is not complying with Section 500C. Section 500C provides that an individual will be held ineligible if they fail to be available for work, able to work, or actively seeking work. For temporary help firms, the above provision is even more powerful, because under the Illinois Administrative Code, if the individual last worked at a temporary help firm, they must return to the temporary help firm or it is presumed they are not actively seeking work. This makes sense since a temporary help firm has an incentive to get people back to work.

Questions? Please contact Sean F. Darke, a Shareholder at Wessels Sherman's Chicago office, at (312) 629-9300 or [email protected].