Friday, August 8, 2014

NEW YORK UNEMPLOYMENT INSURANCE - CAN EMPLOYER CONSENT TO INELIGIBLE REQUEST FOR BENEFITS - CONT PART 14

In January of this year, the California law firm of Lozano Smith authored an article "New Risks in the New Year: Use Caution with "Agreement Not to Contest Unemployment Benefits" Clauses". Although dealing with California law, I am mindful that like New York, California had to conform its Unmeployment Insurance rules to conform with the same Unemployment Insurance Integrity Act  originally passed Congress in 2011 that took effect in late 2013.

In many respects, California UI is similar to New York's rules as the article notes:

"California law, enacted in response to the Act, allows for employers to lose credit for payments into their unemployment insurance account when "the employer or agent fails to respond timely or adequately in two instances relating to the individual claim for unemployment compensation benefits." (Unemp. Ins. Code §1026.1.) Further, under California law, if the employer "willfully makes a false statement of representation or willfully fails to report a material fact concerning termination," the employer and/or the employer's agent can be fined between two and ten times the weekly benefit amount (up to a maximum of $4,500). (Unemp. Ins. Code §1142, et. seq.)"

The article conludes with (note that the EDD is the California Employment Development Department similar to New York's Department of Labor Unemployment Insurance Division):

"Going forward, if you are considering a proposed separation agreement that contains a "do not contest" clause, you should:

Avoid blanket "Do Not Contest" clauses that do not comply with state and federal law.

Include language in the agreement clearly stating that you will not withhold or misstate any information in response to inquiries from the EDD"





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