Wednesday, February 17, 2010

UNEMPLOYMENT INSURANCE - VOLUNTARY SEPARATION

A lawyer at a Continuing Legal Education course that I took on UI cases once said "Do not rely on UI benefits as an income. If you are unhappy with your job, don't quit unless you have a new one." I have had several cases where claimants quit and these have been difficult cases. let us first examine the introductory statement on the issue from the Appeals Board website:

"The Unemployment Insurance Law requires that a claimant voluntarily separated from employment be disqualified if the separation is "without good cause" (sub. sec. 593.1(a)), or due to the claimant's "marriage" (sub. sec. 593.1 (b)). This applies to any voluntary separation after which claimant has not worked in subsequent employment and earned remuneration at least equal to five times the benefit rate. (See Field Memo 3-99 for detailed discussion of "controlling" employment.)

The term "voluntary separation" as used in the statute means leaving employment of one’s own free will. It includes resignations other than those submitted at the employers insistence, and failure to return to work following a temporary layoff or leave of absence. A claimant discharged because of volitional acts which leave the employer no choice but to terminate the employee, pursuant to law, governmental regulations or contract is also voluntarily separated from employment. (, 309 N.Y. 413; , 71 AD 2d 746)

Once it is established that a claimant's separation is voluntary, the local office must determine whether the circumstances of the separation were "without good cause." Section 593.1 (a) provides that "In addition to other circumstances that may be found to constitute good cause, voluntary separation from employment shall not be in itself disqualify a claimant if circumstances have developed in the course of such employment that would have justified the claimant in refusing such employment in the first instance ..." under the terms of sub. sec. 593.2...; or "if a claimant, pursuant to an option provided under a collective bargaining agreement or written employer plan which permits waiver of his right to retain the employment when there is a temporary layoff because of lack of work, has elected to be separated for temporary period and the employer has consented thereto. "

Statutory good cause is also provided by sub. sec. 599.2 for claimants leaving employment which is not "suitable employment" to enter training approved under the Federal Trade Act of 1974. "Suitable employment" is defined as "work of a substantially equal or higher skill level than the claimant's past adversely affected employment and for which the remuneration is not less than eighty percent of the claimant’s average weekly wage." This exception does not apply to any other training program. In addition to the statutory reasons above, numerous other conditions may provide good cause for leaving employment. In general, to qualify for benefits a claimant who voluntarily leaves employment must have had a compelling reason for leaving and must have made a reasonably prudent attempt to resolve the problem and protect the employment.

When interviewing claimants regarding the issue of voluntary separation, claims personnel should consult the appropriate Fact Finding Guide cards for a checklist of questions to be explored. Determinations should be made in accordance with the principles reported in this section of the Interpretation Service Index, and the policies set forth in relevant Special Bulletins (A-710 series).

4 comments:

  1. I recently sold my incorporated florist due to lack of revenue. I was denied UI benefits because in their opinion I quit my job without good cause. My business was losing money and I couldn't pay myself. Can anyone suggest a recourse to get the UI benefits I believe I'm entitled to? Thanks, Maurice

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    1. Hello:

      This is the DOL position: https://www.labor.ny.gov/ui/claimantinfo/ui%20and%20corporate%20officers.shtm

      You can request a hearing.

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    2. Hi, Thanks for the info. However the page you recommended according tp NY Labor Dept. "Cannot be Found". Just thought you should know...

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  2. Hello:

    I just tried it and it worked. This is what they say on that page:

    "Unemployment Insurance and Corporate Officers
    A corporate officer is a person who manages the affairs of a corporation as an officer and/or stockholder or director or as a family member or close relative of an officer or stockholder.
    The NYS Unemployment Insurance Law provides that, "benefits shall be paid only to a claimant who is totally unemployed." Total unemployment is defined as the total lack of any employment on any day.
    Whenever an individual, who is the officer of a corporation, files a claim for benefits, and the corporation is the last employer, an investigation must be performed to establish whether the individual is "unemployed" within the meaning of the UI Law. It must be established whether the claimant can control his/her own employment. The investigation is required irrespective of whether the activity as officer of the corporation is the claimant's primary or secondary employment.
    An officer of an ongoing corporation may be considered employed for NYS unemployment insurance purposes and may not be eligible for unemployment insurance benefits, even during a period in which, because of a temporary suspension of operations, he/she performs no services and receives no remuneration. A temporary suspension of corporate operations may result from a lack of business, seasonal or otherwise, an emergency such as fire or flood; or other reasons.
    The courts have upheld the denial of benefits because of lack of total unemployment in cases described by the above rule. The basis for the ineligibility is that, since it rests within the power of corporate officers to fix their salaries and the time for their payment, it must be presumed that the salaries so fixed are intended to constitute compensation on an annual basis. In other words, such claimants are presumed to be employed throughout the year and are not eligible for unemployment insurance benefits.
    The only exception to the above rule would be in those cases in which corporate operations have permanently ceased because of the impending dissolution of the corporation. However, even in such cases, a corporate officer is considered employed if he/she performs substantial services related to winding up the affairs of the corporation. Similarly, a corporate officer is considered employed if he/she performs substantial services related to the formation and commencement of a corporate enterprise.
    During all three phases of the life of a corporate enterprise – pre-operational (startup); operational (including temporary suspension of operations); and post-operational (windup) – a corporate officer who performs substantial services or receives remuneration is considered employed, and is not eligible for unemployment insurance benefits. In addition, during the operational phase, in which the corporation may be described as an ongoing corporation, such person is not totally unemployed, even if he/she performs no services and receives no remuneration. "

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