Unemployment Claims: A Guide for Small Arizona Businesses

John Komadina

3 years ago

First-time unemployment claims have soared at the start of 2021, reports SHRM, with the U.S. Department of Labor ranking Arizona as one of the top five states with the largest increases in first-time claims. As Arizona’s small businesses continue to grapple with the economic effects of the pandemic, more and more business owners are having to navigate the unemployment claims process. Here’s what you need to know as you steer your company through these challenging times.

How Unemployment Benefits Work in Arizona

The Arizona Department of Economic Security (DES) is the state agency that oversees unemployment compensation in the Grand Canyon State, including managing the claims process and deciding whether or not a claimant is eligible to receive compensation.

Initial Eligibility and Award Benefits

If an employee lost his or her job due to company layoffs, downsizing and other situations that were not their fault, they meet the base threshold for Arizona unemployment benefits. Once approved, the employee’s benefit award is:

  • 4% of the wages they earned in the highest-paid quarter of the previous 12 months (i.e. the base period).
  • Capped at a maximum payout of $240 a week, with a minimum guaranteed payment of $122 a week.
  • Paid out for 26 weeks or until the employee has earned a third of his or her base period wages, whichever is shorter.

The unemployment program is designed to provide a temporary wage following a job loss that is due to no fault of their own.

Eligibility Factors to Continue Collecting Unemployment Benefits in Arizona

To continue receiving benefits, employees must file weekly claims demonstrating their continued eligibility for unemployment benefits. Example factors that may impact a person’s ongoing eligibility include:

  • Geographic residency
  • Availability to work, including actively seeking a job and being ready to accept a job if offered.
  • Receiving money from severance pay, vacation pay, etc.
  • Legal and bureaucratic requirements, such as declaring false information or missing important deadlines for filing a claim.

Unemployment Benefits in the Age of COVID-19: Pandemic Specific Updates and Changes

Many businesses have let go of some or all of their employees because of the COVID-19 pandemic.

In response, the state of Arizona has released pandemic-specific unemployment benefits that top-up the pre-existing compensation schedules, including an extra $300 a week for eligible unemployed workers under the federal Continued Assistance Act (this extra benefit is currently scheduled to end in March 2021).

Unemployment Claims 101: Types of Claims and Understanding the Process

Common Types of Unemployment Claims Filed in Arizona

All determinations of whether or not a worker’s unemployment claims are valid are made in accordance with the appropriate Arizona Revised Statute, Administrative Code and/or applicable federal regulations.

Common types of unemployment claims include:

  • Involuntary termination of employment
  • Layoffs or reductions in force (RIF)
  • Voluntarily quitting: The worker may be able to collect unemployment if he or she left a job voluntarily but with good cause (e.g., dangerous working conditions, discrimination by the employer, etc.)

When a worker files a claim, an employer has 10 business days to respond to their notification should they wish to contest the worker’s claim. If an employer doesn’t respond within that time frame, the claim is considered a non-contest.

The Unemployment Claims Process for Employers

Step 1: Pay the Unemployment Tax

All Arizona businesses pay the Federal Unemployment Tax, which funds the unemployment benefits. This costs a business approximately $42 per employee per year.

Step 2: Receive a Notice of Claim

After a former employee files for unemployment insurance benefits, the state of Arizona sends the employer a notice (Form UB-110) alerting the business about the claim. The notice outlined all the pertinent information about the claim, including the reason for the claim.

Step 3: Respond to the Claim

The employer has 10 business days to respond to the claim should the employer want to contest it. For example, if the worker has filed for unemployment and said he or she was laid off, but the employer actually fired the worker for misconduct, the employer will need to appeal the claim:

  • Complete the appeals form.
  • Include documentation or evidence, such as proof of corrective action, supporting emails, written warnings, photos or screenshots, witness statements, etc.
  • Submit the appeals form and documentation via fax or mail.

Step 4: Wait for the Arizona Department of Economic Security to review the forms

The department will review each individual case and issue a final ruling. Should either the business or worker disagree with the ruling, additional appeals can be filed within 15 days of the decision notice being issued, after which an unemployment hearing is called before a tribunal.

Step 5: Attend the Unemployment Hearing

The hearing before the appeals tribunal may be conducted via telephone or in-person. All details about the hearing will be issued to the employer through a written notice.

For the most successful outcomes, businesses must prepare the manager who was involved in overseeing the employee. This manager, who would have been the one privy to any meetings, written warnings or terminations, will need to provide a personal account of why the worker’s unemployment benefits are not valid due to firing with cause.

For example, the employer should make sure the manager:

  • Knows what to expect during the hearing.
  • Understands how to best answer the tribunal’s questions with simple yes or no answers, and not volunteering more information than required.
  • Appreciates the value of being respectful and courteous to the tribunal.

Don’t Leave Your Unemployment Claims and Appeals Up to Chance

At Integrity Outsource, our expert teams of HR professionals help small businesses like yours to navigate the tricky unemployment claims processes in Arizona. Don’t let the claims process overwhelm you, or the appeals process intimidate you. With the help of your friendly Integrity Outsource team, you’ll have the confidence and support you need in these difficult moments.

Contact us today to learn about how our award-winning Arizona PEO (Professional Employer Organization) can help you grow your business with unemployment support, payroll and benefits management, and other powerful HR solutions.

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