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Your former employees can collect Unemployment Insurance (UI) benefits if they are terminated for reasons other than misconduct. It is important to understand the difference between poor performance and “misconduct” when deciding whether it is a worthwhile investment of your company’s time and money to fight a claim for UI.
If you terminated the employee, UI benefits will be denied only if the employer can show the employee engaged in misconduct, which generally is defined as willfully doing something that substantially injures the employer’s interests.
Typical examples of misconduct include theft, intoxication, deliberate violation of an important safety rule, deliberately falsifying a timecard, or unexcused absences without a compelling reason.
Mere poor performance, incompetence, violation of minor rules, good faith errors in judgment, or not getting along with co-workers do not rise to the level of misconduct.
In order for poor performance to rise to the level of misconduct, the employer must be able to show the employee is deliberately choosing to do a bad job. This requires showing the employee previously demonstrated the ability to do better, his/her work performance has substantially deteriorated, and there is no reasonable explanation for the deterioration.
Unfortunately, deliberate bad work is difficult to prove in most instances, meaning employees who are fired for poor performance are more likely than not able to collect UI benefits.
More information about UI benefit eligibility is available in the Employment Development Department’s Benefit Determination Guide, available on the EDD website.