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Dilemma of the Month: I Fire Bad Employees. Why Do I Have to Pay for Their Unemployment Benefits?

Back Article Jul 1, 2022 By Suzanne Lucas

I’m tired of having people get unemployment benefits when I fired them for being bad employees. Stealing, lying and coming in late — it doesn’t seem to matter. What can I do to make sure people don’t get unemployment payments? Can I document better?

This story is part of our July 2022 Young Professionals print issue. To subscribe, click here.

It must be really frustrating! And I have a way to reduce your unemployment obligations substantially, but it will be difficult and will only work if you make significant changes. Are you ready?

Fix yourself.

If you have to regularly terminate people for stealing, lying and coming in late, there is something wrong with either your hiring practices or your management skills. Here’s what you need to do.

Fix your hiring practices

You’re hiring the wrong people in the first place. You’re picking people who are likely to steal, lie and come in late — among other things. Take a look at your hiring practices and figure out where you’re going wrong. Here are some things to help you get started:

Are you putting too much emphasis on the interview and not enough on experience? Unless the job involves regularly interviewing people, an interview isn’t the best judge of someone’s skills. You may be wowed by people who interview well but have a shoddy work history.

Are you limiting yourself to younger employees because they seem to have more energy or rejecting currently unemployed candidates because you believe it was surely their own fault for getting fired? Any time you limit your candidate pool, you increase your probability of getting bad hires. Plus, it is illegal to restrict your candidate pool based on characteristics such as age. 

Who screens candidates and conducts interviews? Getting those people (including yourself) some training can make a huge difference. Hiring is a skill, and like all skills, you can learn how to do it well.

Are your salaries at market rates? If you’re not paying as much or more than your competitors, you’ll naturally have the worst applicants. And paying an under-market rate doesn’t save you money in the long run — it increases your turnover, and turnover is expensive.

Fix your management skills

You shouldn’t need to fire a bunch of people for cause. Terminating should be rare. If you repeatedly terminate people, you (and your management team) can improve.

Be honest in all you do. Employees that lie and steal may believe that behavior is okay because they see managers doing it. If it’s your business, you may think nothing of taking office supplies home, using petty cash to buy your own lunch or giving products away to your friends. But your employees can see this as stealing and figure that it’s okay to do it if the boss does it.

Give immediate feedback. Do you let bad behavior go on until you can’t stand it anymore and then fire the person? Or do you correct as soon as the bad behavior starts? Fixing minor problems can prevent big problems.

Praise the positive. If you want more good behavior, praise it often and openly. 

Are your rules necessary? You didn’t say what your business was, but it matters when you’re talking about being on time. If you run a dentist’s office, then for sure, people need to be on time — patients are waiting. But if you are a public relations firm, it’s only important that people make their meetings on time. It doesn’t matter if they come in at 8:00 a.m. or 10:30 a.m. if they get their work done and don’t leave clients hanging.

Provide training. People who feel lost in what they need to do can blurt out lies to cover for their mistakes. This isn’t to excuse lying, which is unacceptable. But providing proper training can go a long way toward creating a culture of honesty.

Get formal management training for you and your management team. Just as hiring doesn’t come naturally, managing doesn’t come naturally for many people. Companies tend to promote people based on how well they do the job, not on their innate management skills. But don’t worry — you can learn management skills too. Pay for training.  You’ll find when you are a better manager, your employees magically perform better.

A note about unemployment payments

In California, terminated employees can collect unemployment benefits as long as they didn’t engage in misconduct, which is defined as a gross neglect of duty or willful violation of a known employer rule, especially if the negligence recurred after warnings or reprimands. You may believe your reasons for firing your employees fall under that umbrella. But here’s a secret: You have one goal when you fire someone — to get that person to go away and never bother you again. That’s it! That’s all you want. And the easiest way to get that to happen is to help the employee move on.

When you attempt to block an employee from receiving unemployment benefits, you stop them from emotionally moving on. You’re more likely to be sued or receive repeated contact from a disgruntled former employee. Your default should be to not fight unemployment. If you follow the tips above, you’ll find yourself with fewer unemployment claims to worry about, anyway.  

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