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State Labor Dept. Typically Sides with Employers on Challenged Unemployment Claims

by Andrea Zelinski on December 27, 2011

More than two-thirds of unemployment claims initially disputed by business owners and managers this year were decided in favor of the employers, according to the agency that regulates private workplace relations in the state.

The numbers, provided to TNReport by the state Department of Labor and Workforce Development, seem to contrast with assertions made recently by Tennessee Lt. Gov. Ron Ramsey, who insisted to reporters during a press conference this month that the state almost always sides with fired employees when deciding if they’re entitled to receive unemployment benefits.

In 68 percent of 28,860 appealed unemployment claims challenging whether an out-of-work Tennessean was entitled to unemployment benefits, the state labor department favored employers.

Ramsey said he believes as many as “nine out of 10” Tennesseans fired for work-related misconduct are still issued unemployment benefits despite employer challenges.

“There are plenty of examples that they get it. It wouldn’t surprise me if it’s not nine times out of 10. But if I’m going to say that, I want to back it up. I will say the majority of the time. I’ll bet on that. I’ll bet you $10,000. Just kidding,” Ramsey told reporters.

To be sure, few employers ever challenge a dismissed worker’s claim for unemployment compensation. Just 7.7 percent of total claims were challenged last year, a state labor department spokesman said.

The department reports that only 28,860 of the 372,688 new claims filed so far this year came down to a face-off between an employer and former employee to determine if unemployment benefits were lawfully entitled.

A lobbyist and executive representing Tennessee small businesses said he figured the total number of contested cases would be much higher.

“It doesn’t match up with what we’re hearing anecdotally,” said Jim Brown, executive director of the National Federation of Independent Business’s Tennessee Chapter, who has sat in on a handful of business round table meetings this fall.

“It just may be that we’re hearing from a lot of people who are a part of those numbers,” Brown added.

More than 19,600 contested cases, or 68 percent, were ruled in favor of the employer, according to the Department of Labor.

Tennessee Republican state lawmakers, who dominate both chambers of the General Assembly, are expected to take a hard look at stats like those as they consider tightening unemployment-benefit eligibility as part of their overall effort to streamline and ease  regulations on business in order to prompt job-growth and spur economic development.

Ramsey, who is leading the charge to revamp the state’s unemployment benefits system, said he understands his political detractors will say he’s “hard-hearted” for making that issue a priority. Ramsey said he anticipates he’ll be portrayed by political detractors as attempting to “take their unemployment away.”

Ramsey, who is speaker of the Tennessee Senate, has also declared his support for drug-testing recipients of government aid and benefits.

“But folks, this is your money that we’re trying to protect here,” Ramsey, a Republican from Blountville, told the Nashville Chamber of Commerce this month.

“If you were fired from your job for just cause, maybe even for stealing from your employer or chronic absenteeism, you shouldn’t be able to draw unemployment. Yet we don’t have that education on the lower level here to make sure that happens.”

The Department of Labor approved benefits to almost six of every 10 claimants in the budget year that ended June 30.

About 79 percent of those beneficiaries were laid off, 10 percent fired for misconduct that was not work-related, and another 10 percent were no longer working for other reasons, such as illness. One percent issued unemployment benefits had voluntarily quit.

In Tennessee, being fired doesn’t necessarily exclude someone from being eligible to collect benefits. Workers must be fired for work-related disciplinary reasons that are documented or witnessed, and the burden of proof rests with the employers.

The first 26 weeks a jobless worker is on unemployment is paid for by Tennessee employers who pay the state a tax on the first $9,000 an employee earns each year.

Unemployment claims are on the decline after topping off with more than one half million initial claims in 2009. That year, 604,081 initial claims were filed, followed by 418,772 the year after, according to the labor department.

Ramsey says he believes there are people on Tennessee’s jobless-benefits rolls who probably shouldn’t be there — or who may be hanging around taking unemployment when there is work available.

Lawmakers last year gave employers more tools to contest unemployment benefits for former employees. The law now allows them to submit personnel or other business records in addition to witness testimony.

The state’s benefits system was recently identified in a federal study for overpaying $310 million in jobless benefits over the last three years, although agency officials dispute the study’s findings.

Only about 10 percent of Tennessee’s roughly 120,000 people on unemployment currently have to provide any documentation that they’re applying for jobs, the agency said.

  • Elmer Gantry

    “Ramsey, who is speaker of the Tennessee Senate, has also declared his support for drug-testing recipients of government aid and benefits.

    “But folks, this is your money that we’re trying to protect here,” Ramsey, a Republican from Blountville, told the Nashville Chamber of Commerce this month.

    “If you were fired from your job for just cause, maybe even for stealing from your employer or chronic absenteeism, you shouldn’t be able to draw unemployment. Yet we don’t have that education on the lower level here to make sure that happens.”

    Another fact that Lt. Governor Ron Ramsey has glossed over is that Tennessee is an euphemistically described “right to work” state, meaning that employers are permitted to fire employees with just cause, injust cause, or even no cause at all.

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