Unemployment Benefits: Who is Eligible & How to Minimize Claims

A struggling economy often swells both the ranks of people working temporary jobs and the number of businesses using them.

But the influx of new workers and employers into the temporary staffing market inevitably leads to some questions:

  • Once an assignment is over, is the former employee eligible for unemployment benefits?
  • Is the business on the hook to pay for them?
  • What is the role of the staffing agency?

Who Qualifies for Unemployment Benefits

In simple terms, temporary workers count just like regular employees. But because temporary workers are considered employees of the temp agency and not the business where they worked, the agency is responsible for any unemployment claims.

“For most workers, if you’re in temp work, whether you qualify for benefits should be no different than any other worker,” says Maurice Emsellem, policy co-director at the National Employment Law Project, a national advocacy group for employment rights.

Requirements to qualify for benefits vary from state to state, but for most states, the worker must have worked the first four of the last five calendar quarters and earned a minimum of $1,500 to $3,000 in some portion of that time. Agencies need to check with their state unemployment agency for specifics.

The employee must also have left the prior job for the right reasons. If the employee was fired or quit, the agency most likely won’t have to worry about an unemployment claim.

“If a temp worker signed on for a particular assignment, does the assignment and the assignment is over, there should be no reason why those folks don’t qualify for benefits,” Emsellem says.

Most states will assume the employee is continuing to look for work and accepting any available temporary work assignments.

“As long as a temp worker in that situation is out there looking for a job, a job that matches their skills and work history, then they should qualify for benefits,” he says.

How to Minimize Claims

While temp agencies have a vested interest in keeping unemployment claims to a minimum, jobs offered to temporary workers have to match their skill sets for an unemployment claim to be denied. Offering a highly skilled administrative assistant a manual labor assignment unloading trucks isn’t going to be enough for the claim to be denied. If the administrative assistant is turning down office work, then the odds of having the claim denied go up.

“Sometimes what temp agencies do is they will offer the worker any type of job and then they put the worker in the position to say, ‘I’m looking for a job that meets my skills and work history. Just because I worked a temp job doesn’t mean that any job you offer me is a job I have to take to qualify for benefits,’” Emsellem says. “That’s the issue that comes up most. The temp agencies will always have another job by definition. That doesn’t mean that that’s a suitable job for every worker.”

Each state will typically have a definition of “suitable work” to make a determination of whether a job assignment should have been accepted or not, but common sense should be your first guide.

Federal law dictates states cannot deny unemployment benefits to eligible employees for refusing to accept new work if the wages, hours or other conditions of the work offered are substantially less favorable to the individual than those prevailing for similar work.

For temp agencies, the best strategy is to match the proper job opportunities with the right candidates to minimize claims.

For more information on benefits, check out the most recent issue of TemPay Staffing Times, which has an article about temporary employee benefits such as health care and 401(k), by clicking here.