Unemployment Benefits

1. Under what circumstances can an employee be disqualified from receiving unemployment benefits?

Under most state laws, there are only a few ways former employees can be disqualified from receiving benefits, primarily by being fired for work-related misconduct or voluntarily quitting without good cause attributable to the job.

States define "misconduct" differently, but it usually means negligently or willfully disregarding a company's interests, or deliberately and repeatedly violating company rules.

"Good cause" is typically defined as a real, substantial, and compelling reason that would cause a reasonable person to quit. It can arise from unreasonable discipline (e.g., discipline that is excessive or shows that an employer was hostile or abusive), health reasons (e.g., employees reasonably believe their work environment endangers their health or safety), or an extreme family reason.

2. If an employer asks an employee who gave two weeks' notice to leave immediately, is the employee eligible for unemployment benefits for those two weeks?

Generally, if an employee gives notice, but is told to leave immediately, the employer will be considered the "moving party" in the termination. Thus, the employee will be considered as having been fired, and will probably qualify for unemployment insurance benefits.

3. If an employer terminates the services of an independent contractor who signed a contract stating that he/she was not considered an employee, is he/she entitled to unemployment compensation?

Maybe. Regardless of how clear a contract is, employers and employees cannot simply contract away a worker's employment status. If a worker is an employee, the existence of a contract is meaningless.

It is also irrelevant if the worker is called something else, such as partner, co-adventurer, agent, or independent contractor. And it doesn't matter how the worker's payments are measured (by the day, week, month), how they're made, or what they're called. In fact, one of the most common ways for employers to encounter the employee/independent contractor dilemma is when a so-called independent contractor files for unemployment or Workers' Compensation benefits. And the issue is generally the same (whether it's the IRS or state unemployment office making the determination): Is the worker under the direction and control of the employer? This determination, of course, will vary state to state.