Settling strike by paying for missed work may cut unemployment tab — Business Management Daily: Free Reports on Human Resources, Employment Law, Office Management, Office Communication, Office Technology and Small Business Tax Business Management Daily
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Settling strike by paying for missed work may cut unemployment tab

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When it’s time to settle a strike, and that settlement includes paying for some of the time employees missed either because they were on the picket line or you laid them off, be aware of the language you use to describe the payment.

Here’s why: To be eligible for unemployment, employees have to show they performed no services and “no remuneration is payable to the individual” during a particular week. If you word the settlement to show the payment is for a missed period of work and treat the payment as you would wages earned (i.e., withhold taxes), then chances are the employees won’t get unemployment for that week, too.

Recent case: A group of General Motors employees were laid off when other GM employees went on strike. They applied for unemployment. One of the weeks they missed was the week previously designated as the Independence Day week shutdown. Employees who worked the day before the week began and the day after it ended would ordinarily be paid for the entire week. But due to the strike and layoffs, the group was not paid.

GM and the union settled the strike, and GM agreed to pay for the weeklong shutdown. The settlement specifically stated the payment was for the Independence Day week period, and employees got a check minus taxes. Still, they wanted unemployment.

The Supreme Court of Ohio rejected their claim. Because the payment was very specific and referenced the holiday week, they weren’t eligible for unemployment that week—they already had received remuneration. (Geretz, et al., v. Ohio Department of Job and Family Services, et al., No. 2006-0405, Supreme Court of Ohio, 2007)

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