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    4 Tips to Minimize Unemployment Claims at Your Restaurant

  • Managing employees at a restaurant can be costly, especially in an industry with notoriously high turnover.

    Thinkstock / monkeybusinessimages
    The bottom line is unemployment claims are a fact of business and many employees should rightfully receive these benefits.

    Restaurants can have high operating costs, and not just for materials and food. Managing employees at a restaurant can be costly, too, especially in an industry with notoriously high turnover. One way to mitigate some of the personnel costs is to focus on minimizing the unemployment claims at your restaurant.  

    Unemployment benefits are something employees could be entitled to when they are laid off or let go because of lack of work, or because the employee was not performing well. The more employees that a restaurant has collecting unemployment benefits, the more the company will pay in State Unemployment (SUTA) taxes.   

    Because the restaurant industry does have such high turnover, unemployment claims are something restaurants deal with all the time, but if an employee quits or was fired because of a policy violation or misconduct, restaurants have the right to argue that the person shouldn’t receive unemployment benefits. Here are four ways to do that:  

    Make sure you get a resignation letter. This is easiest place for restaurants to start. If an employee quits, it’s crucial to get some sort of documentation from that employee saying that they are choosing to leave. Even an email or text message could work, but the key is to have documentation to show a judge that the employee left on their own terms and is no longer able and available to work at your company. The most important things to make sure you get from an employee is their resignation date and a signature (or even email address) to show it came from them. 

    Make sure all employees are signing a handbook. Unemployment benefits aren’t meant to cover employees that are let go or terminated because of a willful violation of a company procedure. Some examples of this could be failing to show up for assigned shifts without an excuse, harassing another employee, stealing, etc.  

    When employees sign a handbook, they are showing that they are aware of the company policies that they must abide by, and therefore if they fail to do so, the company is better able to prove that these actions were willful. If your handbook doesn’t currently clearly document the types of action that could result in termination, it is a good idea to review and update your policies. 

    Document all warnings of handbook violations or performance issues. If an employee is let go because they were terminated after going through the steps of progressive discipline, restaurants need to make sure they’re documenting all steps of the process. This is another method that Restaurants can use to prove that an employee’s actions were intentional and willful, because they were given multiple opportunities to change their behavior and coached on how to follow policy.  Restaurants need to show an unemployment judge they tried their best to make it work with the employee and help them improve. 

    Don’t let emotions get in the way. It can be easy to get frustrated with the unemployment process, especially when protesting the claim of an employee who was terminated for misconduct but bad mouthing the employee or acting unprofessionally will only hurt your chances of succeeding.     

    Whether in your initial write-up or during the phone hearing, it’s crucial to stay objective and use evidence and facts to back up your argument. Don’t talk negatively about the employee.  

    The bottom line is unemployment claims are a fact of business and many employees should rightfully receive these benefits. As a restaurant, it’s important not to worry about winning all your unemployment claims but to be aware that some former employees shouldn’t collect benefits and when you don’t take action, it’s costing your restaurant. 

    Emily Parra is the HR Compliance Manager at StratEx, a national human resources software and consulting firm specializing in the restaurant industry. Emily works with restaurants and restaurant groups of all sizes to help them navigate complex labor laws and policies. Emily's expertise lies in helping organizations reduce risk by ensuring compliance with all applicable labor and employment laws.