NONMONETARY ELIGIBILITY

This chapter provides information about state law provisions concerning nonmonetary eligibility requirements.

IN GENERAL

Along with monetary requirements, each state's unemployment insurance law requires workers to meet nonmonetary requirements. Federal law mandates some of these requirements. The general rule is that workers must have lost their jobs through no fault of their own and must be able, available, and actively seeking work. By examining the workers current attachment to the labor force, these provisions delineate the type of risk covered by unemployment insurance law - primarily, unemployment caused by economic conditions.

This chapter is organized from the perspective of a worker experiencing the claim process. First, the state would determine if there are any issues related to the worker becoming unemployed. Second, issues generally related to week-by-week eligibility would be explored. Third, the state would explore whether worker received any "deductible income" causing a reduction in benefits payable. Finally, if there is a question as to the legitimacy of a worker's claim, the state agency will have to determine whether it is fraudulent.

Caution. Nonmonetary requirements are, in large part, based on how a state interprets its law. Two states may have identical laws, but may interpret them quite differently.

Usage Note. There is a distinction between issues that result in disqualification and issues that result in weeks of ineligibility. A disqualified worker has no right to benefits until she or he requalifies, usually by obtaining new work or by serving a set disqualification period. In some cases benefits and wage credits may be reduced. An ineligible worker does not receive benefits only as long as the condition that causes ineligibility exists. Eligibility issues are generally determined on a week-by-week basis.

Federal law permits cancellation of wage credits for only three reasons: misconduct in connection with the work, fraud in connection with a claim, or receipt of disqualifying income. The severity of this type of penalty depends mainly on the presence or absence of additional wage credits during the base period. If the wage credits canceled extend beyond the base period for the current benefit year, the individual may not be monetarily eligible in the subsequent benefit year.

SEPARATIONS

VOLUNTARILY LEAVING WORK- Since the unemployment insurance program is designed to compensate wage loss due to lack of work, voluntarily leaving work without good cause is an obvious reason for disqualification from benefits. All states have disqualification provisions.

In most states disqualification is based on the circumstances of separation from the most recent employment. These disqualification provisions may be phrased in terms such as "has left his most recent work voluntarily without good cause." In a few states the agency looks to the causes of all separations within a specified period. A worker who is not disqualified for leaving work voluntarily with good cause is not necessarily eligible to receive benefits. For example, if the worker left because of illness or to take care of illness in the family, the worker may not be able to or available for work. In most states, this ineligibility would last only until the individual was again able and available.

Period of Disqualification--In most states the disqualification lasts until the worker is again employed and earns a specified amount of wages. In Alaska and Colorado, the disqualification is a fixed number of weeks (in Colorado, only for separations from the most recent employer); the longest period in either of these states is 10 weeks. Nebraska has a variable disqualification of up to 10 weeks. Maryland and North Carolina impose fixed duration disqualifications for certain conditions described in the following table.

Reduction of Benefit Rights--In some states, in addition to the postponement of benefits, benefit rights are reduced, usually equal in extent to the weeks of benefit postponement imposed.

Good Cause for Voluntary Leaving--In all states workers who leave their work voluntarily must have good cause if they are not to be disqualified.

In many states good cause is explicitly restricted to good cause connected with the work, attributable to the employer, or involving fault on the part of the employer. However, in a state where good cause is not explicitly linked to the work, the state may interpret its law to include good personal cause or it may limit it to good cause related to work. Since a state law limiting good cause to the work is more restrictive, it may contain specific exceptions that are not necessary in states recognizing good personal cause. (For example, an explicit provision not disqualifying a person who quits to accompany a spouse to a new job might not be necessary in a state which recognizes good personal cause; it would be necessary in a state restricting good cause to that related to the work.)

The following table indicates common "good cause" provisions. Other provisions are discussed in the text following the table.

Other Good Cause Provisions. Several states also specify various circumstances relating to work separations that, by statute, require a determination that the worker left with good cause. Arizona and Connecticut do not disqualify a worker for voluntary leaving because of transportation difficulties. Several states do not disqualify workers for voluntary leaving if they left work to accompany their spouse to a place from which it is impractical to commute. Arizona does not disqualify unemancipated minors for voluntary leaving if they left work to accompany their parent to a place from which it is impractical to commute. Colorado does not disqualify a worker who absent from work due to an authorized and approved voluntary leave of absence. North Carolina does not disqualify a worker for leaving work due to a unilateral and permanent reduction in full time work hours of more than 20% or reduction in pay of more than 15% and does not deny benefits to a worker based on separation from work resulting from undue family hardship when a worker is unable to accept a particular job because the individual is unable to obtain adequate childcare or elder care. Illinois does not deny a worker benefits for giving false statements or for failure to disclose information if the previous benefits are being recouped or recovered.

Louisiana does not apply the voluntary leaving disqualification if a worker left part-time or interim employment in order to protect full-time or regular employment. A similar Wisconsin provision says the disqualification will not be applied to a worker who leaves part-time work because of the loss of a full-time job that makes it economically unfeasible to continue the part-time work. Colorado does not disqualify a worker who quits a job outside his/her regular apprenticeable trade to return to work in the regular apprenticeable trade.

Colorado does not disqualify workers who leave a job because of personal harassment unrelated to the work. In addition, Colorado does not disqualify workers who have separated from employment because they were physically or mentally unable to perform the work.

Good Cause -Relation to Other Laws. California and Michigan specify that a worker who leaves a job with good cause if an employer deprived the individual of equal employment opportunities not based on bona fide occupational qualifications. Colorado and Kansas do not disqualify a worker for voluntary leaving if the individual was instructed or requested to perform a service or commit an act in the course of duties which is in violation of an ordinance or statute. Also, Colorado, Kansas, and Michigan do not disqualify a worker for voluntary leaving due to hazardous working conditions.

Good Cause and Labor Arrangements. Several state laws explicitly address separations that occur under collective bargaining agreements.

California, Colorado, and Illinois do not disqualify a worker who, under a collective bargaining agreement, elected to be laid off in place of an employee with less seniority. Iowa has a similar provision which does not require a collective bargaining agreement to be in place.

Delaware and New York do not disqualify workers for voluntary leaving if under a collective bargaining agreement or written employer plan they exercise their option to be separated, with the employer's consent for a temporary period when there is a temporary layoff because of lack of work. Oklahoma, Pennsylvania and Tennessee specify that a worker shall not be denied benefits for voluntarily leaving if he exercises his/her option of accepting a layoff pursuant to a union contract, or an established employer plan, program or policy. In Tennessee, however, a worker will be disqualified if the employer provides a monetary incentive (excluding wages in lieu of notice, separation allowance, or similar payment) for the separation which is greater than the maximum amount of benefits a worker would receive. Also, in Georgia and Tennessee if the separation was due to an agreement that permits the employee to accept a separation from employment the disqualification will not apply. However, in Tennessee the exclusion mentioned above also applies in this instance.

Kentucky does not disqualify workers for voluntarily leaving if they are separated due to a labor management contract or agreement or an established employer plan, program or policy that permits the employer to close the plant or facility for vacation or maintenance. Also, Kentucky does not disqualify workers for voluntarily leaving their next most recent work which was concurrent with the most recent work, or for leaving work that was 100 miles (one-way) from home to accept work less than 100 miles away, or if left part-time work to accept the most recent suitable work.

Oregon does not disqualify workers for voluntary leaving if they cease to work or fail to accept work when a collective bargaining agreement between their bargaining unit and their employer are in effect and the employer unilaterally modifies the amount of wages payable under the agreement, in breach of the agreement. Oregon does not disqualify workers for voluntarily leaving work and deems them to be laid off if: the worker works under a collective bargaining agreement; elects to be laid off when the employer has decided to lay off employees; and is placed on the referral list under the collective bargaining agreement.

In Wisconsin the voluntary leaving disqualification will not apply to a worker who terminates work with a labor organization which causes the employee to lose seniority rights granted under a union agreement, and if the termination results in a loss of the employee's employment with the employer which is a party to that union agreement.

Good Cause and Suitable Work. Several states have provisions prohibiting the application of the voluntary quit provision if the work was determined not to be suitable employment for the worker.

Illinois does not impose a disqualification if the worker accepted new work after separation from other work and, after leaving the new work, the new work was deemed unsuitable. Michigan and Missouri do not disqualify workers for voluntary leaving if they left unsuitable work within 28-60 days after beginning the work; Missouri allows 28 days and Michigan 60 days. Minnesota does not disqualify a worker for voluntary leaving if the accepted employment represented a departure from the individual's customary occupation and experience and the individual left the work within 30 days under specified conditions. New Hampshire allows benefits if a worker, not under disqualification, accepts work that would not have been suitable and terminates such employment within 4 weeks. New York provides that voluntary leaving is not in itself disqualifying if circumstances developed in the course of employment that would have justified the worker in refusing such employment in the first place. North Dakota does not apply the voluntary leaving disqualification if a worker accepted work which could have been refused with good cause and terminated the employment with the same good cause within the first 10 weeks after starting work. Wisconsin does not apply the voluntary leaving disqualification if the individual accepted work which could have been refused because of the labor standard provisions and terminated the work within 10 weeks of starting the work.

Colorado does not disqualify if the separation is determined to have been as a result of an unreasonable reduction in pay or as a result of refusing with good cause to work overtime without reasonable advance notice or as a result of a substantial change in the working conditions.

North Dakota also has a good cause provision for leaving work with the most recent employer to accept a bona fide job offer with a base period employer who laid off the individual and with whom the individual has a demonstrated job attachment. This requires earnings with the base period employer in each of six months during the five calendar quarters before the calendar quarter in which the individual files a claim for benefits.

Wisconsin will not apply the voluntary quit disqualification if a worker left to accept a job and earned wages of 4 times the weekly benefit amount, and the work offered average weekly wages at least equal to the wages earned in the most recent computed quarter in the terminated employment, or if the hours of work are the same or greater, or was offered the opportunity for longer term employment, or if the position duties were closer to the individual's home than the terminated employment. Also, in Wisconsin a disqualification will not apply if a worker claiming partial benefits left to accept work offering an average weekly wage greater than the average weekly wage in the work terminated.

Good Cause and Jobs for Temporary Service Employers. Several states contain provisions providing that, if an employee of a temporary service employer fails to be available for future assignments upon completion of the current assignment, the worker shall be deemed to have voluntarily left employment without good cause connected to the work. These states require the employer to provide the worker with notice that the worker must notify the temporary service upon the completion of an assignment and that failure to do so may result in benefit denial.

DISCHARGE FOR MISCONDUCT CONNECTED WITH THE WORK- The provisions for disqualification for discharge for misconduct follow a pattern similar to that for voluntary leaving. Many states provide for heavier disqualification in the case of discharge for a dishonest or a criminal act, or other acts of aggravated misconduct.

Some of the state laws define misconduct in the law in such terms as "willful misconduct" (Pennsylvania); "deliberate misconduct in willful disregard of the employing unit's interest" (Connecticut, Massachusetts, Rhode Island, South Dakota and Washington); "failure to obey orders, rules or instructions or for failure to discharge the duties for which the individual was employed" (Georgia); and a violation of duty "reasonably owed the employer as a condition of employment" (Kansas). Kentucky provides that "legitimate activity in connection with labor organizations or failure to join a company union shall not be construed as misconduct." Connecticut, on the other hand, includes as misconduct participation in an illegal strike as determined under state or federal laws. Texas defines misconduct to include any action that places others in danger or an intentional violation of employer policy or law, but does not include an act that responds to an unconscionable act of the employer. Maine defines misconduct to mean "a culpable breach of the employee's duties or obligations to the employer or a pattern of irresponsible behavior, which in either case manifests a disregard for a material interest of the employer." Detailed interpretations of what constitutes misconduct have been developed in each state's benefit decisions.

Disqualification for discharge for misconduct, as that for voluntary leaving, is usually based on the circumstances of separation from the most recent employment. However, as indicated in the following table, a few state laws require consideration of the reasons for separation from employment other than the most recent. The disqualification is applicable to any separation within the base period for a felony or dishonesty in connection with the work in Ohio, and for a felony in connection with the work in New York.

Period of Disqualification-Nine states have a variable disqualification for discharge for misconduct. In some the range is small, e.g., the week of occurrence plus 3 to 7 weeks in Alabama; in other states the range is large, e.g., 5 to 26 weeks in South Carolina.

Some states provide a fixed disqualification, and others disqualify for the duration of the unemployment or longer. Some states reduce or cancel all of the worker's benefit rights. Some states provide for disqualification for disciplinary suspensions as well as for discharge for misconduct. A few states provide the same disqualification for both causes.

Disqualification for Gross Misconduct--Some states provide heavier disqualification for what may be called gross misconduct. In a few of the states, the disqualification runs for 1 year; in other states, for the duration of the individual's unemployment; and in most of the states, wage credits are canceled in whole or in part, on a mandatory or optional basis.

The conditions specified for imposing the disqualification for discharge for gross misconduct are in such terms as: discharge for dishonesty or an act constituting a crime or a felony in connection with the worker's work, if such worker is convicted or signs a statement admitting the act (Florida, Illinois, Indiana, Nevada, New York, Oregon, Utah and Washington); conviction of a felony or misdemeanor in connection with the work ( Maine and Utah); discharge for a dishonest or criminal act in connection with the work (Alabama); gross or aggravated misconduct connected with the work (Maryland, Missouri and South Carolina); deliberate and willful disregard of standards of behavior showing gross indifference to the employer's interests (Maryland); discharge for dishonesty, intoxication including a controlled substance, or willful violation of safety rules (Arkansas); gross, flagrant, willful or unlawful misconduct (Nebraska); assault, theft or sabotage (Michigan); misconduct that has impaired the rights, property or reputation of a base-period employer (Louisiana); any act that would constitute a gross misdemeanor or felony (Minnesota); assault, bodily injury, property loss or damage amounting to $2,000, theft, sabotage, embezzlement or falsification of employer's records (Georgia); conduct evincing extreme, willful or wanton misconduct (Kansas); a deliberate act or negligence or carelessness of such a degree as to manifest culpability, wrongful intent or evil design (Colorado); and discharge for arson, sabotage, felony or dishonesty connected with the work (New Hampshire). Only Maryland includes a disciplinary suspension in the definition of gross misconduct.

KEY: W= Week of discharge; WF= Week of filing.
¹Reserved
²W means week of discharge and WF means week of filing claim. Applies to other than most recent separation from bona fide work only if employer files timely notice alleging disqualifying act, Alabama. Disqualification applicable to other than last separation, as indicated: from beginning of base period, Louisiana, Michigan and Ohio if unemployed because of dishonesty in connection with employment; within 1 year preceding a claim, Missouri. No days of unemployment deemed to occur for following 12 months if claimant is convicted or signs statement admitting act which constitutes a felony in connection with employment, New York. Any remuneration paid to the claimant by the affected employer prior to loss of employment due to the criminal act may not be used to establish entitlement to a subsequent, valid claim, New York. Reduction or forfeiture of benefits applicable to either most recent work or last 30 day employing unit, West Virginia.
³If discharged for assault or for theft at $100 or less, +12 times weekly benefit amount; if discharged for property loss or damages up to $2,000, theft over $100, sabotage or embezzlement, +16 times weekly benefit amount, Georgia. If discharged for intoxication or use of drugs which interferes with work, four to twenty six weeks; for arson, sabotage, felony, or dishonesty, all prior wage credits canceled, New Hampshire. If discharged for assault, arson, sabotage, grand larceny, embezzlement or wanton destruction of property in connection with work, claimant shall be denied benefits based on wages earned from that employer if admitted in writing or under oath or in a hearing of record or has resulted in a conviction, Nevada. If discharged for a felony or gross misdemeanor of which convicted or has admitted committing to a competent authority and is work connected all base year credits earned in any employment prior to discharge shall be canceled, Washington.
⁴Benefit rights held in abeyance pending result of legal proceedings; if gross misconduct constitutes a felony or misdemeanor and is admitted by the individual or has resulted in conviction in a court of competent jurisdiction, Illinois and Indiana.
⁵Option taken by the agency to cancel all or part of wages depends on seriousness of misconduct. Only wage credits canceled are those based on work involved in misconduct.
⁶In Maryland an individual can also be disqualified for aggravated misconduct.

LABOR DISPUTES- Unlike the disqualifications for voluntary leaving, discharge for misconduct, and refusal of suitable work, the disqualifications for unemployment caused by a labor dispute do not involve a question of whether the unemployment is incurred through fault on the part of the individual worker. Instead, they are more in the nature of an exclusion from coverage. This exclusion rests in part on an effort to maintain a neutral position in regard to the dispute and, in part, to avoid potentially costly drains on the unemployment funds.

The principle of "neutrality" is reflected in the type of disqualification imposed in all of the state laws. The disqualification imposed is always a postponement of benefits and in no instance involves reduction or cancellation of benefit rights. Inherently, in almost all states, the period is indefinite and geared to the continuation of the dispute-induced stoppage or to the progress of the dispute.

Definition of Labor Dispute--Except for Alabama, Arizona, Colorado, and Minnesota, no state defines labor dispute. The laws use different terms; for example, labor dispute, trade dispute, strike, strike and lockout, or strike or other bona fide labor dispute. Some states exclude lockouts, presumably to avoid penalizing workers for the employer's action; several states exclude disputes resulting from the employer's failure to conform to the provisions of a labor contract; and a few states, those caused by the employer's failure to conform to any law of the United States or the state on such matters as wages, hours, working conditions, or collective bargaining, or disputes where the employees are protesting substandard working conditions.

Location of the Dispute--Usually a worker is not disqualified unless the labor dispute is in the establishment in which the worker was last employed. Idaho omits this provision; North Carolina, Oregon, Texas and Virginia include a dispute at any other premises which the employer operates if the dispute makes it impossible for the employer to conduct work normally in the establishment in which there is no labor dispute. Michigan includes a dispute at any establishment within the United States functionally integrated with the striking establishment or owned by the same employing unit. Ohio includes disputes at any factory, establishment, or other premises located in the United States and owned or operated by the employer.

Period of Disqualification--In most states the period of disqualification ends whenever the "stoppage of work because of a labor dispute" comes to an end or the stoppage ceases to be caused by the labor dispute. In other states, disqualifications last while the labor dispute is in "active progress," and in Arizona, Connecticut, Idaho, Montana, New Mexico, North Dakota, Ohio, Rhode Island, South Dakota and Washington, while the workers' unemployment is a result of a labor dispute.

A few state laws allow workers to terminate a disqualification by showing that the labor dispute (or the stoppage of work) is no longer the cause of their unemployment. The Missouri law specifies that bona fide employment of the worker for at least the major part of each of 2 weeks will terminate the disqualification; the Michigan law provides that if a worker works in at least 2 consecutive calendar weeks, and earns wages in each week of at least the weekly benefit amount based on employment with the employer involved in the labor dispute, the disqualification will terminate; and the New Hampshire law specifies that the disqualification will terminate 2 weeks after the dispute is ended even though the stoppage of work continues. In contrast, the Arkansas, Colorado, North Carolina and Tennessee laws extend the disqualification for a reasonable period of time necessary for the establishment to resume normal operations; and Michigan and Virginia extend the period to shutdown and start up operations. Under the Maine, Massachusetts, New Hampshire and Utah laws, a worker may receive benefits if, during a stoppage of work resulting from a labor dispute, the worker obtains employment with another employer and earns a specified amount of wages. However, base-period wages earned with the employer involved in the dispute cannot be used for benefit payments while the stoppage of work continues.

Only one state provides for a definite period of disqualification. In New York a worker's benefit rights are suspended for 7 consecutive weeks if, unemployed because of a strike, lockout or concerted activity not authorized or sanctioned by the collective bargaining unit in the establishment where such individual was employed. However, benefit rights can accumulate before or after 7 weeks and the waiting period, if the controversy is terminated earlier. In addition to the usual labor dispute provision, Michigan, in a few specified cases, disqualifies for 6 weeks in each of which the worker must earn remuneration in 2 weeks equal to or great than their weekly benefit amount.

In Indiana termination of employment with the employer involved in the dispute is sufficient showing that the unemployment is not caused by the dispute.

Exclusion of Individual Workers-Most states provide that individual workers are not disqualified under the labor dispute provisions if they and others of the same grade or class are not participating in the dispute, financing it, or directly interested in it. Alabama, California, Delaware, Kentucky, New York, North Carolina, Ohio, Utah and Wisconsin do not exempt from disqualification those workers who are not taking part in the labor dispute and who have nothing to gain by it.

Connecticut provides that an apprentice, unemployed because of a dispute between his employer and journeymen, shall not be held ineligible for benefits if he is available for work. Indiana excludes from disqualification workers not recalled after the labor dispute has been terminated and sufficient time to resume normal activities has elapsed. Massachusetts provides specifically that benefits will be paid to an otherwise eligible individual from the period of unemployment to the date a strike or lockout commenced, if such individual becomes involuntarily unemployed during negotiations of a collective-bargaining contract. New Hampshire provides that a worker will not be disqualified if the stoppage of work was due to a lockout or a failure of the employer to live up to the provisions of any agreement or contract entered into between the employer and his employee. In Minnesota a worker is disqualified for 1 week if the individual is not participating in or directly interested in the labor dispute. Minnesota provides that a worker is not disqualified if he is dismissed during negotiations prior to a strike or if unemployment is caused by an employer's willful failure to comply with either federal and state occupational safety and health laws or safety and health provisions in a union agreement. Ohio provides that the labor dispute disqualification will not apply if the worker is laid off for an indefinite period and not recalled to work prior to the dispute or was separated prior to the dispute for reasons other than the labor dispute, or obtains a bona fide job with another employer while the dispute is still in progress. Oregon provides that the labor dispute disqualification will not apply if the worker was laid off prior to the dispute and did not work more than 7 days during the 21 calendar days immediately prior to the dispute or if during the dispute the individual's job or position was filled by a permanent replacement, and the individual unilaterally abandons the dispute and seeks reemployment with the employer. Tennessee provides that the labor dispute disqualification will not apply if the worker was indefinitely separated prior to the dispute and otherwise eligible. In Texas the unemployment must be caused by the worker's stoppage of work. Utah applies a disqualification only in case of a strike involving a worker's grade, class, or group of workers if one of the workers in the grade, class, or group fomented or was a party to the strike; if the employer or employer's agent and any of the workers or their agents conspired to foment the strike, no disqualification is applied.

ABILITY TO WORK- Only minor variations exist in state laws setting forth the requirements concerning ability to work. A few states specify that a worker must be physically able or mentally and physically able to work. Evidence of ability to work is the filing of claims and registration for work at a public employment office, required under most state laws. Missouri goes one step further requiring, by law, every individual receiving benefits to report to the nearest office in person at least once every 4 weeks.

Several states have added a provision that no worker who has filed a claim and has registered for work shall be considered ineligible during an uninterrupted period of unemployment because of illness or disability, so long as no work, which is suitable but for the disability, is offered and refused. These provisions are not to be confused with the special programs in six states for temporary disability benefits.

AVAILABILITY FOR WORK- Availability for work is often translated to mean being ready, willing, and able to work. Meeting the requirement of registration for work at a public employment office is considered as some evidence of availability. Nonavailability may be evidence by substantial restrictions upon the kind or conditions of otherwise suitable work that a worker can or will accept, or by his refusal of a referral to suitable work made by the employment service or of an offer of suitable work made by an employer. A determination that a worker is unable to work or is unavailable for work applies to the time at which notice is given of unemployment or for the period for which benefits are being claimed.

The availability-for-work provisions are more varied than the ability-to-work provisions. Some states provide that a worker must be available for suitable work; others incorporate the concept of suitability for the individual worker in terms of work in the worker's usual occupation or for which the worker is reasonably fitted by training and experience. The following table indicates these states and any special rules found in their laws.

Georgia and West Virginia specify the conditions under which workers on vacations are deemed unavailable or unemployed, and Georgia limits to 2 weeks in any calendar year the period of unavailability of workers who are not paid while on a vacation provided in an employment contract or by employer-established custom or policy. Mississippi considers a worker unavailable for work during a holiday or vacation period. North Carolina considers as unavailable a worker whose unemployment is found to be caused by a vacation for a period of 2 weeks or less in a calendar year.

In Nebraska and New Jersey no worker is deemed unavailable for work solely because they are on vacation without pay if the vacation is not the result of the workers own action as distinguished from any collective bargaining or other action beyond the individual's control. Under New York law an agreement by a worker or the individual's union or representative to a shutdown for vacation purposes is not of itself considered a withdrawal from the labor market or unavailability during the time of such vacation shutdown. Other provisions relating to eligibility during vacation periods--although not specifically stated in terms of availability--are made in Virginia, where a worker is eligible for benefits only if a bona fide vacation is found not to be, and in Washington, where it is specifically provided that a cessation of operations by an employer for the purpose of granting vacations shall not be construed to be a voluntary quit or voluntary unemployment. Tennessee does not deny benefits during unemployment caused by a plant shutdown for vacation, providing the individual does not receive vacation pay. However, workers who receive regular wages for a vacation under terms of a labor-management agreement will have their weekly benefit amount reduced by the amount of the wages received, but only if work will be available for the workers with the employer at the end of the vacation period.

Nebraska provides that a worker is considered employed when wages are received for a specific time in which the vacation is actually taken during a time of temporary layoff or plant shutdown and that vacation pay be prorated in an amount reasonably attributable to each week claimed and considered payable with respect to that week.

Alabama, Michigan, Ohio and South Carolina require that workers be available for work in a locality where their base-period wages were earned or in a locality where similar work is available or where suitable work is normally performed. Illinois considers workers to be unavailable if, after separation from their most recent work, they move to and remain in a locality where opportunities for work are substantially less favorable than those in the locality they left. Arizona requires that workers be, at the time they file a claim, a resident of Arizona or of another state or foreign country that has entered into reciprocal arrangements with the state. Oregon and Virginia consider workers unavailable for work if they leave their normal labor market area for the major portion of a week unless the worker can establish that they conducted a bona fide search for work in the labor market area where they spent the major part of the week.

Michigan, New Hampshire and West Virginia require that a worker be available for full-time work. In Wisconsin--where workers may be required at any time to seek work and to supply evidence of such search--the inability and unavailability provisions are in terms of weeks for which they are called upon by their current employer to return to work that is actually suitable and in terms of weeks of inability to work or unavailability for work, if their separation was caused by his inability to do his work or his unavailability for work. In New Hampshire, for disqualifying purpose, if workers are permanently physically and/or mentally disabled, full-time work for the workers will be deemed to be the hours and shifts the workers are physically able to work as certified by a licensed physician provided there is a market for the services the workers offer during such hours and shifts. Pennsylvania considers a worker ineligible for benefits for any week in which his unemployment is due to failure to accept an offer of suitable full-time work in order to pursue seasonal or part-time work.

AVAILABILITY DURING TRAINING-The Federal Unemployment Tax Act requires, as a condition for employers in a state to receive credit against the federal tax, that all state laws provide that compensation shall not be denied to an otherwise eligible worker for any week during which she or he is attending a training course with the approval of the state agency. Also, all state laws must provide that trade allowances not be denied to an otherwise eligible individual for any week during which he is in training approved under the Trade Act of 1974, because of leaving unsuitable employment to enter such training. In addition, the state law must provide that workers in training not be held ineligible or disqualified for being unavailable for work, for failing to make an active search for work, or for failing to accept an offer of, or for refusal of, suitable work.

Federal law does not specify the criteria that states must use in approving training. Although some state laws have set forth the standards to be used, many do not specify the types of training that are approvable. Generally, approved training is limited to vocational or basic education training, thereby excluding regularly enrolled students from collecting benefits under the approved training provision.

Some states, in addition to providing regular benefits while the worker attends an industrial retraining or other vocational training course, while the worker remains in training. See Chapter 4 concerning special extensions.

While in almost all states the participation of workers in approved training courses is voluntary, in the District of Columbia, Idaho, Missouri and Washington a worker may be required to accept such training. The department in Indiana is directed to provide job counseling or training to a worker who remains unemployed for at least 4 weeks. Also in Indiana the board determines manner and duration.

AVAILABILITY FOR PART-TIME WORK-The majority of states require workers to be available for full-time work. Other states allow workers to be available for part-time work under certain conditions. The following table indicates those states paying workers who previously worked in part-time employment and who continue to seek only part-time employment.

Note: Since most state laws do not specify whether the worker must be available for full-time or part-time work, the above table should be used with caution. The table is based on a survey performed by the Advisory Council for Unemployment Compensation in 1994 and updated with information provided to the Department.

ACTIVELY SEEKING WORK- In addition to registration for work at a local employment office, all states, whether by law or practice, except Pennsylvania, require that a worker be actively seeking work or making a reasonable effort to obtain work. Pennsylvania requires that the claimant be able and available for suitable work. Those states which apply actively seeking work through practice are Alaska, Arizona, Mississippi, Nebraska, Nevada, New York, Puerto Rico, South Dakota, Tennessee, and Texas.

REFUSAL OF WORK- All state laws address refusals of work, although they vary concerning the extent of the disqualification imposed. The Federal Unemployment Tax Act provides that all state laws must also look at the labor market and certain labor standards. Specifically, benefits will not be denied to any otherwise eligible individual for refusing to accept new work if:

• The position offered is vacant due directly to a strike, lockout, or other labor dispute;
  
  
• The wages, hours, or other conditions of the work offered are substantially less favorable to the individual than those prevailing for similar work in the locality; or
  
  
• If as a condition of being employed the individual would be required to join a company union or to resign from or refrain from joining any bona fide labor organization.

Criteria for Suitable Work-All states look at whether the work refused was suitable. When state laws list the criteria for suitability, they usually address the degree of risk to a worker's health, safety, and morals; the physical fitness and prior training, experience and earnings; the length of unemployment and prospects for securing local work in a customary occupation; and the distance of the available work from the worker's residence.

These criteria are modified in some states to include other stipulations. For example: in Alabama and West Virginia, no work is unsuitable because of distance if it is in substantially the same locality as the last regular employment which the worker left voluntarily without good cause connected with the employment; in Indiana, work under substantially the same terms and conditions under which the worker was employed by a base-period employer, which is within the prior training and experience and physical capacity to perform, is suitable work unless a bona fide change in residence makes such work unsuitable because of the distance involved.

Maine does not disqualify a worker for refusal of suitable work if he refuses a position on a shift, the greater part of which falls between midnight and 5 a.m., and he is prevented from accepting the job because of family obligations. Also, Maine excludes from suitable work a job the worker previously vacated if the reasons for leaving have not been removed or changed. Massachusetts deems work between the hours of 12 midnight and 6 a.m. not suitable for women. New Hampshire does not disqualify a worker for being unable for or unable to accept work during the hours of the third shift if the worker is the only adult available to care for children under age 15 during said hours or for the care of an ill or infirm elderly person who is dependent upon the worker's support.

Connecticut does not deem work suitable if as a condition of being employed, the worker would be required to agree not to leave the position if recalled by his previous employer. In Louisiana a worker may refuse work if the remuneration from the employer is below 60 percent of the individual's highest rate of pay in the base period. In Wisconsin a worker has a good cause during the first six weeks of unemployment for refusing work at a lower grade of skill or significantly lower rate of pay than one or more recent jobs.

Delaware and New York make no reference to the suitability of work offered but provide for disqualification for refusals of work for which a worker is reasonably fitted. Delaware, New York and Ohio provide that no refusal to accept employment shall be disqualifying if it is at an unreasonable distance from the worker's residence or the expense of travel to and from work is substantially greater than that in the former employment, unless provision is made for such expense. Also, Ohio and New York do not consider suitable any work a worker is not required to accept pursuant to a labor-management agreement. South Carolina specifies that whether work is suitable must be based on a standard of reasonableness as it relates to the particular worker involved.

In Illinois a worker will not be disqualified if the position offered by an employing unit is a transfer to other work and the acceptance would separate a worker currently performing the work. Iowa does not disqualify a worker for failure to apply for or accept suitable work if the individual left work in lieu of exercising a right to bump or oust an employee with less seniority. In Oregon a worker will not be disqualified for refusal of suitable work if the employer unilaterally modified the amount of wages agreed upon by the individual's collective bargaining unit and the employer. In Pennsylvania a worker will not be disqualified for refusal of suitable work when the work is offered by his employer, and the worker is not required to accept the offer pursuant to terms of a union contract or agreement or an established employer plan, program or policy.

North Carolina does not deny benefits to a worker for refusing a job resulting from undue family hardship when the individual cannot accept a particular job because the individual is unable to obtain adequate childcare or elder care.

A few states provide for changing the definition of suitable work as the duration of the individual's unemployment grows. The suitability of the offered wage is the factor states have chosen to alter. For example, Florida requires the agency, in developing rules to determine the suitability of work, to consider the duration of the individual's unemployment and the wage rates available. In addition, Florida law specifies that, after a worker has received 25 weeks of benefits in a single year, suitable work will be a job that pays the minimum wage and is 120 percent or more of the individual's weekly benefit amount.

Idaho law merely requires workers to be willing to expand their job search beyond their normal trade or occupation and to accept work at a lower rate of pay in order to remain eligible for benefits as the length of their unemployment grows. Louisiana will not disqualify a worker for refusing suitable work if the offered work pays less than 60 percent of the individual's highest rate of pay in the base period. Utah considers all earnings in the base year, not just earnings from the most recent employer, in the determination of suitable work and specifies that the agency will be more prone to consider work suitable the longer the worker is unemployed and less likely that the worker will secure local work in his or her customary occupation. Wyoming will apply the refusal-of-suitable work disqualification if, after 4 weeks of unemployment, the individual failed to apply for and accept suitable work other than his customary occupation offering at least 50 percent of the compensation earned in his or her previous occupation.

Georgia specifies that, after a worker has received 10 weeks of benefits, no work will be considered unsuitable if it pays wages equal to at least 66 percent of the individual's highest quarter earnings in the base period and is at least equal to the federal or state minimum wage.

Iowa law specifies that work is suitable if it meets the other criteria in the law and the gross weekly wage of the offered work bears the following relationship to the individual's high-quarter average weekly wage: (1) 100 percent during the first 5 weeks of unemployment; (2) 75 percent from the sixth through the 12th week of unemployment; (3) 70 percent from the thirteenth through the eighteenth week of unemployment; and (4) 65 percent after the eighteenth week of unemployment. No individual, however, is required to accept a job paying below the federal minimum wage.

After 12 weeks of unemployment, Maine no longer considers the individual's prior wage in determining whether work is suitable. After 8 weeks of unemployment, Mississippi law specifies that work is suitable if the offered employment pays the minimum wage or higher and the wage is that prevailing for the individual's customary occupation or similar work in the locality. Montana after 13 weeks of unemployment, specifies that a suitable work offer need only include wages equal to 75 percent of the individual's earnings in his previous customary insured work but not less than the federal minimum wage. North Dakota law specifies that after a worker has received 18 weeks of benefits, suitable work will be any work that pays wages equal to the maximum weekly benefit amount; providing that consideration is given to the degree of risk involved to the individual's health, safety, morals, his physical fitness and the distance of the work from his residence.

In Michigan the individual's experience and prior earnings will be limited. After 12 weeks a worker will be disqualified for refusing an offer of work if the wages for that week are at least 80 percent of pre-employment earnings, after thirteen to twenty weeks and 21 weeks and above if the wages are at least 75 percent and 70 percent respectively of the pre-employment earnings.

In New York a worker not subject to recall or who did not obtain employment through a union hall and is still unemployed after receiving 13 weeks of benefits is required to accept employment that the worker is capable of doing, provided the employment would result in a quarterly wage not less than 80 percent of the high quarter in the base period or the wages prevailing for similar work in the locality, whichever is less.

Period of Disqualification— Some states disqualify for a specified number of weeks (3 to 20) any workers who refuse suitable work; others postpone benefits for a variable number of weeks, with the maximum ranging from 1 to 12.

More than half the states disqualify, for the duration of the unemployment or longer, workers who refuse suitable work. Most of these specify an amount that the worker must earn, or a period of time the worker must work to remove the disqualification.

The relationship between availability for work and refusal of suitable work was pointed out in the discussion of availability. The Wisconsin provisions for suitable work recognize this relationship by stating: "If the commission determines that .... a failure to accept suitable work has occurred with good cause, but that the employee is unable to work or unavailable for work, he shall be ineligible for the week in which such failure occurred and while such inability or unavailability continues."

Of the states that reduce potential benefits for refusal of suitable work, the majority provide for reduction by an amount equal to the number of weeks of benefits postponed.

All state laws contain provisions addressing special groups of workers. The Federal Unemployment Tax Act requires the denial of benefits under certain circumstances to professional athletes, some aliens and school personnel while it also prohibits states from denying benefits solely on the basis of pregnancy or the termination of pregnancy. Like the Federal Unemployment Tax Act provisions, most of these special provisions restrict benefits more than the usual disqualification provisions.

WORKERS WITH MARITAL OBLIGATIONS-Several states have special disqualification provisions for unemployment because of marital obligations. Generally, the disqualification is applicable only if the individual left work voluntarily. The situations to which these provisions apply are stated in the law in terms of one or more of the following causes of separation: leaving to marry; to move with spouse or family; because of marital, parental, filial, or domestic obligations; and to perform duties of housewife.

STUDENTS--Most states exclude from coverage service performed by students for educational institutions. In addition, many states have special provisions limiting the benefit rights of students who have had covered employment. In some of these states the disqualification is for the duration of the unemployment; in others, during attendance at school or during the school term. In Iowa a student is considered to be engaged in "customary self-employment" and as such is not eligible for benefits; Idaho does not consider a student unemployed while attending school during the customary working hours of the occupation, except for students in approved training.

SCHOOL PERSONNEL--Federal Unemployment Tax Act law requires states to deny benefits to instructional, research or principal administrative employees of educational institutions between successive academic years or terms, or, when an agreement so provides, between two regular but not successive terms, if the individual performed such instructional, research or administrative services in the first year or term and has a contract or a reasonable assurance of performing such services in the second year or term. The denial also applies to vacation or holiday periods within school years or terms.

Federal Unemployment Tax Act permits a state, at its option, to deny benefits between successive academic years or terms to other employees of a school or by an educational service agency who perform services to or on behalf of an educational institution if the individual performed services (other than the three types described above) in the one year or term and has a reasonable assurance or a contract to perform services in the second year or term. The option for denial of benefits also applies to vacation or holiday periods within school years or terms. However, Federal Unemployment Tax Act requires states to pay benefits retroactively to school personnel performing these "other" services if they were given a reasonable assurance of reemployment but were not, in fact, rehired when the new school term or year began.

Kansas also applies a between and within-terms denial to school bus drivers not employed by governmental entities, nonprofit organizations or Indian tribes. Arizona has a similar disqualification which applies to school bus contractors.

Alaska provides state interim benefits, if money is appropriated from the general fund, to nonprofessional employees of educational institutions who are noncertificated and provide compensated services to a school district for teaching indigenous languages if the individual's benefits are reduced or denied under the between terms or during vacation period provisions of the law.

PROFESSIONAL ATHLETES-Federal Unemployment Tax Act requires states to deny benefits to a worker between two successive sport seasons if substantially all of the worker's services in the first season consist of participating in or preparing to participate in sports or athletic events and the worker has a reasonable assurance of performing similar services in the second season.

ALIENS-Federal Unemployment Tax Act requires denial of benefits to certain aliens. Benefits may not be paid based on service performed by an alien unless the alien is one who (1) was lawfully admitted for permanent residence at the time the services were performed and for which the wages paid are used as wage credits; (2) was lawfully present in the United States to perform the services for which the wages paid are used as wages credits; or (3) was permanently residing in the United States "under color of law," including one lawfully present in the United States under provisions of the Immigration and Nationality Act. (Note that aliens must also be legally authorized to work to be considered available for work.)

To avoid discriminating against certain groups in the administration of this provision, federal law requires that the information designed to identify ineligible aliens must be requested of all workers. Whether or not the individual is in an acceptable alien status is determined by a preponderance of the evidence.

DEDUCTIBLE INCOME

Almost all state laws provide that a worker is disqualified will not receive unemployment insurance for any week during which such worker is receiving or is seeking benefits under any federal or other state unemployment insurance law. A few states mention specifically benefits under the Federal Railroad Unemployment Insurance Act. Under most of the laws, no disqualification is imposed if it is finally determined that the worker is ineligible under the other law. The intent is to prevent duplicate payment of benefits for the same week. These disqualifications applies only to the week in which or for which the other payment is received.

Forty-six states have statutory provisions that a worker is disqualified for any week during which such worker receives or has received certain other types of remuneration such as wages in lieu of notice, dismissal wages, worker's compensation for temporary partial disability, holiday and vacation pay, back pay, and benefits under a supplemental unemployment benefit plan. In many states if the payment concerned is less than the weekly benefit amount, the worker receives the difference; in other states no benefits are payable for a week of such payments regardless of the amount of payment. A few states provide for rounding the resultant benefits, like payments for weeks of partial unemployment, to even 50 cent or dollar amounts.

Wages in Lieu of Notice and Dismissal Payments-A considerable number of states consider wages in lieu of notice to be deductible income. Many states have the same provision for receipt of dismissal payments as for receipt of wages in lieu of notice. The state laws use a variety of terms such as dismissal allowance, dismissal payments, dismissal wages, separation allowances, termination allowances, severance payments, or some combination of these terms. In many states all dismissal payments are included as wages for contribution purposes, as they are under the Federal Unemployment Tax Act. Other states exclude dismissal payments which the employer is not legally required to make. To the extent that dismissal payments are included in taxable wages for contribution purposes, workers receiving such payments may be considered not unemployed, or not totally unemployed, for the weeks concerned. Some states have so ruled in general counsel opinions and benefit decisions. However, under rulings in some states, workers who received dismissal payments have been held to be unemployed because the payments were not made for the period following their separation from work but, instead, with respect to their prior service.

Worker's Compensation Payments--Nearly half the state laws list worker's compensation under any state or federal law as disqualifying income. Some disqualify for the week concerned; the others consider worker's compensation deductible income and reduce unemployment benefits payable by the amount of the worker's compensation payments. A few states reduce the unemployment benefit only if the worker's compensation payment is for temporary partial disability, the type of worker's compensation payment that a worker most likely could receive while certifying ability to work.

Vacation Pay, Holiday Pay, and Back Pay-- Many states consider workers receiving vacation pay as not eligible for benefits; several other states hold workers eligible for benefits if they are on a vacation without pay through no fault of their own. In practically all states, as under the Federal Unemployment Tax Act, vacation pay is considered wages for contribution purposes--in a few states, in the statutory definition of wages; in others, in official explanations, general counsel or attorney general opinions, interpretations, regulations, or other publications of the state agency. Thus a worker receiving vacation pay equal to his weekly benefit amount would, by definition, not be unemployed and would not be eligible for benefits. Some of the explanations point out that vacation pay is considered wages because the employment relationship is not discontinued, and others emphasize that a worker on vacation is not available for work. Vacation payments made at the time of severance of the employment relationship, rather than dursing a regular vacation shutdown, are considered disqualifying income in some states only if such payments are required under contract and are allocated to specified weeks; in other states such payments, made voluntarily or in accordance with a contract, are not considered disqualifying income.

Retirement Payments-Federal Unemployment Tax Act requires states to reduce the weekly benefit amount of any individual by the amount, allocated weekly, of any "....governmental or other pension, retirement or retired pay, annuity, or any other similar periodic payment which is based on the previous work of such individual..." This requirement applies only to payments made under a plan maintained or contributed to by a base-period or chargeable employer which affected eligibility for or increased the amount of the retirement pay. States are permitted to reduce benefits on less than a dollar-for-dollar basis by taking into account the contributions made by the worker to the plan in question. (This effectively means the Federal Unemployment Tax Act requirement is limited to 100% employer financed pensions.) Also, the requirement applies only to those payments made on a periodic (as opposed to lump-sum) basis. As a result, the states have may choose from a variety of options in creating a retirement pay provision.

EFFECT OF SOCIAL SECURITY PAYMENTS.-Social Security payments are sometimes treated differently from retirement payments in general. The following table indicates the extent, if any, by which unemployment insurance is reduced due to receipt of Social Security payments.

Supplemental Unemployment Payments--A supplemental unemployment payment plan is a system whereby, under a contract, payments are made from an employer-financed trust fund to his workers. The purpose is to provide the worker, while unemployed, with a combined unemployment insurance and supplemental unemployment benefit payment amounting to a specified proportion of his weekly earnings while employed.

There are two major types of such plans: (1) those (of the Ford-General Motors type) under which the worker has no vested interest and is eligible for payments only if he is laid off by the company; and (2) those under which the worker has a vested interest and may collect if he is out of work for other reasons, such as illness or permanent separation.

All states except New Mexico, Puerto Rico, South Carolina and South Dakota have taken action on the question of permitting supplementation in regard to plans of the Ford-General Motors type. Of the states that have taken action, all permit supplementation without affecting unemployment insurance payments.

In 48 states permitting supplementation, an interpretive ruling was made either by the attorney general (27 states) or by the employment security agency (10 states); in Maine, supplementation is permitted as a result of a Superior Court decision and, in the remaining 10 states³ by amendment of the unemployment insurance statutes.

Some supplemental unemployment benefit plans of the Ford-General Motor type provide for alternative payments or substitute private payments in a state in which a ruling not permitting supplementation is issued. These payments may be made in amounts equal to three or four times the regular weekly private benefit after two or three weekly payments of state unemployment insurance benefits without supplementation; in lump sums when the layoff ends or the state benefits are exhausted (whichever is earlier); or through alternative payment arrangements to be worked out, depending on the particular supplemental unemployment benefit plan.

Relationship with Other Statutory Provisions--The eleven states² which have no provision for any type of disqualifying income except pensions and the larger number which have only two or three types do not necessarily allow benefits to all workers in receipt of the types of payments concerned. When they do not pay benefits to such workers, they rely upon the general able-and-available provisions or the definition of unemployment. Many workers receiving worker's compensation, other than those receiving weekly allowances for dismemberment, are not able to work in terms of the unemployment insurance law. However, receipt of worker's compensation for injuries in employment does not automatically disqualify an unemployed worker for unemployment benefits. Many states consider that evidence of injury with loss of employment is relevant only as it serves notice that a condition of ineligibility may exist and that a worker may not be able to work and may not be available for work.

All states have special disqualifications covering fraudulent misrepresentation to obtain or increase benefits. These disqualifications from benefits are administrative penalties. In addition, the state laws contain provisions for (a) the repayment of benefits paid as the result of fraudulent claims or their deduction from potential future benefits, and (b) fines and imprisonment for willfully or intentionally misrepresenting or concealing facts which are material to a determination concerning the individual's entitlement to benefits.

Recovery Provisions--All state laws provide for recovering benefits paid to workers who later are found not to be entitled to them. A few states provide that, if the overpayment is without fault on the individual's part, the individual is not liable to repay the amount, but it may, at the discretion of the agency, be deducted from future benefits. Louisiana provides alternative remedies for collection of overpayments by means of assessment and executory procedure. Louisiana, Massachusetts, Michigan and South Carolina permit collection of benefit overpayments from state tax refunds otherwise due the individual. Maine permits, under certain terms and conditions, collection of benefit overpayments from lottery winnings otherwise due the individual. Virginia permits a worker to use a credit card to pay overpayments. Some states limit the period within which recovery may be required--90 days in Tennessee; 1 year in Nevada and New Mexico; 2 years in Alaska, Florida, North Dakota and Washington; 3 years in Indiana, Louisiana, Maryland, Michigan, Nebraska, Ohio, Utah, and Wyoming; 4 years in Arkansas and New Jersey; 5 years in Colorado, Delaware (however overpayments may be written off within 3 years), Idaho, Illinois, Kentucky, Mississippi, and Vermont; 6 years in Alabama, Massachusetts, and Minnesota; and 8 years in Connecticut and Idaho. In Oregon recovery is limited to the existing benefit year and the 52 weeks immediately following. In Oklahoma recovery continues into the next subsequent benefit year that begins within 1 year of the expiration of the current benefit year. Twelve states³ provide that, in the absence of fraud, misrepresentation, or nondisclosure, the individual shall not be liable for the amount of overpayment received without fault on the individual's part where the recovery thereof would defeat the purpose of the act and be against equity and good conscience. Thirteen other states⁴ provide that recovery may be waived under such conditions. In Minnesota benefits paid through error or fraud may be waived if determined uncollectible due to death or bankruptcy or overpayments. In Virginia benefit overpayments of $5 or less may be suspended from recovery. Colorado may write off a nonfraud overpayment after five years but is not required to do so; fraud overpayments may be, but are not required to be, written off after seven years.

In many states the recovery of benefits paid as the result of fraud on the part of the recipient is made under the general recovery provision. More than half the states⁵ have a provision that applies specifically to benefit payments received as the result of fraudulent misrepresentation. All but a few states provide alternative methods for recovery of benefits fraudulently received; the recipient may be required to repay the amounts in cash or to have them offset against future benefits payable. New York provides that a worker shall refund all moneys received because of misrepresentation; and Alabama, for withholding future benefits until the amount due is offset. In Massachusetts, Minnesota, Oregon, Texas, Vermont and Wisconsin the commission may, by civil action, recover any benefits obtained through misrepresentation. Delaware, Georgia, Kansas, Kentucky, Maryland, Massachusetts, Michigan, Montana, North Dakota, Ohio, Oklahoma, Oregon, Pennsylvania, and Washington charge interest on fraudulently obtained benefits. Also, in Arizona through regulation interest is computed monthly on all outstanding unemployment insurance overpayments with certain exceptions. In Colorado, Georgia and Wyoming a penalty is assessed and also in Louisiana if legal collection efforts are pursued. In Kansas, Maryland, and Oklahoma the accrued interest may not be offset against future benefits.

Criminal Penalties--Nine state laws (Alaska, Georgia, Hawaii, Maryland, Minnesota, North Carolina, North Dakota, Tennessee and Virginia) provide that any fraudulent misrepresentation or nondisclosure to obtain, increase, reduce, or defeat benefit payments is a misdemeanor or felony in Minnesota, punishable according to the state criminal law. Under the Kansas law, anyone making a false statement or failing to disclose a material fact in order to obtain or increase benefits is guilty of theft and punishable under the general criminal statutes. These states (excluding Alaska) have no specific penalties in their unemployment laws with respect to fraud in connection with a claim. In Alaska and Colorado, the unemployment insurance law provides for a penalty of 50 percent of fraudulently received benefits; however, this penalty may be waived (Colorado denies four weeks for every week of fraudulently received benefits). These states therefore rely on the general provisions of the state criminal code for the penalty to be assessed in the case of fraud. Fraudulent misrepresentation or nondisclosure to obtain or increase benefits is a felony under the Idaho and Florida laws, and larceny under the Puerto Rico law. The other states include in the law a provision for a fine (maximum $20 to $2,000) or imprisonment (maximum 30 days to 1 year), or both (For additional information, see the following table.). In a few states the penalty on the employer is greater, in some cases considerably greater, than that applicable to the worker. Usually the same penalty applies if the employer knowingly makes a false statement or fails to disclose a material fact to avoid becoming or remaining subject to the act or to avoid or reduce contributions. New Jersey imposes a fine of $250 to $1,000 if an employer files a fraudulent contribution report, and imposes the same fine if an employer aids or abets a worker in obtaining more benefits than those to which the worker is entitled. A few states provide no specific penalty for fraudulent misrepresentation or nondisclosure; in these states the general penalty is applicable (See footnote 4 in the following). The most frequent fine on the worker is $20- $50 and on the employer, $20-$200.

Disqualification for Misrepresentation--The provisions for disqualification for fraudulent misrepresentation follow no general pattern. In nine states⁶ there is a more severe disqualification when the fraudulent act results in payment of benefits; in California, New Hampshire, Oregon, Pennsylvania and Virginia, when the worker is convicted.

In California any worker convicted of misrepresentation under the penalty provisions is disqualified for 1 year. In Rhode Island and Wyoming there is no disqualification unless the worker has been convicted of fraud by a court of competent jurisdiction. On the other hand, in Hawaii, Puerto Rico, Vermont and the Virgin Islands a worker is not subject to the administrative disqualification if penal procedures have been undertaken; in Massachusetts, administrative disqualification precludes initiation of penal procedures.

Seventeen states include a statutory limitation on the period within which a disqualification for fraudulent misrepresentation may be imposed (See footnote 3 in the following table). The length of the period is usually 2 years and, in six states, the period runs from the date of the offense to the filing of a claim for benefits. In these states the disqualification can be imposed only if the individual files a claim for benefits within 2 years after the date of the fraudulent act. In Connecticut the disqualification may be imposed if a claim is filed within 6 years after the benefit year in which the offense occurred. In four states the disqualification may be imposed only if the determination of fraud is made within 2 or 4 years after the date of the offense.

In many states the disqualification is, as would be expected, more severe than the ordinary disqualification provisions. In 17 states the disqualification is for at least a year; in others it may last longer. The provisions are difficult to compare because some disqualifications start with the date of the fraudulent act, while others begin with the discovery of the act, the determination of fraud, the date on which the individual is notified to repay the sum so received, or conviction by a court; some begin with the filing of a first claim, while others are for weeks that would otherwise be compensable. The disqualification provisions are, moreover, complicated by tie-in with recoupment provisions and by retroactive imposition.

As the following table shows, the cancellation of wage credits in many states means the denial of benefits for the current benefit year or longer. A disqualification for a year means that wage credits will have expired, in whole or in part, depending on the end of the benefit year and the amount of wage credits accumulated for another benefit year before the fraudulent act, so that future benefits are reduced as if there had been a provision for cancellation. In other states with discretionary provisions or shorter disqualification periods, the same result will occur for some workers. Altogether, misrepresentation involves cancellation or reduction of benefit rights in 34 states and may involve reduction of benefit rights for individual workers in 15 more states. The disqualification for fraudulent misrepresentation usually expires after a second benefit year, but in California it may be imposed within 3 years after the determination is mailed or served; in Ohio, within 4 years after a finding of fraud; and in Arkansas and Washington, within 2 years of such finding. In 10 states⁷ the agency may deny benefits until the benefits obtained through fraud are repaid. In Virginia the denial is limited to 5 years. In Minnesota, if benefits fraudulently obtained are not repaid promptly, such amounts are deducted from future benefits in the current or any subsequent benefit year. In Colorado, benefits are denied if a worker's court trial for commission of a fraudulent act is prevented by the inability of the court to establish its jurisdiction over the individual. Such ineligibility begins with the discovery of the fraudulent act and continues until such time as the individual makes himself available to the court for trial. In Maryland the time limit for repayment is 5 years following the date of the offense, or 1 year after the year disqualification period, whichever occurs later. After this period a worker may qualify for benefits against which any part of the repayment due may be offset. In Louisiana repayment is limited to the 5 year period following a determination of fraud--a period which may be lengthened under specified circumstances.

ENDNOTES