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Does Poor Job Performance Lead to Unemployment Benefits?

EverythingHR Staff | 08/24/2018 | Blog, Featured
Photo by Hutomo Abrianto on Unsplash


Unemployment Tip: September 2018

Many employers already know that when it comes to protesting unemployment claims, nothing is completely black and white. That is especially true when an unemployment claim arises for a former employee that was terminated for poor job performance. In fact, job performance issues may be the ultimate gray area when it comes to protesting unemployment claims.

At its most basic level, the unemployment system exists to offer temporary financial assistance to people who have lost their jobs through no fault of their own. The most clear-cut example of this is the person who is laid off due to lack of work. A layoff implies that the worker was not at fault for the job separation.

So, which party is considered to be at fault when a job separation is the result of poor job performance? The short answer is, it depends. To see why, we can explore the most common scenarios involved in job performance separations.

  • Incapable of performing. In many job performance separations, the employee was determined by the employer to be incapable of performing the job. “Incapable,” in this context, means that the employee lacked the required knowledge, skills or ability to perform the job for which they were hired. When determining unemployment eligibility, the state workforce agencies do not consider lack of ability to be the fault of the claimant. Rather, they will consider this to be a poor job fit and place the responsibility on the employer for having made a poor hiring decision.
  • Decline in job performance.  If an employee demonstrated competency in their job for a period of time, but later their performance declined, it may be possible to make the case that the decline in job performance was within the employee’s control. In this scenario, we’re not dealing with a case of poor job match, but rather an employee who has stopped performing skills they have previously proven to be competent in. This scenario is by no means an open and shut case when protesting the unemployment claim and to have the best chance of prevailing, detailed documentation is necessary. You would want to have documentation of the employee’s ability to do the job, such as prior performance reviews in which they received positive ratings. The purpose of this documentation is to show that the employee is not lacking in skill or ability and had clearly performed the job functions well previously. This allows you to contrast their documented abilities with their more recent failure to perform in those same job tasks, therefore showing that the lack of performance that led to termination was actually within the employee’s control.

Unemployment claims resulting from job performance separations are the most difficult to win because fault (or misconduct) on the part of the employee is often very hard to prove conclusively. In many cases, you as the employer may even agree that there was no misconduct and that it was simply a poor job fit. When that is the case, protesting the claim likely doesn’t make sense. However, there are some important things that employers can keep in mind to help reduce their liability related to job performance terminations.

  • Documentation is important. If you feel that there was, in fact, misconduct on the part of the employee (as in the example above discussing declines in performance), you must have the documentation to support that assertion. Without documentation, it is very unlikely that an employer will prevail when protesting a job performance case.
  • Length of employment makes a difference. If you agree that there was no misconduct, they tried their best but simply were not able to do the job, it doesn’t make sense to protest the unemployment claim. However, it is important to keep in mind that unemployment benefits (in most states) are based on wages earned. That means the sooner you determine that the job is not a good fit, the lower your liability will be on any subsequent unemployment claim. In addition, some states have provisions in their laws that protect employers from liability if an employee is discharged for poor job performance during a defined probationary period (the probationary periods are defined by each state, not by the employer).

Your EverythingHR team can help you review the facts of each job performance case to determine whether a protest is appropriate. We can also review with you the laws in specific states to determine if there is a probationary period that you should be aware of in order to further reduce your liability on future unemployment claims.