(1st in a 3 part series)
Q. Our long term nanny quit two months ago to go work for another family. Today I received an unemployment claim form in the mail. Why?
A. A nanny who becomes unemployed may file a claim for unemployment insurance benefits, but must first meet various requirements, including monetary eligibility, continuing eligibility, and qualification requirements.
If your former nanny left to take another job, this will generally be considered quitting for 'good cause,' or in other words not disqualifying her from eligibility. And if that new job terminated through no fault of her own, she is entitled to file for unemployment benefits.
IN GENERAL, the state unemployment office will look at the circumstances of her job termination, and look at her work history (monetary eligibility) to determine her eligibility for benefits and the amount of benefit she is entitled to. The look back period for determining monetary eligibility is typically four calendar quarters, and the current quarter is not part of the calculation. Some states disregard the current quarter as well as the quarter immediately preceeding it. In any event, she was your employee during some or all of the look back period, and her wage history with you is relevant to her benefit calculation.
Q. Will my family be charged for her unemployment benefits?
A. How benefits are charged to a former employer's unemployment tax account varies between states. Typically charges are prorated when there are multiple employers in the look back period. For example:
If you are the only employer who paid wages to the nanny for covered employment in her base period, you are the only employer with potential liability for benefits paid on the claim. However, if the nanny was paid wages for covered employment by more than one employer in her base period, the liability for benefit payments is generally prorated. Each employer is then responsible for a percentage of each payment, which is equal to the percentage of the total base period wages paid to the claimant by that employer.
Total base period wages = $40,000
Covered base period wages paid by YOUR FAMILY = $30,000 (75%)
Covered base period wages paid by 2ND EMPLOYER = $10,000 (25%)
If the former nanny is paid an unemployment check in the amount of $240, each employer’s charge is as follows:
YOUR FAMILY = $180 (75%)
2ND EMPLOYER = $60 (25%)
Payments are made from the state's unemployment fund, which receives its money through the employer unemployment taxes you have paid. Your family will not pay the benefits directly to the nanny or be directly billed for the amount of the benefit; however, the calculation of your unemployment tax rate will take these payments into account and your rate may increase in the new year.
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» FAQ: Nanny At Will Employment and Unemployment Benefits
» Blog Post: Our Nanny Quit. Can She Collect Unemployment?
» Blog Post: Nanny Unemployment Benefits: Eligibility Guidelines
» Blog Post: Nanny Unemployment Benefits and Temporary Employment