If one of your household employees recently filed for unemployment benefits, you might be feeling unsure about your next steps. Don't worry—this is a common situation, and we're here to guide you through it. Understanding what it means when a former employee files an unemployment claim can help you respond properly and avoid any potential complications. Let’s break down the basics of unemployment claims and explain what’s required of you as an employer.
Understanding Unemployment Claims
An unemployment claim is filed when an employee seeks unemployment benefits after losing their job. This system is designed to provide financial support to individuals who are out of work due to circumstances beyond their control. The person receives regular payments, which are typically a percentage of their previous wages, for a limited period, usually up to 26 weeks. To qualify, they must be actively seeking work, enrolled in a job training program, and able to work.
As a household employer, you fund unemployment benefits through state unemployment taxes. The good news is that since you've already paid into the system, you won’t be directly responsible for paying the unemployment benefits themselves.
Tip: Did you know the most common way families get caught paying "off the books" is when a former household employee files an unemployment claim? Always ensure your household payroll is legally compliant to avoid this risk.
What Happens When a Former Employee Files a Claim?
Once your former employee files for unemployment benefits, you'll receive a notification from the state. The state will ask you to confirm details about the employee’s separation from your household, including the reason for termination and any compensation still owed, like severance, unused vacation time, or a final paycheck.
Important: Always respond to the state's inquiry! Many states impose fines if you don’t reply on time or fail to respond.
If you let your nanny or other household employee go due to incompatibility or issues with attendance, the employee will likely still be eligible for benefits unless you have solid documentation showing misconduct. Misconduct could include dishonesty, violation of household rules, chronic tardiness or absences, or behavior that puts your family at risk.
What If the Nanny Left Voluntarily?
If your employee left for another job and that new job didn’t work out, you might still receive a notification about their unemployment claim. This happens because unemployment benefits can be distributed among all employers the nanny worked for during the state's "base period," which typically covers the last 52 weeks.
Common Reasons Families Let Nannies Go
Often, families let nannies go because their circumstances have changed. For example, children may start full-time school or transition to a child care facility, or the family may relocate to a new area. In these cases, since the job ended for reasons unrelated to the nanny's performance, the nanny will likely qualify for unemployment benefits.
Need Help Navigating Unemployment Claims?
If you’re still unsure about how to handle an unemployment claim, our team at HomeWork Solutions is here to help. We can walk you through setting up your household payroll properly from the start, including establishing your unemployment insurance account. And if you ever have to terminate an employee, we’re here to guide you through the process and answer any questions that come up.
Feel free to reach out for expert guidance. We're committed to making household payroll and tax compliance stress-free for you.
Get Started with HomeWork Solutions Today!
At HomeWork Solutions, we have over 30 years of experience helping families navigate household payroll and tax compliance for all types of employees. Contact us today for trusted support tailored to your needs.