Unemployment Claim is defined as the request which is made by an individual employee to the higher authority mainly the state government so as to receive the temporary payments after they have been laid off from their jobs. The labor department of each country keeps a track of the unemployment claims coming every week. Also referred as Unemployment insurance claim or unemployment insurance compensation.
The compensation claim is only meant for a few weeks and is usually lesser than the normal wages of an employee/ worker. The effect on the employer may be small or minor depending on the circumstances under consideration, the main determinants include:
1. Type of employee units who are employed in an organization.
2. The date and time of applying for the claim
3. Duration or length of service the employee was engaged in the organization before applying for the claim.
4. The wages/ salaries which the employee used to get before applying for such claims.
Ways through which the impact of unemployment insurance/compensation/claim can be minimized include:
a) Having a thorough and clear cut understanding about the various compensation laws of the state/ country. Taxation agency for eg in India the Income tax department can provide with the details of such regulations. Also, the HR person should be clear of the different kinds of terminations or layoffs which can act as a trigger for unemployment claims, and should try and avoid them as far as possible.
b) Do not go for anything and everything possible i.e the employees should not be able to file claims which are unjustifiable and are against the basic policies of the organization as well are unethical. It takes time to deal with such kinds of claims but for the benefit of the organization in the long run it’s the need of the hour. The insurance agency with which the organization ties up let’s the organization know about such claims.
c) The company should keep all the records pertaining to the taxation and the charges against all the past, present and prospective employees. It helps in overcoming any false claims by the employees which may happen in future.