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Optimizing HRIS Separation Codes for Improved Unemployment Claims Handling

By November 8, 2023No Comments
Unemployment Team HR

In our tech-centric professional landscape, the Human Resource Information System (HRIS) stands as a beacon of efficiency for HR departments. Among its myriad features, one particularly stands out: separation codes. These standardized labels offer a snapshot into why employees leave organizations. They’re invaluable for internal management, but a question arises when they become the primary source for addressing state unemployment claims. Let’s delve into why this over-reliance might be a misstep for employers.

Decoding HRIS Separation Codes for State Unemployment Claims

HRIS codes, fundamentally designed for streamlining and categorizing employee separations, bring undeniable ease to internal HR processes. They encapsulate diverse reasons for departures under unified terms, ensuring consistency in internal records. However, challenges arise when these same codes intersect with the requirements of state unemployment criteria, which function on a more regulatory and evaluative level.

For example, while an HRIS might succinctly label an employee’s departure as “underperformance,” state agencies could probe deeper into the reasons — was it due to external challenges, lack of proper training, or Anxious workerwillful negligence? Similarly, an HRIS categorization of “voluntary resignation” might internally be unambiguous, but state agencies might delve into the root causes, such as a toxic work environment leading to what they might deem as constructive dismissal.

The risk summary of using HRIS codes is that they might not fully capture the intricacies of an employee’s departure, potentially leading to misunderstandings, disputes, and legal challenges when it comes to benefits eligibility.

Employer Best Practices: Striking a Balance

For employers, the key lies in finding a balance. The efficiency of HRIS is undeniable, but it’s crucial to augment these codes with clarity, especially when communicating with external entities like state unemployment agencies.

Maintaining comprehensive documentation is a step in the right direction. Performance evaluations, incident reports, and correspondence can offer a richer context to the bare-bones HRIS code. Such records not only provide clarity but also stand as evidence if disputes arise.

Training is another area of focus. HR teams should be equipped to differentiate between HRIS codes and state unemployment criteria, ensuring they relay accurate, detailed information to state agencies. Periodic workshops and legal consultations can keep them abreast of evolving laws and best practices.

Optimizing HRIS for Detailed Separation Reporting

Modern HRIS platforms are highly customizable, and employers can harness this flexibility to ensure they’re better equipped for external reporting, especially to state unemployment agencies. Instead of relying solely on broad separation codes, employers can introduce sub-codes or annotations that allow for more detailed explanations. For instance, under a primary code like “performance,” sub-categories could include “lack of training,” “external factors,” or “willful negligence.” Additionally, incorporating a notes or comments section alongside these codes can provide a space for HR managers to add context or specific incidents that led to the separation. Regularly auditing and updating these categories ensures that they remain relevant and align with both employer needs and state criteria. With these enhancements, the HRIS becomes not just an internal management tool, but a robust system that aids in transparent and comprehensive communication with external agencies.

In Conclusion

The HRIS is undeniably a powerful tool, one that has transformed HR operations worldwide. However, as with all tools, its utility is determined by its user. For employers, understanding the nuances and limitations of HRIS separation codes, especially in the context of unemployment claims, is essential. By combining the system’s capabilities with a keen eye for detail and a commitment to accuracy, organizations can ensure fairness and clarity in all their interactions, be it with former employees or state agencies.


501(c) Services has more than 40 years of experience helping nonprofits with unemployment outsourcing, reimbursing, and HR services. Two of our most popular programs are the 501(c) Agencies Trust and 501(c) HR Services. We understand the importance of compliance and accuracy, and we are committed to providing our clients with customized plans that fit their needs.

Contact us today to see if your organization could benefit from our services.

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(Photos by RDNE Stock project,

The information contained in this article is not a substitute for legal advice or counsel and has been pulled from multiple sources.

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