When we consider the cost of an unemployment claim, the first thing that likely comes to mind is the monetary payout in the form of benefits and taxes. However, this is just the tip of the iceberg. The real cost also encapsulates the significant investment of staff time dedicated to managing these claims, a hidden expense often overlooked.
It’s easy to undervalue the hours spent by your HR team or managers handling unemployment claims, but when you start adding them up, you soon realize that this can equate to a considerable drain on resources. This time could be better spent on growth-driven activities, improving your operations, or enhancing employee engagement and productivity.
The precise amount of time required to handle an unemployment claim is far from standardized. It can vary significantly based on the complexity of the claim, the organization’s size, the internal processes, and the efficiency of the HR department.
Receiving the Claim
The process kicks off with receiving the claim. Employers must review the notice of unemployment claims, a step that usually takes a few minutes to half an hour. However, this time estimate assumes that the claim is straightforward and does not have any inconsistencies or areas of contention that require further investigation.
The most time-consuming part of the process typically involves pulling together relevant information. This stage might include accessing employment records, verifying the reasons for termination, and gathering any supporting documentation. Depending on the organization’s record-keeping efficiency, this step might take anything from a couple of hours to an entire workday.
Formulating a Response
Once all the necessary information is compiled, it’s time to draft a response, either confirming the claim’s legitimacy or contesting it. Remember, this isn’t optional—it’s a state-mandated process that must be executed promptly to avoid penalties. Depending on the claim’s specifics, this might take between 30 minutes to an hour. However, in more complex situations, it may require considerably more time.
If the claim is contested, expect to invest even more time in follow-ups, which will likely involve a hearing process. This process requires preparation, potentially obtaining legal advice, and attending the hearing itself. Depending on the case’s complexity, this can take from several hours to multiple days, even weeks, especially when considering time spent waiting for scheduled hearings and decisions.
And the process doesn’t end once the claim is resolved. Employers also need to manage ongoing claim costs, verify charges for accuracy, and maintain compliance with labor laws. The time commitment for these activities will vary widely, depending on the number of claims, the organization’s management system, and any changes in regulatory requirements.
As a rough estimate, a straightforward claim could take a few hours in total, while a more complex claim could consume several days or even weeks of employee time. Moreover, the time could be even higher if the employer lacks an organized system for managing unemployment claims or if multiple claims need to be handled concurrently.
Third Party Unemployment Claims Management
Engaging an outside unemployment claims manager can help organizations save a significant amount of time, allowing them to focus more on their core mission. However, the actual time savings would depend on various factors, including the number and complexity of claims and the efficiency of the unemployment managing partner.
Third Party unemployment assistance not only alleviates the time burden but also offers expert guidance, potentially leading to cost savings and minimizing the risk of penalties for non-compliance. The choice to engage a manager could result in more accurate, efficient, and timely management of unemployment claims.
If you’re considering leveraging an unemployment partner in your unemployment claims process, we’d love to help. Contact us today, and we’ll gladly walk you through our programs and processes. It’s time to shine a light on those unseen costs and make a change that benefits your organization’s bottom line and operational efficiency.
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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The information contained in this article is not a substitute for legal advice or counsel and has been pulled from multiple sources.