Unemployment insurance is intended to provide a defined period of monetary benefits to workers who have lost their job through no fault of their own. The funds to pay workers come from a collected state tax. This tax is a combination of a fixed tax (applied to all employers in the state) and a variable tax (based on the number of unemployment claims the state pays for former NPC employees). State unemployment regulation and processes vary. Therefore, NPCs should become familiar with their state’s unemployment regulations and process to help reduce future liability.

An employee who loses a job through no fault of his/her own will be entitled to unemployment benefits. However, there is a good chance that a former employee would be disqualified from unemployment benefits if the NPC has documentation that 1) supports the dismissal of a former employee for willful misconduct, or 2) the employee voluntarily left employment to take a job with another company; and the NPC has responded in a timely manner to the state's notice of an unemployment claim. Some states are employee friendly and even with a resignation letter may deny the employers appeal to the claim.

Once the NPC has received notice of the unemployment claim filing, respond immediately if you believe the claim is not valid. If response to the claim notice is delayed, the employer may lose the opportunity to contest and appeal the claim. It is also important to respond to unemployment claims that are not valid to limit future liability. A successful unemployment claim by the employee may set precedence for future litigation.