Employers may contest unemployment claims for various reasons, primarily rooted in the desire to mitigate costs and protect the organization’s interests. These claims, if approved, can increase an employer’s unemployment insurance tax rate, impacting the financial bottom line. For example, a company with a high number of former employees receiving unemployment benefits will likely face higher contributions to the state’s unemployment insurance fund.
Fighting an unemployment claim can be strategically important for businesses. Lowering the unemployment insurance rate can lead to significant cost savings over time. Furthermore, a successful challenge can prevent potential reputational damage or legal precedents that could negatively influence future employment-related decisions. Historically, employers have viewed contesting claims as a necessary component of responsible financial management and risk mitigation.
