Unemployment fraud and advertising costs

Departments - Ask the Experts

ASK THE EXPERTS is presented in partnership with PLANET’s Trailblazers On Call program. Trailblazers are industry leaders who volunteer their time and expertise to give back to the industry. Have a question for the experts? Send it to llexperts@gie.net.

March 10, 2011

Q: One of our employees asked us to place him on a part-time schedule, saying that next spring he would go back to full-time employment. We didn’t pry into his reasons, but we approved his request. We recently received a notice from the state unemployment office indicating that he has been on partial unemployment all that time and claiming benefits for the time he is off each week. This is affecting our unemployment premium rate and will do so even more next year. What should be our next step? Should we terminate the employee or do we have to live with this?

A: This employee has created a situation in which you have a lot of risk. First, let’s deal with his primary actions. In that he asked for the shorter workweek, he is voluntarily unemployed for the balance of the week. And, when he filed his claim for partial unemployment, he likely made a few false statements. By claiming that he is unemployed through no fault of his own and that he has not refused any employment in his line of work, he has initiated a fraudulent claim for unemployment benefits.

However, your potential risks can be serious. If he is discovered and charged with this act, and he says that he thought you were aware he was going to file the claim, you may be charged with collusion or being in a conspiracy to defraud the unemployment fund. If you tell the employee he must stop claiming unemployment, and his claim is later somehow approved, you may be charged with intimidating or coercing an employee in an attempt to prevent him from filing a rightful unemployment claim. And, conversely, now that you have this knowledge of his actions, if you decide to say and do nothing, you may well, in fact, be in collusion with him by allowing him to continue.
Furthermore, if, as is normal procedure, the unemployment office sent you a form providing you with an opportunity to appeal or protest his claim, and you took no action at that time, that may be considered proof you are part of the conspiracy. 

Be aware that many states are pursuing such cases, and they have determined that the employer and the employee were guilty of fraud and have taken action against them. In some cases, this action included having to pay back the money. 

You should address this issue with the employee, and advise him that now you have been made aware of the situation, you must contact the unemployment office to correct the record. Failing to do so compromises the company’s position in this matter and may implicate you as an individual. You may wish to discuss this with a labor attorney before proceeding. 

Bill Cook, Human Resource Associates
PLANET HR Consultant

Q. I’m tired of spending money on Yellow Page online ads and getting nothing from it. What other advertising options should my company consider, and how much should I be spending on advertising? 

A. How much you spend on advertising is really a business decision that is unique to each business model. What you spend on advertising should bring in results. For advertising to be successful, it takes a variety of things all working together to create a brand image and top-of-mind awareness in your market.

If I say “iced tea” what name comes to mind? That’s right, Lipton. That is top-of-mind awareness. When someone thinks of landscaping in your market, what name comes to mind? Is it yours? Do all your vehicles, trailers and equipment have your company logo or name on it? Do you post yard signs on properties you have worked on and do you market to the neighbors of your current customers?

These are all very effective branding theories without a lot of cost involved.
One method that always works is to involve your company in community events. This will get you press, and press is priceless.

Last but not least, you should set your company apart from your competition. What is the image of your company in the community? Is your staff courteous? Is your equipment clean? When someone calls your office how are they treated? Do you return phone calls promptly? Do you provide estimates quickly? Is your company easy to work with?

Ask for referrals. If your company is delivering to customer satisfaction, then most customers will have no problem referring you to a friend, and, let’s face it, word of mouth is the best advertising any of us could ask for. 
Rich Arlington III, Arlington Lawn Care; Rich Arlington & Associates, Erie, Pa.