Senators Tallian and Lanane have introduced SB 111 which would protect former employees from having to repay unemployment benefits received even if their termination was determined to have been for just cause.
In Indiana, generally speaking, someone involuntarily separated from employment through no fault of their own is entitled to unemployment benefits. Someone fired for just cause (or who quits voluntarily) is not. Sometimes “just cause” can take awhile for the courts to figure out. During a period where one level of the judicial process has determined the termination was not for just cause, an employer can be required to pay unemployment benefits. If a higher body reverses and determines that the termination was for just cause, than the former employee can find themselves liable for the “overpayment” — for the amount paid to them that they shouldn’t have received. The review process goes: claims deputy -> administrative law judge -> review board -> court of appeals -> Indiana Supreme Court. (Ask me how I know.)
This bill would provide that the former employee’s liability to an employer – including an employer who “makes payments in lieu of contributions” – for those benefits would be waived if they were received during the pendency of an appeal before the ALJ or the Review Board. There are basically two ways an employer pays into the unemployment insurance system – by making “contributions” which functions sort of like paying an insurance premium or by “making payments in lieu of contributions” which functions sort of like being self-insured, only with an account maintained by the Department of Workforce Development. The employer pays into the account dollar-for-dollar the benefits received by the former employee(s). So, in that case, this bill is telling employers, “even though you were correct and had just cause to discharge the employee, we’re letting the employee keep your money.”
I understand the sentiment. If it was a close call on whether the termination was “just cause,” it will work a hardship on the former employee to have to pay back unemployment money he or she shouldn’t have received. (I guess it will also work a hardship where it wasn’t a close call and the ALJ was just incompetent and the former employee delusional about being entitled to benefits.) But the “fair” solution doesn’t seem to be to take money out of the pocket of the employer in such cases. I guess you could reason that the problem was caused by some level of government (e.g. ALJ) making the wrong decision and, therefore, make the government (e.g. taxpayers generally) pay for the mistake.