Chapter V
Unemployment Compensation
During the Great Depression, when as many as one-third of the nation's workers were unemployed, comprehensive social legislation reforms were enacted. This New Deal legislation also sparked sweeping changes at the state level, including the creation of a program designed to insure eligible individuals against lost wages during periods of temporary unemployment: Unemployment Insurance . The Rhode Island legislature, seeing economic insecurity resulting from unemployment as a "serious menace to the health, morale, and general welfare of the people," enacted Rhode Island's Employment Security laws.
Rhode Island's unemployment insurance program began in 1936 and is codified in the general laws (R.I.G.L. §28-42-1, et seq .). Benefits are administered through the Rhode Island Department of Labor and Training (RIDLT). Briefly, the program provides eligible individuals with up to 60% of his or her weekly wage for a specified period.
Who should a worker call to find out if he or she is eligible for benefits?
Anyone interested in learning if he or she is eligible for Unemployment Insurance benefits should call the Department of Labor and Training Call Center at (401) 243-9100.
Does the Rhode Island Employment Security Act cover all employment?
No. Not all employment is covered, but most employment is. Employers are subject to the Employment Security Act if they have employed one or more individuals during the year, but examples of excluded work are:
• domestic help in a private home for which less than $1,000 in wages were paid;
• work performed by an individual in the employ of his or her child or spouse or work performed by a minor in the employ of his or her parent;
• work for a church or a religious order;
• work performed as part of an unemployment work-relief or work-training program funded in any part by a federal, state, or local government;
• work performed in a rehabilitation program for individuals whose earning capacity is impaired by age, physical or mental handicap, or injury;
• work performed by inmates of a custodial or penal institution;
• work performed on behalf of certain tax exempt organizations;
• work which is occasional, incidental, and occurs irregularly, not in the course of the employer's trade or business;
• service as a real estate salesperson or insurance broker working on commissions alone; and
• independent contractors.
How does an unemployed worker file a claim?
Filing is an easy process. An individual filing a new or reopened claim for benefits should file by telephone within seven days of his or her last work day (in order to avoid any delay or loss in benefits) by calling the Unemployment Insurance Call Center at
(401) 243-9100. After the claim has been filed, the Department of Labor and Training will send a notice of filing to the employer requesting information about wages and the reason for termination. Once this inquiry has been completed (this may also include a follow-up interview with the employer), the RIDLT will make an initial determination on the claimant's request.
If the employer fails without good cause to return the notice to the RIDLT, the employer cannot later contest any subsequent decision by the RIDLT with respect to the claim.
How is an applicant for Unemployment Insurance benefits informed of eligibility?
The applicant should be notified in writing. The claimant must serve a waiting period of seven consecutive days for which no benefits are paid, before benefits commence. If a claimant is not eligible, applicants are to be given the reasons for disqualification and the periods of ineligibility.
After the waiting period, eligible claimants can have benefit checks mailed to them weekly by using Department of Labor and Training's Tele-Serve telephone number. By answering a series of "yes" or "no" questions, claimants can receive their benefit check usually within two days.
When is a worker eligible for benefits?
Assuming that a worker is otherwise qualified, an unemployed worker is eligible to receive benefits if that individual has:
• filed a claim,
• met the minimum earning requirements, and
• is able and available for full-time work, but unable to obtain suitable work.
Is every person who is out of work eligible for benefits?
While not every unemployed worker is eligible for benefits, the system generally favors the employee and individuals laid off from work should certainly apply. Even in questionable situations, individuals should apply for benefits. However, there are circumstances where a worker (who might otherwise be qualified) would be disqualified. A worker is disqualified from receiving benefits if that individual:
• was discharged for misconduct connected with work,
• voluntarily left work without good cause,
• refused to accept or apply for suitable work,
• is taking part in a strike, or
• is in some other way disqualified.
Are full-time students eligible for benefits?
No. Full-time students cannot collect unemployment compensation. However, if a student is laid off or fired without just cause when school is not in session, he or she may be able to collect unemployment benefits, provided he or she has earned enough money to be eligible.
Are teachers eligible for benefits?
Not if they are:
• between two successive school years or terms, having taught in the first and have a reasonable assurance of returning for the second, provided they received the assurance in writing;
• if they are full-time teachers under contract; or,
• if they worked the week prior to and have reasonable assurance of working the week after a scheduled week's vacation period.
As it relates to Unemployment Insurance , what is the difference between an independent contractor and an employee?
Just as the difference between being deemed an employee or an independent contractor is a significant one when it comes to Workers' Compensation benefits, so too it is important with respect to Unemployment Insurance .
Rhode Island law provides that the factors used to determine whether a worker is an independent contractor or an employee are those used by the Internal Revenue Service in its determination. They include:
• Who controls and directs the work?
• How is the worker paid?
• To what extent can the worker realize a profit or incur a loss?
• To what extent does the worker have unreimbursed business expenses?
• To what extent does the worker make his or her services available to the relevant market?
• Does the employer have the power to hire or fire the worker?
• Are there written contracts describing the relationship the parties intended to create?
For more information, see IRS Publication 15-A, Employer's Supplemental Tax Guide .
May a retired person ever receive Unemployment Insurance benefits?
Possibly, provided that after a voluntary retirement they have worked for the requisite eight weeks to re-establish eligibility. The Unemployment Insurance benefit amount is offset by the retirement pension. Social Security and other employee-contributed pensions would only be deducted at one-half the weekly pension amount. Non-employee contributed pensions would be deducted at the full weekly pension amount.
Are strikers eligible for Unemployment Insurance ?
Generally, strikers are not eligible for benefits. They may be eligible for benefits if the unemployment resulted from a lockout intended to gain concessions from the union or to resist collective bargaining demands. But, there is an exception to this exception. Where the employer is part of a multi-employer collective bargaining group and the lockout is in response to a strike at the facility of another member of the multi-employer group, benefits will be denied.
If a claimant is unemployed due to a strike and is not a member of the organization responsible for the dispute, nor does the individual support the strike by either participation or financial contribution, the claimant may be eligible for benefits.
What rights of appeal does an applicant have if denied benefits?
If an applicant has been denied benefits, the applicant may appeal the denial. An individual seeking a review of a denial must request a hearing within 15 calendar days. A referee, after a hearing, will make findings and conclusions and either affirm, modify, or reverse the decision of the Department of Labor and Training. That decision is final unless further review by a board of review is initiated within 15 days. The law does provide for judicial review of the board's decision.
When an employer appeals any decision, benefits will continue until a final determination of eligibility has been made. Benefits paid to the claimant during the appeal period cannot be recovered.
How is the weekly benefit amount computed?
Computation of the weekly benefit begins with a calculation of the Base Period . Typically an individual's Base Period consists of the first four of the last five completed calendar quarters before the starting date of the claim. The starting date of an individual's claim is the Sunday of the week in which the individual first files.
To be eligible for Unemployment Insurance benefits an individual must have been paid at least $8,100 in the Base Period or Alternate Base Period. If the individual doesn't meet this minimum-earning requirement, the Department of Labor and Training will use an Alternate Base Period , which consists of the last four completed calendar quarters before the starting date of the claim.
If an individual does not meet the earning requirements, the individual may still be eligible if that individual:
• was paid at least $1,350 in one of the Base Period Quarters ,
• was paid total Base Period wages of at least one and one-half times the highest single quarter earning, and
• was paid total Base Period wages of at least $2,700.
The weekly benefit is computed by multiplying an individual's highest quarter's wages in the Base Period by 4.62%. The maximum Rhode Island weekly benefit rate is capped at 67% of all Rhode Island workers' average weekly wage. Benefits remain unchanged throughout the benefit year.
Eligible individuals may also be entitled to a Dependency Allowance for up to five children. The rate is computed at 5% of the individual's Weekly Benefit Amount for each child with a minimum allowance of $10 for each dependent.
When do benefits commence and for how long will they continue?
Eligible individuals should get their first benefit check during their third week of unemployment.
Following a seven day (Sunday through Saturday) waiting period, benefits run for a maximum of 26 weeks or until an individual has exhausted his or her benefits, whichever comes first. The total amount of benefits available to an individual is equal to 36% of the individual's Base Period wages divided by the Weekly Benefit Amount (excluding the dependent's allowance) to arrive at the number of weeks (again, up to 26 weeks) for which benefits will be provided.
How does the law define total and partial unemployment ?
An individual is deemed totally unemployed in any week in which he or she performs no work and receives no wages. Furthermore, the individual cannot reasonably return to any self-employment in which the individual has customarily been engaged.
An individual is deemed partially unemployed in any week of less than full-time work if he or she fails to earn in wages for that week an amount equal to the weekly benefit rate for total unemployment to which the individual would be entitled if totally unemployed and eligible.
Are benefits available for partial unemployment ?
Yes. An eligible individual would be entitled to benefits for any week in which he or she earned less than his or her benefit rate and worked less than full-time hours. Claimants must report all wages received during any week he or she is claiming benefits.
What does it mean to be able to work?
An applicant is able to work when the individual is physically or mentally capable of performing his or her usual occupation or other suitable work. This means an individual will not be considered able if he or she is sick or injured off the job and cannot work. Such an individual may be eligible for Temporary Disability Insurance ( TDI ) benefits (provided he or she has earned enough money to qualify for benefits).
If an individual was injured at work and for that reason is not able , that individual is similarly ineligible for Unemployment Insurance , but may qualify for Workers' Compensation benefits.
When is an applicant available to work?
In order to collect benefits an individual must make an "active, independent search for suitable work" and register for work with the Job Service. Restrictions placed on availability, even with good cause , which substantially impair a claimant's availability, may render the individual ineligible for benefits. The Department of Labor and Training recommends claimants maintain a written record of weekly search efforts.
An exception to this requirement is provided for those individuals on a temporary lay-off with a definite date of return within 12 weeks from the last day of work. Such individuals will not be required to look for work. The exception also applies to those persons on a staggered (week on/week off) schedule.
Lastly, members in good standing of unions that normally hire through a hiring hall or which make use of a business agent are not required to look for work.
What is meant by suitable work?
Suitable work refers to the sort of work for which the claimant is reasonably fitted and which is located within a reasonable distance from the claimant's home or last place of work.
Work is not suitable if:
• it is detrimental to the claimant's health, safety or morals;
• it results from a strike, lockout or other labor dispute;
• the wages, hours, and other employment conditions are substantially less favorable to the employee than those prevailing for similar work in the locality; or,
• as a condition of work, the individual would be required to join a company union or to resign from or refrain from joining any bona fide labor organization.
What does it mean to be discharged for misconduct ?
Assuming that a claimant is in all other respects qualified to receive benefits, he or she will be disqualified if the discharge resulted from misconduct. Misconduct usually involves:
• deliberate actions detrimental to the employer;
• gross negligence;
• disregard of standards of behavior, which the employer has the right to expect of his employee; or
• knowing violation of a reasonable and uniformly enforced rule or policy of the employer.
Since a discharge for misconduct disqualifies an individual from receiving benefits, it is important to note what is not misconduct . A discharge because of:
• mere inefficiency,
• failure in good performance as the result of inability or incapacity, or,
• good faith errors in judgment
will not constitute misconduct and, therefore, would not disqualify an individual from receiving benefits.
Misconduct is not necessarily limited to on-the-job conduct and the RIDLT denied benefits to an employee whose misconduct took place after work hours and off the work site. That denial was upheld by the Rhode Island Supreme Court which found that the off-duty, off-site misconduct was job-related, given the defendant's position of "high visibility and great responsibility" as the Superintendent of the Rhode Island Training School. The Court defined misconduct as:
[C]onduct evincing such willful or wanton disregard of an employer's interest as is found in deliberate violations or disregard of standards of behavior which the employer has the right to expect of his [or her] employee, or in carelessness or negligence of such degree or recurrence as to manifest equal culpability, wrongful intent or evil design, or to show an intentional and substantial disregard of the employer's interests or of the employee's duties and obligations to his employer. (italics in original)
In this instance, according to the Court, the misconduct "extinguished" the employee's abilities to carry out the employer's work and that the employer "had the right to expect from the claimant a reasonable standard of obedience to the criminal law both on and off the premises of [the employee's] employment." C. Mae Bunch v. Board of Review, Rhode Island Department of Employment and Training , 690 A.2d 335, 338 (R.I. 1997)
Following a discharge for misconduct , a worker will have to reestablish eligibility by working for no less than eight weeks during which time he or she will have to meet certain earning thresholds.
Under what circumstances can an employee who voluntarily leaves a job receive Unemployment Insurance benefits?
If an individual voluntarily left employment with good cause , eligibility for benefit payments is not forfeited. It is important, however, to note that the departure from employment must be voluntary and with good cause . Voluntariness was not found when an employee retired after being told to take an early retirement or she would be fired.
What is meant by good cause ?
Good cause generally results from adverse circumstances beyond the employee's control. Rhode Island courts, which take a liberal reading of the law, have stated that good cause is a "mixed question of law and fact." The most important thing to recall is that it is the employee who quits voluntarily who bears the burden of demonstrating that the separation occurred for good cause .
Good cause has been found where:
• an employee left employment because he had a particular sensitivity to chemicals used by his employer
• a public relations person voluntarily left employment when he refused to publish a misleading news release, and,
• a teacher voluntarily terminated his employment in order to accompany his working wife (the wife had not retired) to another state,
but not where:
• an employee quit merely because of personal dissatisfaction with the nature of the employment
• an employee left a job to marry and move to another state, or
• an employee failed to contact the temporary agency upon completion of an assignment.
Rhode Island law also recognizes good cause where an employee voluntarily leaves work to protect herself, himself, or family from domestic abuse.
Can an individual receive benefits in Rhode Island for work performed out of state?
While the benefits are actually benefits from the state in which the work was performed, the Department of Labor and Training can provide information about another state's requirements and assist in filing the claim. Also, if an individual worked in more than one state he or she may be eligible to file a Combined Wage Claim. The RIDLT will request that out-of-state wage credits be transferred in order to be applied toward benefits in Rhode Island.
Can an individual receive Unemployment Insurance benefits while receiving Temporary Disability Insurance ( TDI ) or Workers' Compensation ?
An individual cannot receive Temporary Disability Insurance and Unemployment Insurance benefits because the criteria for Unemployment Insurance benefits include being able and available for full-time work; whereas, the criteria for TDI benefits are that the individual is unemployed due to illness and under a doctor's care and cannot work.
If an individual is partially disabled and receiving partial Workers' Compensation benefits, and he or she is able and available for full-time work, that individual might be eligible for partial Unemployment Insurance benefits. A decision will be made as to eligibility. The Workers' Compensation benefits must then be less than the Unemployment Insurance benefit rate and would be deducted from the Unemployment Insurance benefit rate.
Are benefits taxable?
Yes. Benefits are subject to federal and state income tax. Claimants may elect to have the Department of Labor and Training withhold taxes from the benefit check.
Are Unemployment Insurance benefits protected from creditors?
Yes. So long as benefits are not mingled with other funds they are exempt from the claims of creditors or attachment. However, the law does provide for deductions and withholding of child support payments.
How are non-fraudulently obtained unemployment insurance overpayments treated?
If a claimant receives benefits he or she is not entitled to, the claimant will be required to repay the amount overpaid. Repayment is usually made in a one-time, lump sum payment; however, it may be possible to make installment payments.
Are other benefits available from the Department of Labor and Training?
Yes. In some cases, tuition waivers are available for Rhode Island state operated colleges or at the University of Rhode Island. Under certain circumstances - such as job loss because of imports - an individual may be eligible for job training, job search allowance, relocation allowance, and extended benefits.
Can a worker receive benefits while enrolled in a training program?
Individuals should notify the Department of Labor and Training if they are enrolled in any school or training program. The law provides for an individual to continue to receive benefits while enrolled in approved adult basic education or vocational training programs. The Department of Labor and Training makes the decision on whether the program is approved.
