With all the fussing and fighting about extending unemployment benefits, you’d think everyone gets them. Not so:
The fraction of people who are eligible for unemployment benefits and actually receive them varies significantly across states, and is only about 65 percent or 60 percent, on average, in the U.S. Now, that’s particularly striking when you compare it to the numbers in Europe, where that number is more like 95 percent or 97 percent.
Part of the reason is that companies have an incentive to challenge claims:
When you lay off lots of workers, as a company, you have to pay higher unemployment taxes. Employers have an incentive to try to contest individuals’ unemployment benefit claims, because they are paying part of the cost of — of those unemployment benefit claims.
So, of course, companies like Talx have sprung up to address the market demand for throwing sand in the gears of the unemployment system:
Indeed, years of e-mail messages, obtained through an open records law, show a continually exasperated Wisconsin staff. While a few cited improved performance, others complained that Talx “returned half-empty questionnaires,” sent back “minimal or ‘junk’ info,” reported in error that applicants were dead, filed “frivolous protests” and caused “the holdup of many claims.”
Where the less enlightened among you might see obstruction, I see entrepreneurs addressing a clear market need.
me
The invisible hand doesn’t even have the goddamn common courtesy to give a reach around.
demkat620
Kinda says it all.
kansi
The nation seems filled with folks who should have trouble falling asleep at night. Maybe another booming industry?
Derelict
What? This is exactly what Jesus and the Bible enjoins all good businesses to do: Oppress the widows and orphans, and throw stumbling blocks before the blind.
If your Bible says DON’T do those things, well, it’s because your’s is one of those liberal Bibles.
fucen tarmal
you have to wonder the b.s and lies they fill their employees full of, until even the dumbest among them realize what the gig is really about.
its like a Milgram lab. i would love someone to research the people who work for companies like this…or, last time i changed jobs, the companies who sent me daily ads, then invoices, then delinquincy notices for cobra coverage i didn’t want, need or never ordered.
i have to tell you i was going through enough stress, and being pulled in enough directions, that i began to question whether i had, HAD, cobra coverage, needed it, or ordered it….
Linda Featheringill
Exactly.
I get so tired of people like this – and they are legion.
geg6
You know, if these people and those on Wall Street would put half the energy and innovation they put into fucking people over instead into actually producing something useful, they wouldn’t need to worry about high unemployment insurance costs. Just sayin’.
The Grand Panjandrum
Give a dog a bone you, feed it for a day. Throw the bone high enough into the air, ask it to do a trick for said bone, and you might not have to feed the lazy bastard ever again, and you get to keep the bone.
Shorter: The dog gets boned one way or another.
Jude
Dude, I work for Wisconsin Unemployment.
Talx is pretty shitty, but, in a way, they just represent the shittiness of their client company. They can’t do shit without those clients’ permission. So Talx, as (for example) Target’s agent, does Target’s bidding.
Another way the company fucks up the process is that they, like health insurers, are superfluous middlemen.
Say someone gets fired from Wal-Mart and files an unemployment claim. Instead of calling the store or their HR people directly, I call Talx. They call the store and request all the information I need. The store gets back to them, and they return it to me. Of course there will be more errors–you’re adding an unnecessary step. I mean, it is a literal game of telephone, where information gets lost at extra stops.
That said, it does seem to be their practice to delay, obfuscate, and raise non-existent issues (e.g., a quit vis-a-vis a layoff) in many instances.
Seriously, when I see a Talx-represented employer, it pisses me off, because I know the whole process will be unnecessarily lengthened and possibly compromised. At worst, they’re actively working to fuck things up.
HRA
The high insurance costs are due to companies just like the one cited and they are not alone. It does not stop there. It branches out into the state governments having to hire people to address these situations, the adjudications caused by them and in the end making us all pay for it. IOW our taxes go up. Criminal is what it really is called
JenJen
Very interesting. This is exactly what happened to me in October 2008 when my position with Hilton was eliminated. When I filed my unemployment claim, I received a notice that it was being appealed. I couldn’t believe it, but did the necessary legwork, had to write a very long letter explaining why I had become unemployed, had to send it registered, etc. etc. A few days later, I won the appeal and that was that.
Now, several months later, I received another notice of appeal. By now I was pretty pissed off, and couldn’t for the life of me understand why Hilton was putting me through this. I mean, I was personally laid off by the Director of HR. I was a F&B executive. Why were they doing this to me? This time, I decided to hire a lawyer. We pulled all the information together, he called the State of Ohio and demanded an in-person hearing with Hilton, and sent letters to Hilton explaining that I was being legally represented in this matter.
A few days later, my attorney calls to tell me Hilton has withdrawn the appeal to my claim. He’d been called personally by the Director of HR, who told him “the firm we use to handle our workers’ compensation and unemployment claims automatically appeals every claim. We don’t even have a choice in the matter, they just appeal, no matter the circumstance.”
It cost me $1200 in legal fees to learn that Hilton wasn’t actually appealing my unemployment after all. In fact, my attorney told me that the firm probably wouldn’t have even shown up at the hearing. Firms like that just throw every claim against the wall in hopes they’ll intimidate a few people into not appealing the appeal.
It’s sickening to me, and really, the states need to go after these kinds of firms for filing fraudulent appeals. I feel just horrible knowing there were other people laid off by Hilton that probably didn’t have the tenacity I did in fighting the bastards. It just shouldn’t be legal.
Brian J
I’ve struggled to find a link that talked more about this, so maybe I am hallucinating, but I seem to remember reading something about a push to turn unemployment insurance in a series of private accounts a couple of years back. Whatever would be paid towards this insurance now would be deposited into an account which could be drawn upon if the person is ever unemployed, based on how much each individual worker chooses to contribute. If there’s money left over when he is retired, it could be handled like an IRA is now.
I don’t know the ins and outs of this, but unlike the push to privatize Social Security, this one doesn’t make me object from the start. After all, most people will never be unemployed, so there’s probably not a need for a large account for each individual. And while there’s a pretty good chance it could run out quickly for certain people, I don’t see why it couldn’t be supported by a backstop government fund, especially for times like these. The biggest benefit, though, would appear to be that nonsense like this, where firms are fighting people, would end, because the firm would be taken out of the equation.
JenJen
Edit isn’t working for me, so just to add on to my post #11 above… I don’t believe for one moment that Hilton “has no choice” whether the firm they use files an appeal to every unemployment claim. As Jude wrote above, the firm is only as shitty as the company that hires it.
kansi
JenJen:
This x1000.
mistermix
@BrianJ: One issue is the huge variance between states – my unemployment fund from New York is going to be much higher than, say, one from Florida.
Brian J
@mistermix:
What exactly do you mean?
Violet
@JenJen
This is exactly how health insurance companies work too. They deny claims for no reason because a certain percentage of claimants won’t bother to appeal. Easy money for them. I think it was Michael Moore’s film “Sicko” in which a former health insurance employee said they were told to set aside a certain percentage of claims and essentially “lose” them.
Absolutely. This kind of treatment of people who have just lost their job is appalling. Where does the average person get the money to hire a lawyer when they don’t have a job? The companies know that and it saves them money if they don’t have to pay out.
I get that in a company like Talx is providing a service – they handle unemployment stuff because the company that fires people doesn’t have the staff or expertise to do it. It makes sense, so long as everyone is doing the right thing. Problem is, there’s far too much room for corruption and mistreatment of laid off employees and no way to police it.
HRA
Brian@12
A variation on that theme is being used by my husband’s employer. They call it profit sharing. When you leave, are laid off or terminated, you are to receive your payment. OTOH your account is based on the market. My husband lost 4k during the downslide. Some employees have to wait or take them to court for their payment. Some never see it. As in the case of one man who died and had no descendants or will. IOW employers will never be on the side of the employee.
Bondo
One problem is that if you are an at will employee, they can come up with any excuse to say that you were fired for cause rather than laid off and thus don’t qualify for unemployment insurance. That is what happened with me…rejected for unemployment because I was “fired.” Apparently if you are fired you don’t need to eat or pay rent.
I understand that we want to avoid abuse from people quitting their jobs to live on unemployment checks or something, but I’d like to see unemployment be much more automatic.
Brian J
HRA @ 19:
Isn’t it possible to simply remove the employer from the equation?
Suzan
I work with Talx daily. My favorite Talx abuse story is on late appeals. We use the post mark on the letter of appeal as the “date of filing”. If the appeal is not filed on time, the appeal is dismissed. Talx has their own franking machine and hence put their own “post mark” on the letter of appeal. There was no doubt they were messing with the date to make a late appeal look timely. We passed a rule that we won’t accept the post mark unless the post office puts it on the letter of appeal.
slightly_peeved
I believe that’s what a lot of those European countries with 97% collection rates do; it’s also done in Australia. Unemployment benefits are paid out of federal income tax, and there’s no linkage between an unemployed person’s benefit and their former company. It’s just another line item in the budget.
It isn’t much to live on; the number of people who do so in Australia is pretty low. And I’ll happily pay it to keep them from begging on the street.
henqiguai
slightly_peeved @22
Soc’alist ;-)
JenJen
@Violet: That’s precisely the way I see it. It would seem to me that the states have a case against these unemployment claim outsourcing firms, if they’re filing fraudulent appeal after fraudulent appeal, wasting the time and effort of an already overworked state staff. And that’s not even taking the employee into account. I worried needlessly and spent money on an attorney, when if I’d had just understood the game being played against me, I could’ve beaten them myself.
Thanks to everyone in the thread who works with firms like this for providing their unique insight. This story needs more attention, especially in light of 9.7% unemployment. Depending on the way these firms bill the companies that hire them, there’s a pretty good chance they are just raking it in these days.
Cerberus
Slightly-peeved @22
Exactly. Most of the other countries trust in their citizens and assume like bored housewives, most people would rather be working doing something or building their education towards a job than just sitting down and trying to live “large” on survival wages.
And in most countries it works. Are there some small percentage of people who are “taking advantage of the system”? Probably, but they drain a hell of a lot less out of the system than shit like this or even the more social ills that lacking a social net causes like runaway homelessness, the attraction of organized crime in poor districts, having poor districts become catastrophically run-down in a financial downturn, etc…
The problem with America is that we’ve become trained to view everything in very narrow terms. If it isn’t a direct one-to-one link, if the effects don’t arise in a single financial quarter, then it might as well not exist. And we are trained only to think about waste and fraud in terms of those being paid taking advantage of the system rather than noticing how those doing the paying have far more incentive to lie.
HRA
Brian@20
“Isn’t it possible to simply remove the employer from the equation?”
Then we would see a great swelling in our state and federal taxes. As it is the state and the federal government do participate in the cost of unemployment insurance. As you may have noticed the state cannot extend benefits for an added number of weeks. It takes an act of Congress. The states does the computing and distribution of the benefit.
Jen@24 You were wise in having an attorney. People who represent themselves are taking a risk considering the employer more often than not has an attorney on their payroll.
Ruckus
Cerberus@25
Exactly. Short term and single focus thinking never works on complex problems. But it seems to be the american way of attacking problems.
Wile E. Quixote
I think that it’s time that we started throwing sand in the gears at companies like Talx. Figure out how we can fuck up their processes and procedures, damage their bottom line and drive them out of business. For starters someone could find out where the employees of Talx work and publicize that information to people who are having their unemployment claims denied. Go after the entire company, not just the CEO, but everyone who works there and say “Look, we think you’re shit, and as long as you keep doing this shit we’re going to make your lives miserable.” It would be sort of like unmasking members of the KKK.
TenguPhule
Sort of like how the Right published information about Congress critter relatives when pissed off about HCR?
I agree with the sentiment behind it but not the method.
Better to get a list of their clients and PR their revenue to death, or pull a *non* edited ACORN tape on them and ruin the company.
Original Lee
A friend was recently laid off from his job. It’s his 4th job in 2 years, but because he’s always the newbie, he’s also always first on the chopping block. The company appealed 3 times. The first time, they claimed he was fired, not laid off. A copy of his termination letter solved that. The second time, they claimed he hadn’t been working there long enough. A copy of his start work letter and another copy of his termination letter solved that. Then they claimed again that he had been fired. I believe they are allowed 3 appeals. My friend got his first unemployment check on Thursday, and it included 6 weeks compensation for the time it took to process the 3 appeals. He is happy about winning but bitter about having to take everything on his credit card while he was waiting for the unemployment pay to start. His next step is to tackle his severance pay, since his company stopped paying him the day he was laid off and he never got his final paycheck or the $500 kiss-off money.