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# 3402 - OHIO: UNEMPLOYMENT INSURANCE BASICS

Section 4141.01(B)(1) and (2) An employer is liable under the Ohio unemployment compensation law if the required remuneration is paid to Persons in covered employments.

The Ohio law defines employment as "service performed for wages under any contract of hire, written or oral, express or implied." The law further provides that covered employment shall include an individual's entire service performed for a subject employer within the State of Ohio unless that type of employment is excluded from coverage (see following list of excluded employment).

Under certain circumstances, coverage under Ohio law may be extended to include the services performed by an individual both inside and outside Ohio. The bureau must decide in each case whether all such services can be covered under Ohio law. If an employer has this type of employment, the bureau should be contacted for a ruling.

Excluded Employment

Section 4141.01(B)(3) Certain types of employment are specifically excluded from coverage. An employer is not liable under the law when all individuals performing service are in excluded or non-covered employment, nor can such employees be considered in determining liability.

Wages paid to non-covered employees are not subject to the payment of contributions, nor can they be used in establishing a claimant's eligibility or in the computation of benefit amounts.

The following is a partial list of excluded employment. Some are only applicable to nonprofit organizations and these are indicated in the text.

• Students enrolled and regularly attending classes at a school, college or university where the service is being performed for such school, college or university;
• Students in a full-time program taken for credit, who are engaged in a work-study program when the working portion is a recognized part of the student's required course of study at a public or parochial high school, college or university (the exclusion pertains to the work being performed for the outside employer);
• Family employment, such as an individual working for his or her spouse, parents working for a son or daughter, or children under age 18 working for a parent;
• Individuals compensated solely by way of commissions and whose services have been held to be not subject to the Federal Unemployment Tax Act (FUTA) (the employer should have a letter of exemption from the Internal Revenue Service);
• Individuals employed by a church or convention of churches, or an organization that is operated primarily for religious purposes (church-related activities such as school or hospital are not included in this exclusion);
• Duly ordained ministers in the exercise of their ministry or by a member of a religious order in the exercise of duties required by such order;
• Individuals receiving rehabilitative services in a facility (sheltered workshop) conducted for such purposes (the exclusion applies only to those beneficiaries of the rehabilitative program who cannot be readily absorbed in the competitive labor market);
• Employees of nonprofit organizations other than those described in Section 501(c)(3) of the Internal Revenue Code, whose earnings do not exceed $50 in any calendar quarter;
• Casual labor not in the usual course of an employer's trade or business;
• Student nurses in the employ of a hospital or nurses' training school, or by an intern (who has completed four years in an approved medical school) in the employ of a hospital;
• Persons engaged in work relief or work training for nonprofit organizations, hospitals, colleges or universities, the state or a political subdivision, where such work is financed in whole or in part by the government, state or federal; and
• Patients in a hospital and inmates performing services in a prison or custodial institution.

More detailed information on these exclusions may be obtained by contacting the Bureau's Contribution Department at 145 South Front Street, P.O. Box 923, Columbus, Ohio 43216, or the compliance representative in any of the bureau's compliance offices listed in your phone book.

Independent Contractors

Section 4141.01(B)(1) The services of an individual determined to be an independent contractor (under contract to perform a special service for an employer) are also excluded from covered employment. To be excluded, it must be established by the employer that the:

1. Contractor is free from direction and control over the service being Performed;

2. Service is not in the usual course of the business for which it is being performed; and

3. Contractor is customarily engaged in an independently established trade, occupation

    profession or business.

Both Covered and Non-covered

Section 4141.01.(B)(4) With respect to individuals performing both covered and non-covered employment for the same employer, if one-half or more of the services performed by an employee in a pay period (not more than 31 days) is in covered employment, all the service performed by the employee in the pay period shall be deemed in covered employment. If more than one-half of the employee's services in a pay period is non-covered employment, then all the services in the pay period shall be considered as being in non-covered employment.

-- 1993, Ohio Bureau of Employment Services

Ohio's unemployment compensation law, set forth tn Chapter 4141 of the Ohio Revised Code, is designed to provide unemployment insurance benefits as a temporary wage replacement to workers who have become unemployed through no fault of their own.

Section 4141.29 of the Revised Code, titled Eligibility and Qualification for Benefits, sets forth the eligibility requirements claimants must meet before they are entitled to benefits payments.

Section 4141.29(D) reads "notwithstanding division (A) of this section, no individual may serve a waiting period or be paid benefits under the following conditions: (2) For the duration of his employment of his unemployment if the administrator finds that: (a) He quit his work without just cause or has been discharged for just cause in connection with his work."

The basis tenet of unemployment. insurance eligibility holds true: no claimant is entitled to unemployment benefits unless his loss of unemployment is beyond his control. Voluntary quits do not fall into this category and therefore preclude those persons from benefits in this system.

Whenever a former employee files for unemployment benefits, the employer will receive notice of such filing and will be provided an opportunity to appear at a hearing and object to the allowance of benefits. In any event, former employees who voluntarily quit should not be entitled to benefits charged against the employer or the fund unless the circumstances described below exist.

Charging of Unemployment Benefits to Employers after Voluntary Quits

In instances in which an unemployed claimant seeking benefits has been employed by more than one employer during the "base period," employers are charged proportionally for benefits based on the portion of the claimant's ant's aggregate compensation provided by each employer during the base period.

For example, if during the previous twenty weeks (the minimum necessary to qualify for benefits) a claimant had worked for Employer 1 in fifteen weeks, then quit Employer 1 and worked for Employer 2 in five weeks and then been laid off, both Employer l and Employer 2 would be charged for benefits, However, Employer 1, having provided three-fourths of the claimant's compensation (assuming identical wages at both 1 and 2) would be charged 3/4 of the benefits charges as well. Employer 2 would be charged only 1/4 of the charges.

-- February 1990, Ohio Council of Retail Merchants

-OHIO-  WILLFUL DISREGARD NOT THE ONLY BASIS FOR DENYING UNEMPLOYMENT

The Supreme Court of Ohio has thrown the Ohio Bureau of Employment Services a curve ball. In a radical departure from OBES' commonly held position, the Court unanimously decided that a person fired for poor performance was not eligible for unemployment compensation benefits. Before Tzangas, Plakas & Mannos v. Ohio Bur. of Emp. Serv., only a willful disregard of duty or a violation of the employer's instructions was considered a sufficient basis for denying benefits.

For about nine months, the claimant in the case worked as a word processor at the Tzangas law firm, where she produced consistently poor work. She made serious typing errors and didn't proofread her work product. Simple documents went through three or four drafts to correct mistakes which could have been caught at the outset by a competent word processor. The firm reprimanded her on two different occasions, telling her that her job was in jeopardy and that the situation needed to change. She was terminated when her performance did not improve enough to meet the firm's expectations.

After she was let go, the claimant applied for and was granted unemployment compensation benefits. The Unemployment Compensation Board of Review found that there was no evidence of "willful or wanton" misconduct on the part of the employee, so the firm had not fired her for "just cause." The Court of Common Pleas for Stark County agreed with the Board of Review but the Stark County Court of Appeals reversed the trial court. According to the appellate court, the claimant's inability to perform her job, "while not her or anyone else's fault, served as a sufficient justification for her dismissal." The Supreme Court of Ohio upheld the reversal.

What it all comes down to is the Court's definition of "fault". The employee didn't do the required work, the firm told her what its expectations were when it hired her, the firm's expectations were reasonable and the job hadn't changed since she'd been hired. The Court said that there isn't much difference between an employee who will not perform her job correctly and one who cannot perform her job correctly. Either way, the employee's performance is deficient, and while inability to perform a job isn't "fault" in a moral sense, it is in a legal sense and the claimant was fired for just cause.

In light of the Tzangas decision, employers who are willing to be persistent can now successfully challenge eligibility for unemployment compensation benefits without having to prove that the claimant willfully disregarded assigned duties or violated instructions.

This information is provided by the Association's employment counsel, Millisor & Nobil. The information is for general knowledge. You should contact Millisor & Nobil or other professional counsel for specific application advice. Millisor & Nobil provides Association members a hotline legal service to answer specific questions. Contact the Association office in Dublin, 614-889-1309, should you have any questions or desire additional information.

-- April 1996

Probably more unemployment compensation cases are lost than are won. "In most cases, you will not win unless the facts and the law are in your favor. It is possible, however, to bungle a potential winner." (William DeMartini, Chief Administrative Law Judge 1979-82, California UI Appeals Board)

The following list covers the most common mistakes parties make in appeal cases.

1. File your appeal on time. An appeal to the Board must be filed (in person at the Job Center or postmarked) within 15 calendar days of the mailing date of the decision. There are no provisions for extension of time and if you file late, you face a heavy burden in proving you were prevented from filing on time Also, it is strongly recommended that you state clearly the reasons for the appeal.

2. Prepare your case early and on the proper issues(s)You should identify the issue involved in the appeal and begin preparing for the hearing as soon as you learn of the appeal -either when you decide to appeal or when you receive a copy of another party's appeal.

Be careful not to overlook multiple issues in a decision. The claimant's benefit entitlement may be combined with an overpayment, or combine voluntary leaving and availability. Also check the hearing notice, as the referee may signal a need to consider a different section of law at the hearing than the one used by the Job Center, such as voluntary leaving instead of discharge, or Section 3 instead of 402 (e).

Time is very important. Secure your documents and witnesses immediately. If you wait until you receive notice of the hearing to seek counsel, your advocate will have far less time to prepare.

3. Plan to get right to the point at the hearing. As you prepare your case, remember that a clear and concise presentation is generally better. Avoid drowning your main point in a cascade of background material. Concentrate on the legal issues which control eligibility. Be sure you know who has the burden of proof; it governs how much you need to present.

4. If you have a problem with the hearing date, request a new hearing date promptly. Unless you face a dire unanticipated emergency, you will not be granted a last-minute change in hearing date.

5. Make early requests to subpoena witnesses whose attendance you cannot control. Subpoenas are up to you to serve. A subpoena served on a witness the day, or even the day before the hearing may be unenforceable.

6. Don't subpoena witness(s) against you. This happens more than you might think. Be sure you know each witness's testimony before bringing them to the hearing. Do not count on an adverse witness turning friendly because he or she is subpoenaed or under oath at the hearing.

7. When in doubt, present testimony. First-hand testimony is always better than a written statement or document. Moreover, a valid hearsay objection to a document may cause the referee to discount the document completely.

8. Show up on time. Do not count on a referee waiting beyond the scheduled time for you to appear. If you have a last minute emergency or an unforeseen delay en route, contact the referee office immediately.

Follow the advice on the hearing notice to arrive early. You can review the Job Canter documents in advance and avoid facing a "surprise from the file" during the hearing.

9. Present the eyewitness. This is one of the most common mistakes. Offering a witness who has no firsthand knowledge of the event in question is a waste of time and could cost you the case.

10. Object to hearsay evidence of the other side. They have the right to object to any evidence of yours which is hearsay, so you should object to theirs.

11. Present the key document. Be prepared to leave it with the referee. Photocopies are acceptable but bring along the original in case the other side tries to challenge it. If you do not possess a key document, it can be subpoenaed in the same manner as a witness.

12. Summarize voluminous written material. Evidence is judged on quality, not quantity. Submitting a bewildering stack of papers can hurt you rather than help you. If you feel you must, then at least prepare a summary to help the referee and Board take proper note of the items. Be aware, however, that the other side has a right to challenge your summary and to examine the original material from which the summary was compiled.

13. In questioning your witness, avoid leading questions. A leading question is one which suggests the answer, often a "yes" or "no". These types of questions detract from the credibility of the witness. In eliciting the direct testimony of the your witness, ask short questions which allow the witness to relate a fact or describe an event in his or her own way. (You may ask leading questions when cross-examining a witness of the other party, however.)

14. Explain technical terms, occupational slang and strange customs of the trade. If it's not commonly understood outside of your business, trade or profession, explain it. Otherwise, you may confuse the referee, the Board and the courts (if it goes that far) and receive a disappointing decision.

15. Avoid excessive cross-examination. It is very rare for a party to make his or her case on cross-examination. More commonly, you can lose the case by unintentionally giving the witness the chance to repeat and elaborate upon all the adverse testimony just given. However, make sure any claimant statement, related to the issue being ruled on, and which is not considered factual, is refuted during the hearing.

16. Do not assume the referee knows every law enacted or every decision issued. You can reasonable assume the referee will know about a point of law in the unemployment field, but offering the referee copies of, or the citations to, unemployment court decisions related to your case would not hurt.

Statues and decisions outside of the unemployment field should be accurately cited, and a copy of the pertinent material provided if possible.

-- January 1996, Penn-Jersey Assn's "The Keystone"