Skip to content 
Benefits paid on a claim are charged to the employer’s account, and those charges feed the reserve ratio that sets next year’s contribution rate. An employer can protest a claim, but disqualification requires deliberate misconduct in wilful disregard of the employer’s interest, or a knowing violation of a reasonable and uniformly enforced rule, and the employer carries that burden.
“We fired him for cause and documented it. How is he collecting benefits?”
“Is it worth contesting a claim, or should we save the argument for something bigger?”
“We did not reply to the notice because the claim looked obviously valid. Any harm in that?”
The Charge Is the Point
A claim is not simply a former employee collecting money from the state. Benefits paid are charged against the employer’s account, the account balance drives the reserve ratio, and the reserve ratio sets the contribution rate for later years, a mechanism worked through in the rates article.
That is what makes separations a financial decision as well as a personnel one. A single claim does not move a rate noticeably; a pattern of them moves it for years, and the effect compounds because the rate applies to every employee rather than to the person who left.
It also explains why the question is worth taking seriously at the moment of separation rather than at the moment of the rate notice. By the time the rate arrives, the charges behind it are history.
The timing gap is wider than most employers expect. A separation this quarter produces charges over the following months, which feed an account balance measured against three years of wages, which then sets a rate applied in a later year, so the consequence arrives long after anyone remembers the conversation that caused it.
Fired for Cause Is Not the Same as Disqualified
The first question at the top is the most common grievance employers bring to this subject, and the answer is that the test is not the one they applied.
A business may dismiss someone for entirely sound reasons and still see benefits allowed. Under Chapter 151A, Section 25, disqualification on a discharge requires deliberate misconduct in wilful disregard of the employing unit’s interest, or a knowing violation of a reasonable and uniformly enforced rule or policy.
Read the two limbs carefully. The first is about state of mind: the conduct has to have been deliberate and in disregard of the employer’s interest, not merely unwelcome. The second is about the rule: it must have been reasonable, known to the employee, and enforced uniformly.
Uniform enforcement is where well-documented cases fail. A policy applied to the person who was dismissed and overlooked for others is not uniformly enforced, and the file that proves the breach can also prove the inconsistency.
The burden sits with the employer on a discharge, which is the practical reason contemporaneous records matter more than a persuasive account given months later.
Who attends the hearing matters as much as what the file says. First-hand evidence from the person who witnessed the conduct or issued the warning carries weight that a summary from someone repeating it does not.
What Actually Decides a Separation
| The Separation | What Employers Assume | What Actually Decides It |
| Layoff or redundancy | No argument available | Correct. Benefits are payable and the charge follows |
| Poor performance | Fired for cause, so disqualified | Inability is not misconduct. Performance failures rarely disqualify |
| A single serious incident | One breach is enough | It can be, where the conduct was deliberate and the rule was known |
| Repeated rule breaches | Documented warnings settle it | Strong, provided the rule was reasonable and uniformly enforced against everyone |
| Resignation | A quit is never chargeable | Usually right, unless the person left for good cause attributable to the employer |
| Measurement | Terminating for good business reasons is not the test | The employer must show deliberate misconduct in wilful disregard of its interest, or a knowing violation of a uniformly enforced rule |
Performance cases deserve their own sentence because they generate the most frustration. Inability is not misconduct. Someone who tried and failed is in a different category from someone who knew the rule and chose otherwise, and only the second is disqualifying.
The Numbers Behind a Claim
- 2: the limbs of the discharge test, deliberate misconduct or knowing violation of a uniform rule.
- 1: the party carrying the burden on a discharge, and it is the employer.
- 3: the rights an employer can lose by not responding to a request for information.
- 30 days: the window to appeal a Board of Review decision to a District Court.
- Years: how long charges keep affecting the rate through the reserve ratio.
- Every employee: who the resulting rate applies to, not just the person who left.
The Cost of Silence
The third question has the sharpest answer in this article, and it is worth knowing before the next notice arrives.
Per the Department’s guidance on employer responsibilities, an employer that fails to respond to a request for information can lose the right to protest benefit charges to its account, the right to be notified of the eligibility determination, and the ability to appeal that determination.
The first of those carries a clause employers should read twice: the right to protest charges is lost even where the employer would normally have been relieved of them.
So silence is not neutral. An employer who declines to respond because the claim looked valid may have forfeited relief it was entitled to on charges it never intended to contest, and no part of that is recoverable afterwards.
The remedy is procedural rather than strategic: respond to every request, even the ones where there is nothing to dispute, and make sure someone is watching the account the notices arrive in, which is the same discipline responding to an audit notice depends on.
When Contesting Is Worth It
The second question is about judgment, and the honest answer is that contesting is worth it selectively rather than reflexively.
Contest where the facts genuinely meet the standard: a deliberate breach of a known and uniformly enforced rule, documented at the time, with a decision-maker available to testify. Those cases are winnable and the charge relief is real.
Do not contest a straightforward layoff. There is no argument to make, the claim is properly allowed, and a record of unsuccessful protests does nothing for credibility in the cases that matter.
The middle ground is where judgment earns its keep. A resignation that the employer believes was voluntary and the employee describes as forced turns on whether there was good cause attributable to the employer, and that is a facts question best assessed before a position is taken.
Appeals run through the hearings process and the Board of Review, with a further appeal to a District Court available within thirty days of the Board’s decision. Each stage decides on the record built below it, which is the recurring lesson across this entire subject.
Common Mistakes With Claims
- Treating a good business reason for dismissal as the legal test for disqualification.
- Relying on a rule that was enforced against one person and overlooked for others.
- Ignoring a request for information because the claim appeared valid.
- Building the documentation after the separation rather than at the time.
- Contesting every claim, including layoffs, and diluting credibility.
- Discovering the cost of charges at the rate notice rather than at the separation.
Separations Are a Rate Decision
Every part of this connects back to one number. Charges feed the reserve, the reserve sets the rate, and the rate applies to the whole payroll for years. Handling separations carefully is cheaper than any later argument, and the wider system sits in the reemployment tax audit guide, with the current employer guidance published through the Department’s employer pages.
Ed Parsons CPA reviews charge activity against rate notices, identifies charges that should not have been applied, and keeps the response discipline in place that preserves the right to protest them, under the firm’s Massachusetts payroll tax CPA service.
Where charges or a rate assessment have already produced a balance, a Business CPA Tax Resolution Case Analysis prices the exposure before anything is signed or paid.
