Governor Rick Scott signed House Bill 7005 into law on June 27, 2011 amending the Florida Unemployment Compensation Law (the “Law”). These amendments to the Law are intended to reduce state unemployment tax rates for most employers, create a sliding scale of available benefit weeks which can rise and fall annually based on with the State’s unemployment rate, broaden the criteria by which a terminated employee can be disqualified from receiving benefits, and prevent double recovery of severance pay in excess of unemployment benefits. The amendments also modify the Law’s statutory construction provisions to remove language which required that the Law be liberally construed in favor of a claimant.  A summary of these amendments are as follows:

Reduction in State Unemployment Taxes

A reduction in employer tax rates is projected to save Florida employers approximately $33 per employee beginning in 2012 by adjusting their tax calculation. Employers will also have the option to pay their taxes in installments during 2012, 2013 and 2014.

Duration of Unemployment Benefits

Effective January 1, 2012, the Law will adjust the duration of benefits from the current maximum of 26 weeks to a period of 12 to 23 weeks based upon the average unemployment rate for the State of Florida for the third calendar quarter of the previous calendar year. When the average state unemployment rate is 5% or less, the maximum duration of benefits will be 12 weeks, but will increase by a week for each half-percent increase in the state unemployment rate up to a maximum of 23 weeks when the state unemployment rate is over 10.5%. Recipients will still be eligible for federal unemployment compensation.

Disqualification from Benefits

The definition of “misconduct” sufficient to disqualify a terminated employee from unemployment benefits under the law has been revised to include behavior “irrespective of whether the misconduct occurs at the workplace or during working hours.” It includes conduct demonstrating a “conscious” (as opposed to a “willful and wanton”) disregard for an employer’s interests where such behavior is found to be a deliberate violation of the reasonable standards of behavior an employer expects of its employee. The amended definition of misconduct also now specifically includes: (1) chronic absenteeism or tardiness in violation of a known policy of the employer following a written reprimand or warning relating to more than one unapproved absence; (2) willful and deliberate violation of regulations adversely affecting an employer’s licensure or certification by the State; and (3) a violation of an employer’s rule unless the employee did not know the rule, the rule is not reasonably related to the job environment or performance, or the rule is not fairly or consistently enforced.

The amendments also provide that if an employee is terminated for violation of any criminal law, which was in connection with his or her work, and the individual was convicted or pleads guilty or nolo contendere to such a crime, then the individual is disqualified from receiving benefits. An individual can also be disqualified when he or she is arrested for such a crime (prior to an adjudication or admission of guilt) and the employer proves that the arrest was due to a crime against the employer, the employer’s business, customers or invitees. The amendments also add a specific exclusion from benefits for any week in which an individual is unavailable for work due to imprisonment.

Additionally, an employee who quits his or her employment and claims unemployment benefits must now meet the standard of showing that the employee left his or her job: (1) for cause attributable to an employer “which would compel a reasonable employee to cease working;” or (2) attributable to an individual’s illness or disability requiring separation from work.

Severance Pay

Effective August 1, 2011, the Law now prevents double recovery during weeks in which the claimant is receiving severance pay in excess of the unemployment benefit amount. Prior law prohibited such recovery based on the overly semantic distinction that the claimant received wages “in lieu of notice,” but not if the claimant received “severance pay.”

These amendments to the Law emphasize the importance of publishing reasonable rules of conduct in an employee handbook disseminated to your employees upon hire and keeping a signed acknowledgment in each employee’s personnel file indicating that they received the employee handbook. They also indicate the importance of issuing and maintaining documentation of warnings prior to termination, unless, of course, where termination is required for a single act of misconduct.

Employers also must be prepared to introduce such warnings and testimony into evidence at unemployment appeals hearings to prove the violation of Company policies. While the new Law makes clear that evidence in such hearings will not be held to the standards required by a court and give the Appeals Referee some discretion to rely upon hearsay evidence, failure to maintain such evidence in the ordinary course of business (about which the records custodian can testify at the hearing) and provide such evidence to all parties prior to hearing will lessen the chance that it will be accepted into evidence or be found to support the Appeals Referee’s findings.

If you have any questions regarding this new Florida law, please contact any member of our Firm’s Labor and Employment Law Department .