Last month, the Butler County Court of Appeals reversed the denial of unemployment compensation to a claimant who had not worked in more than 18 months while receiving long-term disability compensation. Harmon v. ODJFS, 2022-Ohio-1142. The ODJFS, UCBR and trial court had concluded that the plaintiff had not satisfied the 20-week qualifying work requirement since the employer had not reported wages in at least 18 months. The Court of Appeals reversed, finding “it was unreasonable to conclude that [she] was not employed during her base period simply because she did not physically provide services during that time” when she was still considered an active employee and received LTD during the entire base period. The Court did not address whether the claimant was available and able to work.
According to the Court’s opinion, the plaintiff was hired in
2010, was injured in February 2018 and was unable to return to work because of
disabling depression. After receiving LTD for more than 18 months
from the employer’s insurance carrier, the employer informed her in August 2019
that she would be removed from “active employment” and terminated under its
maximum leave policy unless she was able to return to work in the foreseeable
future. Because
the plaintiff was unable to return to work, she was terminated in October 2019,
continued to collect LTD until August 2020 and sought unemployment compensation
after the LTD compensation ended. Her
claim was denied on the grounds that she had not worked or been paid qualifying
wages for at least 20 weeks in the prior 15 months. The employer had not reported any wages
being earned since 2018.
It is undisputed that Harmon was on Honeywell's long term disability benefit plan throughout her entire base period. Consequently, the dispositive issue in this case is whether Harmon's receipt of disability payments, resulting from an employer-approved medical leave and paid by an insurance company via her employer's policy, constitutes "employment" pursuant to R.C. 4141.01(R).
Employment is generally defined as "service performed by an individual for remuneration under any contract of hire, written or oral, express or implied." R.C. 4141.01(B)(1). Thus, the statute requires both remuneration and service in order to be eligible for unemployment compensation. . . . "'Remuneration' means all compensation for personal services, including commissions and bonuses and the cash value of all compensation in any medium other than cash[.]" R.C. 4141.01(H)(1).
The Court determined that the LTD compensation constituted
renumeration for personal services rendered prior to the claimant’s medical
leave:
classifying [her] disability income as remuneration is consistent with the broad language of R.C. 4141.01(H)(1), which encompasses "all compensation for personal services" in its definition for remuneration. (Emphasis added.) . . . Additionally, such a broad interpretation of the definition of remuneration is supported by the Ohio Administrative Code, which defines the term "remuneration" to include "vacation pay or allowance, separation pay, holiday pay, paid absence allowance [and] downtime paid absence allowance[.]" Ohio Adm.Code 4141-9-04(B). As such, it is evident that the term "remuneration" was intended to encompass private disability payments an employee receives pursuant to her employer's disability policy.
The Court also concluded that the claimant could be considered
to have served while she was still on active employment status even thought she
did not personally work a single day while on medical leave:
Ohio law clearly recognizes that an applicant may be entitled to unemployment compensation and can establish "qualifying weeks" during her base period without providing actual service to an employer during that time. Such a proposition is consistent with the statutory language of R.C. Chapter 4141, which suggests an employee's service and remuneration for that service are not required to be contemporaneous to establish a qualifying week or constitute remuneration. See R.C. 4141.01(O)(1) (defining qualifying week to include weeks the individual "earns or is paid remuneration in employment"). . . .
Based upon this language, we find that an employee's past "service" can be used to establish a "qualifying week" for unemployment compensation purposes. This is because R.C. 4141.01(O)(1) clearly indicates a qualifying week may be based upon remuneration that is earned before it is ultimately paid to the employee. As such, we conclude that an applicant, like Harmon, can establish a "qualifying week" based upon her receipt of disability benefits paid by her employer as remuneration in exchange for services she previously provided during her employment.
Indeed, the Court found the UCBR to be unreasonable in
denying unemployment compensation:
it was unreasonable to conclude that [she] was not employed during her base period simply because she did not physically provide services during that time. This is because, and as explained above, [she] was an active status employee receiving remuneration in the form of disability payments while on an employer-approved disability leave during her entire base period. [She] received this remuneration in consideration of the services she had previously provided to Honeywell before becoming injured and totally disabled in 2018.
. . . we conclude that the weeks during which Harmon received disability benefits during her base period are "qualifying weeks," and the UCRC erred in disallowing Harmon's application on the basis that she did not have 20 weeks of employment during her base period.
NOTICE: This summary is designed merely to inform and alert
you of recent legal developments. It does not constitute legal advice and does
not apply to any particular situation because different facts could lead to
different results. Information here can change or be amended without notice.
Readers should not act upon this information without legal advice. If you have
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