Back Pay: Unemployment Tip # 009

Getting back pay while unemployed seems like a great thing, right?  In Minnesota, paid back can have unintended negative consequences, specifically, as it relates to unemployment benefits.

If your job ended and you get a check, start asking questions. If possible, never cash the check until you understand all of the ramifications. Of course, it is difficult to defend against an automatic direct deposit.

On the other hand, Applicants can inadvertently agree or trigger “back pay” ramifications described under Minnesota statute 268.035.

Other Laws Use the Term Back Pay Too

This term is used in dozens of other unemployment laws too. For example, the laws for wages and delayed payments under statute 268.085.

As you can see, what is or is not backpay can become extremely confusing.

Unemployment Tip # 009 –  Even if a worker or employee is no longer receiving unemployment benefits, the receipt of back pay can result in an appeal, audit or an overpayment

What Do you Call the Payment?

What to call money received after a job ends is confusing. The storyline why or how money is granted is going to be unique to that specific person.  

The harm in calling money “back pay” is the impact it will have on past and future unemployment benefits. Applicants who cash a check without considering the terms can get burned.

For example, the terms attached to a settlement agreements, worker compensation payout, or gift can be revised, such that the documents do not trigger future problems. This means taking the negotiation process seriously.

You Need the Money Really Bad

Every worker should be thrilled with the opportunity of acquiring additional money from their former employer.  That isn’t the issue. Instead, the issue is what to call the money received.  

When an employer or Minnesota DEED call the money back pay, problems can ensue.  In other words, preventing an overpayment or arguing why the receipt of money didn’t trigger back pay laws is worth exploring.

How Can An Unemployment Lawyer Help?

Attorney Jasper Berg