Created December 4, 2007

In a decision that should attract the attention of retailers who have been gearing up for the holiday shopping season by hiring short-term employees, the Virginia Court of Appeals recently ruled that an employee who is terminated at the end of a seasonal at-will employment relationship is not considered to have left employment “voluntarily” and, thus, is entitled to unemployment benefits.

In Chauncey F. Hutter, Inc. v. Virginia Employment Commission, 50 Va. App. 590, 652 S.E.2d 151 (2007), a tax preparation company hired a receptionist for the tax season, with an understanding that her employment would end on April 15, 2005. After completing the employment term, the receptionist filed for unemployment benefits. Under the Unemployment Compensation Act, an employee is not entitled to unemployment benefits if he/she leaves work “voluntarily.” Virginia Code § 60.2-618(1). After surveying over fifty years of case law on the subject, the Court of Appeals ruled that when an employee’s term of employment expires and the employee is released from employment, “[the employee] did not leave work ‘voluntarily’; rather, work left [the employee].” Hutter, 652 S.E.2d at 154. Thus, the receptionist hired only for the tax season was entitled to unemployment benefits.

This means that those employers that offer seasonal jobs should anticipate paying unemployment taxes for their short-term employees. If you have questions about the impact of this decision or how to potentially mitigate such costs, please do not hesitate to contact General Counsel, P.C.