There's no point in wasting your time and possibly running up legal bills, by contesting the payment of benefits to a worker who clearly deserves them. So, if you have to lay someone off because business is not booming as you had hoped, or if you fired someone because you want to hire your brother-in-law instead, don't bother to object when your ex-employee makes a claim.
On the other hand, if you have to fire someone for stealing or someone quits to start their own business, you can and should make an effort to prevent your tax rate from rising as a result.
What do you do if it's a gray area, and you're not sure whether the worker deserves benefits or not? Go ahead and contest the claim as discussed below, up to the point where you'd need to hire a lawyer. At that point, if the worker has won, you may want to reevaluate whether the issue is worth pursuing. Your lawyer should be able to tell you whether your chances of winning are good, or slim to none.
When not to contest a claim. There may be times when it's not in your interest to prevent your worker from collecting benefits, even if you would probably win if you tried.
The most common situation is where you want to get rid of someone but don't have a good (or a legal) reason for doing it, or you suspect the worker is going to sue you. What do you do? You "buy out" the worker by offering a severance package. The package may include an agreement that you won't do anything to prevent the worker from collecting unemployment, along with some severance pay, continuation of health benefits, or other items.
If you go this route, just be sure to have the worker sign an adequate release of liability before he or she leaves.
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The Business Tools area contains a sample release from liability that you may find useful. A written release from liability is a type of contract. As in any situation where you are asking someone to sign a contract, your lawyer should read over the document before you use it and should be involved if negotiations with the worker demand changes in the contract.
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