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Eligible for unemployment if employer loses contract & can't offer comparable position?

I have a weird situation with my job that I'm hoping someone can help with. I've been working as a clinic manager at an orthopedic office for 3+ years on salary. Here's where it gets complicated: I'm technically employed by a healthcare management company that has a contract with the doctor's office where I physically work. Just found out that in June 2025, the doctor is ending his contract with the management company and taking his practice independent again. The management company told me yesterday they likely won't have another manager position at my salary level ($78K) available when this happens. I definitely don't want to stay and work directly for the doctor after the transition - we have some professional differences and I've heard he pays much less than I currently make. If the management company can't place me in a comparable position, would I qualify for unemployment? I'm not being fired for performance and I don't want to accept a massive pay cut or totally different role. Has anyone dealt with something similar with contract changes or business restructuring? Am I considered laid off in this situation?

Yes, you would likely qualify for unemployment in this situation. This would be considered a "lack of work" situation since your employer (the management company) no longer has your position available. The key elements here are: 1. You're not being terminated for misconduct 2. The job loss is due to business decisions beyond your control 3. You're available and actively seeking suitable work Make sure to apply for benefits as soon as you know your last day. When filing, explain that your employer lost their contract and couldn't offer a comparable position. ESD may contact your employer to verify details, so make sure you get something in writing from them explaining the situation if possible.

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Thanks for the detailed response! That makes me feel better. Do you know if I should wait until my actual last day to apply, or can I start the process once I have confirmation that they can't place me elsewhere? I'm worried about having a gap in income if there's a processing delay.

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i went thru almost the exact same thing last year except it was a dental office not ortho. the parent company got bought out and the new owners cut our location. ESD aproved me no problem but they did call my manager to verify everthing. just make sure ur boss will back up ur story that its not ur fault ur losing the job.

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That's really reassuring to hear! Did you have any issues with the weekly claim process? I've never been on unemployment before and I'm a bit nervous about doing something wrong.

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weekly claims are easy, just be honest about any hours u work or money u make. the website walks u thru it step by step. the hard part is getting through to someone on the phone if u have problems lol

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I actually work for ESD (not speaking officially) and this is what we call a "lack of work" situation. Here's what you should know: 1. You can actually apply up to a week before your last day of work 2. Make sure you get documentation from your employer about the contract ending and their inability to place you 3. Be prepared to explain why working for the doctor directly would not be suitable work (significant pay reduction, etc.) Also, very important - don't say you "quit" when filing. This is a layoff due to lack of available work. If your employer offers you a position with significantly reduced pay or responsibilities, you may still qualify even if you turn it down, but those situations get more complicated.

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This is incredibly helpful! I'll definitely get documentation from HR about the contract situation. One follow-up question - if they offer me a position that's 35% less pay but still in healthcare management, would that be considered "suitable work" that I'd have to accept, or could I decline and still receive benefits?

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Generally, a pay reduction of more than 20-25% from your previous position can be considered not suitable work, especially in a similar role requiring the same skills. Document the pay difference carefully if this happens. Each case is evaluated individually, but significant pay cuts are a valid reason to decline an offer while maintaining benefits eligibility.

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Have you tried contacting ESD directly to ask about your situation? I know it can be frustrating to get through on the phone lines, but I used a service called Claimyr (claimyr.com) last year when I had a similar question about my eligibility. They got me connected to an ESD agent in under 30 minutes when I'd been trying for days on my own. They have a video showing how it works: https://youtu.be/7DieNd3C7zQ?si=26TzE_zGms-DODN3 An actual ESD agent will give you the most accurate information for your specific situation, especially with the contract complications in your case.

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I hadn't heard of that service! I tried calling ESD once last week and gave up after being on hold for 45 minutes. I'll check out that link - thanks for the suggestion.

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does that claimyr thing acutally work??? the esd phone system is a nightmare. ive tried calling like 5 times and either get hung up on or wait forever and give up

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Yes, it really worked for me. I was skeptical at first but was desperate after trying for three days to get through. Got connected in about 25 minutes and the ESD agent was able to fix my specific issue. Definitely better than the endless hold music and random disconnects I was getting before.

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BE CAREFUL!! My cousin was in healthcare management and when her company restructured, they tried to claim she quit voluntarily! Make sure you get EVERYTHING in writing from your employer. Save emails, get a formal layoff letter, and document all communications about the contract ending and position elimination. Also, don't post about this on social media with your real name because ESD sometimes checks that during investigations and anything suggesting you left voluntarily could hurt your claim!

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That's really good advice - thank you. I'll start saving all communications now. My boss has been pretty straightforward about the situation so far, but you never know how things might change when it comes to HR and official documentation.

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Just a thought - have you looked into whether this situation might qualify under WARN Act protections? If the management company is large enough and multiple positions are being eliminated due to this contract ending, they might be required to give you 60 days notice and certain benefits. Might be worth asking about, especially if other colleagues are in the same boat.

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This is a good point but WARN Act typically applies when a larger number of employees (50+) are laid off at once. From what OP described, this sounds more like an individual position elimination. However, it never hurts to ask if there are any additional benefits or severance available due to the contract termination.

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I hadn't thought about that! As far as I know, I'm the only one at my location who works for the management company - the clinical staff are employed by the doctor. But I'll definitely ask about severance or other benefits.

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what about taking the job with the dr and then if its really bad just quit after and get unemployment then?? just thinking out loud lol

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That would likely disqualify you from unemployment benefits. If you voluntarily accept a new position and then quit without good cause (as defined by ESD), you wouldn't be eligible. The current situation - where the employer can't offer comparable work - is a much clearer path to benefit eligibility.

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Yeah, I definitely don't want to risk my unemployment eligibility. Plus, I know enough about how the doctor runs things that I'm 100% sure I don't want to work directly for him. Better to make a clean break and find something that's a better fit.

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I worked in HR for years and handled many unemployment claims from the employer side. Make sure you use very specific language in your claim: "Position eliminated due to business restructuring" or "laid off due to contract termination." Never say anything that sounds like you had a choice in the matter. Also, Washington state has pretty worker-friendly unemployment laws compared to many states. As long as you're not fired for misconduct or quitting without good cause, you should be eligible. The situation you described is a textbook case for eligibility.

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Thank you for the specific wording advice! That's exactly the kind of guidance I needed. I'll make sure to use those exact phrases when filing.

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