All good things come to an end, and unfortunately that includes most employment relationships. Whether a nanny is let go because of an impending move, leaves for a different position, or is terminated due to a performance issue, navigating the “conscious uncoupling” of a work relationship can be tricky, particularly if that former employee goes on to file for unemployment benefits.

Like other professionals, nannies are entitled to file for and receive unemployment benefits when a job comes to an end. But when you get the notice in the mail stating that a former employee has applied for these benefits, it’s normal to feel like you have unanswered questions and concerns. Given the personal nature of the nanny-parent business relationship, many people wonder how unemployment benefits actually work and whether or not they’ll be penalized in some way if their former nanny receives these benefits. Luckily, in most instance, the process of a nanny receiving unemployment payments is pretty painless for former employers. Here’s what you need to know about how these benefits work:

When is a nanny eligible for unemployment benefits?

Nannies are eligible for unemployment benefits when they’re let go for any reason other than “for cause.” Being terminated “for cause” means the nanny was let go due to a performance issue or some other problem that made their termination necessary. Additionally, a nanny is not eligible for unemployment if they voluntarily decide to leave a position, except in circumstances where they are forced to leave due to intolerable working conditions, including things like facing discrimination and harassment. If a nanny is let go simply because you don’t require his or her services anymore or any other reason beyond his or her control, that does not constitute being “for cause” and he or she is eligible for benefits.

What happens when a nanny applies for unemployment benefits?

The first thing that happens when a former employee applies for unemployment benefits is that a claim notice is mailed to you by the state. You don’t necessarily have to act on this notice, as the state unemployment office ultimately makes the final determination of benefits eligibility; however, the notice is intended to inform you that a claim has been made and to give you the opportunity to verify the facts of the nanny’s termination.

Do I have the right to refute my former nanny’s claims?

The claim notice you get in the mail will specify a deadline for refuting the claim, which is fully within your rights as an employer if the employee was terminated for cause. “You know, a lot of times employees file for unemployment when a job ends and they are in the interim of finding a new job, and the family has no problem with them receiving benefits because they no longer needed the care,” says Chelsea Mills, a Senior Partner Relations Specialist for HomePay. But occasionally there are instances in which a nanny is fired for cause and still attempts to file for unemployment benefits.

In those instances, says Mills, you are fully able to refute the claim, but you’ll need documentation to back up what you’re saying. Mills recommends keeping detailed employment records and documenting any incidents leading up to termination of the employee. Further, she notes, California is one of several states that require employers to provide employees with a written termination notice, and it’s important to keep a copy of that notice on file. The benefits claim notice should include detailed information about where to send your documentation and how long you have to file it.

Who pays for unemployment benefits?

Unemployment benefits are paid out by the state using a portion of the payroll taxes that employers should be paying regularly. “Assuming that the family has been paying their required unemployment taxes throughout the time that the employee worked for them, the state will pay the employee directly, and it does not come to the family in the form of a bill,” explains Mills.

But if, for some reason, you were paying your nanny “under the table” and not taking out the necessary taxes, the nanny would not be eligible for unemployment benefits, and you would then be liable for paying all back taxes, penalties, and interest.

How will this affect my tax rate?

Generally speaking, having a former employee file for unemployment is not a bad thing for you financially. The exception is your payroll tax rate if you go on to hire other caregivers. “Normally, depending on the situation, the tax rate is anywhere from 3-5 percent” says Mills. If a former employee is granted unemployment benefits and you hire a new nanny, you could see that rate go up slightly, though Mills says it’s usually only by a few points. “We haven’t really seen it do some drastic jump beyond 9 percent,” she notes, “and if they don’t hire anyone after they let that caregiver go, it doesn’t affect them at all.”

What about my worker’s compensation insurance rates?

Worker’s compensation insurance rates are determined solely by what classification code a worker falls under and whether or not the employer has previously filed bodily injury claims on employees. These rates are unchanged by unemployment benefits.

Ultimately, unemployment benefits should not feel like a negative or scary thing if your nanny’s employment, termination, pay, and benefits were all handled in a professional manner. Read the claim notice carefully, and if there’s no reason to refute it, look at it as something that will help carry your former nanny through to his or her next great opportunity.