I work for a small non-profit company that provides support services
to people with disabilities.

One of our employees was fired for substantiated verbal abuse of a
person with Mental Retardation (that she was charged to support and
keep safe).

Now she is collecting unemployment benefits!!

Background:
-empoyee received 3 documented meetings/warnings re: mistreatment of
individuals she was charged to support.
-employee received 1 additional written warning for the same.
-Witness saw employee abuse the individual.
-We suspended the employee (with pay pending okay investigation"
-employee immediately filed for unemployment benefits.
-5 days later, employee was terminated due to substantiated abuse.

Employment Security Commission found in favor of the employee, finding
her more credible than the employer. Based on her work vs. our
documentation?

What is the employer to do? This may cost us $30,000+ out of our
pockets. (Non-for-profit can't contribute to the staff coffers)

What do we do? How can this happen?

Scott wrote: I work for a small non-profit company that provides support services to people with disabilities. One of our employees was fired for substantiated verbal abuse of a person with Mental Retardation (that she was charged to support and keep safe). Now she is collecting unemployment benefits!!

....
Employment Security Commission found in favor of the employee, finding her more credible than the employer. Based on her work vs. our documentation? What is the employer to do? This may cost us $30,000+ out of our pockets. (Non-for-profit can't contribute to the staff coffers)

1. WHAT $30,000? ESC didn't order her reinstated, according to
your post -- they merely authorized unemployment benefits. It's
possible that the state unemployment premiums may increase next
year because of the finding -- but it's not particularly likely.

2. The company may appeal to an appeals' board, and then to
the courts, in most cases.

3. What do you mean "staff coffers"?

Either there's less here than meets the eye, or there's more
here than meets the eye. Your post doesn't really make much
sense as it stands.

Scott wrote:
I work for a small non-profit company that provides support services to people with disabilities. One of our employees was fired for substantiated verbal abuse of a person with Mental Retardation (that she was charged to support and keep safe). Now she is collecting unemployment benefits!!

That's why the employer is supposed to pay UIC premiums, then whether
she receives unemployment or not, you don't have to worry about it.
Background: -empoyee received 3 documented meetings/warnings re: mistreatment of individuals she was charged to support. -employee received 1 additional written warning for the same. -Witness saw employee abuse the individual. -We suspended the employee (with pay pending okay investigation" -employee immediately filed for unemployment benefits. -5 days later, employee was terminated due to substantiated abuse. Employment Security Commission found in favor of the employee, finding her more credible than the employer. Based on her work vs. our documentation?

The employer must show the firing was due to misconduct. What you
describe may be horribly bad but might not qualify as misconduct under
your state's law, as bad as that sounds.
What is the employer to do? This may cost us $30,000+ out of our pockets. (Non-for-profit can't contribute to the staff coffers)

Employers get an "experience rating" which determines how much they pay
in UIC taxes. This can range from as low as 0% to as much as 9%.
Usually a new employer or one with a really egregious turnover rate
might pay as high as the maximum 9% of payroll. That's up to $90 for
each $1000 in payroll up to the statutory limit of Unemployment
Insurance Coverage, usually $9000. If you have an employee who earned
$9000 or more and had the worst experience rating, that should be $810
in UIC taxes per employee who was paid that much.

My guess is that if your state has a "reimburse in lieu of contribute"
law for non-profit organizations, your non-profit is now required to pay
the entire cost of the specific person's unemployment benefits in place
of paying regular UIC contributions on all employees.

Presuming it was as much as $500 a week and your non-profit had to match
all of it, 26 weeks of UIC is $13,500 and I doubt it was that much as
even New York only pays $400 a week. I don't know where you get $30,000.
What do we do? How can this happen?

Next time stick with paying the UIC preminum instead of "reimburse in
lieu of contribute." It's probably cheaper long term.