Help Reducing Your Unemployment Claim Liability

Terminating or implementing a reduction in force (RIF) is never desirable. However, for a number of reasons this does happen and is an unavoidable necessity. Unemployment Insurance Claims (UI Claims) can have a negative impact on your business if left unmanaged. UI Claims can result in your business experience being reassessed and can cause an increase in your tax rate.

Luckily, there are a number of things you can do to manage and help reduce your unemployment claim liability. Here are a few tips to help you navigate this aspect of your business:

Pay Attention to ‘Notice to Base Year’ Employer Forms

Notice to Base Year Employer Forms come across like a courtesy notification requiring no response. It comes with no form to fill out, and no questions to answer. For that reason, many employers miss this opportunity to manage its impact on their business.

In essence, the Notice to Base Year Employer is informing you that a former employee has separated from the employer they had after you, and you are being included in the claim as a “base year employer.” What this means, is that your business can be charged a percentage of their unemployment, sometimes this can be as high as 100 percent.

This charge will be automatic unless you respond within 30 days. Even though it comes with no questions, what you need to provide is the same information you would on a Separation Statement; when that employee worked for you and their wages. You can then send this as a letter, fax it, or simply write it on the form someplace and send that back to them.

Hold onto Your Workforce with Shared Work Program

Like we mentioned, sometimes a RIF is necessary. Business may slow down and there simply isn’t enough work for your employees. For example, this can happen with seasonal businesses, restaurants, and businesses that rely on tourists.

California, for example, offers a Work Sharing Unemployment Insurance program, which allows payment of benefits to employees whose hours and/or wages have been reduced. This was established as an alternative to layoffs, and to help employers shoulder the burden that could come with a layoff situation.

The program accommodates those employees that are working 20 to 36 hours a week. These employees receive a percentage of their benefits corresponding to the lost wages. This program also works to help employers retain skilled workers during their slow time.

Your company does have to apply to this program. More information is available on the EDD website.

Assist Laid-off Employees in Their Job Search

It can be helpful to use some in-house resources when laying off a good employee to jumpstart their job search. If you have business associates that may be hiring you can put in a good word, or you could hire a career coach to assist with the employee’s resume and job search. This is a fairly small investment compared to what it could end up saving you. Whatever you can do to get that employee back into the workforce as soon as possible is going to alleviate some of the burden from you and your unemployment tax rate.

Rehire Former Employees on Unemployment

If you know an employee that you laid-off is on unemployment, put them on the top of your hiring list. When a position becomes available, give them a call! Assuming, of course, they are someone you want to rehire. Anyone on unemployment is required to accept a suitable position, and this will be in your best interest as well. An added benefit; less training!

Consider Using Staffing Companies

This is a great option for smaller businesses for numerous reasons. One, when a small business RIFs an employee they take a greater hit in terms of tax rate. Staffing companies take the hit for you. Also, for many companies the economy isn’t a steady environment and therefore their staffing needs may fluctuate on a regular basis. Last thing your company needs is to hire people for a few months and then fire them. If you are uncertain how long you will need an employee, staffing companies will give you a safety net for these situations, as well as give you the option to hire the employee full-time if you decide that is what you need.

Get Help Navigating the System

Trying to navigate the unemployment system can leave you with more questions than answers. It can also be extremely frustrating dealing with the long wait times on phone calls to state agencies. Other frustrations can happen when different claims specialists tell you different things – more common than not, because they are two different people and will make two different decisions.

Getting professional help can eliminate these frustrations and more. That’s why we created Us4U – to provide busy employers like you with a simple, cost effective, efficient software tool to manage your unemployment costs. Contact Us4U with any questions you may have and start saving today! (800) 928-5750

Unemployment Solutions For You Joined EY on May 20, 2022.

The information on this website is accurate through May 20, 2022. It has not been updated to reflect the transaction.