A Closer Look...

Unemployment insurance

Employers fund UI. The amount a person receives is a function of salary up to a monthly maximum amount. Employers pay a federal tax of 6.2% on the first $7,000 earned by each worker. If all state unemployment insurance is current, employers usually receive a 5.4% credit, and the remaining .8% goes to the federal government. In addition, most states have state unemployment taxes. All states allow for an experience rating which involves charging lower percentages to employers who have terminated fewer workers. Tax rates may vary from 1% to 10%.

Keeping unemployment taxes low

Organizational philosophy can vary, however in order to keep state unemployment taxes as low as possible, organizations have to adopt a process and stick to it. Business cycles, economy, competition, etc... will inevitably lead to companies terminating employees at no fault to the employee. For larger organizations, outplacement services can help re-employ these displaced workers which will help to minimize the employer's unemployment tax rate. Employees who are terminated for cause, can however be an unnecessary source for increasing state unemployment tax. To minimize these costs, organizations must have policies in place outlining acceptable / unacceptable employee behaviors. There must be a progressive discipline process in place that managers understand, follow and document. And, employers need to contest all unemployment claims made against them by employees terminated for cause.

Our specific services

We can:

• Audit your organizations state unemployment account to explain / verify your current tax rate
• Review organizational policies to ensure proper employee conduct is communicated
• Audit the organizations progressive discipline policy and ensure that it is being followed properly
• Audit prior unemployment claims to ensure that they are being properly defended
• Assist in preparation for unemployment hearings