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# Monday, October 11, 2010

Here’s some more great insight from our Client Relationship team.  While geared toward and sent to TALX clients, I thought our blog readers might find some useful information in the following as well.

 

10 Ways to Minimize Your Unemployment Costs

 

Unemployment taxes are one of the few taxes employers can directly control and tiny fluctuations in an employer’s tax rate can have large monetary effects. Like other taxes, unemployment taxes represent additional overhead, however most business taxes are fixed by law. Unemployment tax rates fluctuate based on the employer’s payroll and its ability to control the unemployment benefits charges against its account. An employer’s unemployment taxes go into a fund specifically for unemployment. The amount that is withdrawn from that account is what determines an employer’s tax rate. Therefore every unemployment claim that is not protested or lost has the potential to directly affect an employer’s tax rate.

 

Employers may directly impact their bottom line with a few strategic approaches to reducing unemployment costs. While perhaps these practices may be old news, they bear repeating since controlling all costs is critical, now more than ever, in the current economic climate.

 

1. Document, document, document

 

Effective documentation is crucial. Many times employers may have the burden of proof with the state agency. Documentation may help in matters outside UI such as EEOC matters and employment litigation. Documentation in discharges and voluntary quit situations is different. Reference TALX’s separation checklists illustrating best practices. Your CRM can provide additional copies. In the majority of cases involving discharge, documentation (meeting the burden of proof) is the only means an employer may have to back up the decision to terminate. Retain documents for at least 18 months. Provide policies to employees and obtain a signed acknowledgement of policies or any changes to policies.

 

2. Compose effective written warnings

 

Warnings are an aspect of progressive discipline that effectively ensures an employee understands what is expected of them. State unemployment agencies look for warnings, in most instances, to determine if the claimant was discharged for misconduct and effective, clear, non judgmental warnings help the employer meet the burden of proof in discharges. Elements of a good written warning include the violation, expected action to improve, the consequences if the standard is not met, employee’s action plan and comments, signature of employee, signature of witness, signature of issuer.

 

3. Manage your human resources wisely

 

Practices include performing detailed reference checks. Consistently use progressive discipline. Enforce rules and policies uniformly. Follow an employee’s progress from the moment they are hired. In addition, thorough talent assessment before hire will alleviate problems down the road. The TALX talent assessment division, pan, which delivers employee acquisition, evaluation and development solutions for corporate and government clients worldwide is a content aggregator with hundreds of assessments from more than 50 of the industry’s top test publishers. Pan can help reduce costs in the hiring and recruiting process as well as decrease turnover and its related costs. Please see http://www.panpowered.com/ 

 

4. Utilize your TALX partnership to full advantage

 

TALX is your partner and works with you at every stage of the unemployment process—claims, appeals, hearings, charge audits, best practices, unemployment reports and client education. Don’t hesitate to ask any questions of your service team or Client Relationship Manager. Insight web reporting provides the tools to stay abreast of unemployment activity and costs. TALX.com (http://www.talx.com) features ongoing blogs, e-seminars and industry highlights. Your contract may offer guidance, preparation and participation in hearings from contracted hearing representatives who will assist you in winning the appeal. Providing timely information and sufficient information to TALX, especially at the initial level of the claim, can help you avoid penalties, loss of appeal rights and being charged for benefits collected.

 

5. Track unemployment costs and budget appropriately

 

Use TALX reports and services to track claims, monitor potential liability and review past history to foresee budgets for unemployment taxes. Be familiar with the base period and benefit year in your states and use tax information provided by TALX to ensure budgets are adequate.

 

6. Know the difference between voluntary resignations, discharges and lack of work claims

 

A voluntary resignation, especially for non-compelling reasons, is usually disqualifying but there are significant exceptions. States may allow benefits for a quit with good cause.  In a voluntary quit, the burden of proof rests with the former employee. A discharge for misconduct is defined as willful misconduct connected with the work which resulted in a tendency for damage to the employer’s interests. A discharge in which the employer initiates the termination puts the burden of proof on the employer. In discharges avoid the use of unsatisfactory performance in cases where the employee is able to perform the job and is negligent of performing their duties. In discharges due to misconduct be prepared to provide the final incident which led to the discharge. Lack of work claims provide benefits to individuals who are separated from work due to no fault of their own and are the reason unemployment insurance was created. A claimant must be able to work, available for work and actively seeking work.

 

7. Be prepared for hearings

 

Hearings require first-hand testimony as to the facts and events under consideration. Hearsay evidence is generally not persuasive and may not be considered at all. Depending on your contracted services, provide all information to your TALX hearing representative when they contact the individuals at your organization to prepare for a hearing. Have all documents readily available during the hearing.

 

8. Appeal when warranted

 

An appeal is your request to the state to assign a hearing officer to review the facts of a particular case because you believe the eligibility rules have not been properly applied. Appeal if you disagree with a decision allowing the claimant benefits. You must be prepared to present facts and evidence.

 

9. Weigh the consequences of partial employment, layoffs and independent contractors

 

Know when employees are eligible for partial weeks of unemployment. Your CRM can provide you with a listing of state-specific guidance. In the case of layoffs, helping severed employees find jobs benefits the employer and employee. Independent contractors may file for unemployment and the employer needs to be able to prove he or she is not an employee of your company.

 

10. Consider reemployment strategies

 

Helping transitioning employees find another job rapidly after a staff reduction, position elimination, or other involuntary, non-misconduct separation can help control the duration of non-protestable claims – the claims that normally result in the longest duration and highest total benefit payout. TALX Reemployment Services can help by providing faster reemployment through one-on-one job coaching, e-learning, and other key outplacement elements. Visit http://www.talx.com/Solutions/Compliance/UnemploymentTax/  for more information.

 

Tammy Mullin 

Monday, October 11, 2010 8:40:48 AM (Central Daylight Time, UTC-05:00)  #    Comments [0] -
Unemployment Cost Mgmt

IRS CIRCULAR 230 DISCLOSURE: Any tax advice in this communication is not intended or written by TALX to be used, and cannot be used, by a client or any other person or entity for the purpose of (i) avoiding penalties that may be imposed on any taxpayer or (ii) promoting, marketing, or recommending to another party any matters addressed herein.

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