I thought I’d send out some more real content today instead of my opinions about the world around us so here goes…..

When the unemployment compensation laws were originally enacted in the 1930s, the intent was to provide a supplement to individuals who were unemployed through no fault of their own.  However, unemployment laws have eroded (well, one opinion) to the point that even a person who voluntarily quits or is discharged may collect benefits!

A best practice for controlling unemployment insurance costs would be to make a probationary period a part of your company’s policy.  A new employee’s performance should be reviewed during an initial “probationary period.” If the employee does not meet expectations, you should determine whether additional training could bring the employee's work up to standards. If retraining is not a reasonable option and no alternatives exist, consider dismissing the employee as quickly as possible.

Even though most states do not recognize employer probationary periods and may award benefits to an employee if he was discharged for inability to do the job. Your liability for benefit charges is based on the amount of wages you paid the employee. Therefore, if you take immediate action regarding unsuitable employees, your unemployment liability will remain low.

Some states do provide for some type of probationary period within their unemployment compensation laws.  The states and particulars are as follows:

Colorado – The employer’s account is not charged if the claimant earned less than $1,000 (this applies to Merit Rated employers only).

Connecticut – The employer’s account is not charged if the claimant was employed for less than 30 days, whether or not consecutive, or if the claimant worked less than 240 hours for the employer.

Florida – The employer’s account is not charged if the claimant was paid less than $100 during the base period of if the claimant was terminated due to unsatisfactory performance during the initial employment probationary period.  The probationary period cannot exceed 90 days and must be an established plan (Employee must be informed of the plan within seven days of the date hired.).

Georgia – The employer’s account is not charged if the claimant was employed for less than 30 days, whether or not consecutive, or if the claimant worked less than 240 hours for the employer.

Illinois – The employer’s account is not charged if the claimant was paid less than $100 during the base period or if the claimant was terminated due to unsatisfactory performance during the initial employment probationary period.  The probationary period cannot exceed 90 days and must be an established plan.  (Employee must be informed of the plan within seven days of the date hired.).

Kentucky – An employer’s account is not charged if it employed the claimant for less than 10 weeks, whether or not consecutive.

Maine – The employer’s account is not charged unless the claimant worked in excess of 5 consecutive weeks or at least 6 consecutive weeks of employment.

Minnesota – The employer is granted relief of charges when an employee is paid less than $500 in the base period.

Missouri – The employer’s account is not charged if it paid the claimant $400 or less during the base period or if the claimant was employed for 28 consecutive days (calendar days) or less and this was noted on the employer’s wage report to the state.

North Carolina – The employer’s account is not charged if the employee’s employment did not exceed 100 days and termination was due to inability to perform the job.

Oklahoma – The employer’s account is not charged if it paid the claimant $400 or less during the base period or if the claimant was employed for 28 consecutive days (calendar days) or less and this was noted on the employer’s wage report to the state.

Rhode Island – For any new claim filed, if an individual works less than 4 weeks, and in each of those 4 weeks earns less than 20 times the state minimum hourly wage, the employer will not be charged.

South Carolina – The employer’s account is not charged if it paid the claimant less than 8 times the weekly benefit amount.

South Dakota – The employer’s account is not charged if it paid the claimant less than $100 during the base period or if the claimant was terminated due to inability during a 90-day pre-arranged probationary period.

Virginia – The employer’s account is not charged if the claimant was employed for less than 30 days, whether or not consecutive, or if the claimant worked less than 240 hours for the employer.

So, consider the best practice of making a probationary period a part of your company policy and refer to the probationary guidelines when reviewing new employees.   Be sure to review any changes to policy that you plan to make with your Unemployment Cost Management services provider to be sure your policy will meet the requirements in your state. 

Tammy Mullin