Why Don’t Employees Pay for Unemployment Insurance?

January 13, 2009 by  
Filed under Insurance, Taxes

Before you start calling me bad names, let me assure you that even Mr. ToughMoneyLove has sympathy for the unemployed.  I am so grateful that I am not one of them.  For any of you out there looking for a job in this awful economy, I truly hope you find one ASAP.  Just don’t assume that President Obama will dump one in your lap anytime soon.  (That’s a story for another day.)

On the other hand, I get tired of reading about Congress extending unemployment benefits yet again for the millions of unemployed.  And today the Conference Board predicted that another two million jobs could be lost in 2009.

It’s not that I don’t want the unemployed to have some income when they can’t find a job.  It’s that I’m not sure that the system we have in place to finance unemployment benefits is a good one.

First, a little review.  The unemployment insurance system is jointly operated by the state and federal governments.  It is financed by state and federal payroll taxes.  Under the Federal Unemployment Tax Act (FUTA), the federal tax rate is 6.2% of taxable wages applied to the first $7,000 of income.  Most of the federal payroll tax can be offset by state unemployment taxes, which vary from state to state, as do the benefits.  All of the state and federal unemployment insurance payroll taxes are paid by the employer.  This is the part that I question.

I am part owner of a small business and have some familiarity with the unemployment insurance system.  For one thing, the state payroll taxes in many states are experience rated.  This means that if an employer has an ex-employee claim and receive benefits, unemployment taxes go up.  This creates incentives for employers to fight unemployment claims made by employees who quit or who are fired because they do a lousy job or suffer from frequent bouts of the Napa Valley flu a/k/a recurrent hangover disease.  (Yes, we had one of those working for us for a while.)  The problem is that to fight a claim, you could end up having to appear in front of a state hearing officer or administrative law judge for a mini-trial, etc.  That’s usually more trouble than it’s worth.  I actually represented our business at one of those hearings.  Without going into detail about the testimony from the former employee, the word “fabrication” sticks prominently in my mind.

Now let’s say you are a small business in Massachusetts, which is relatively generous in its benefits.  (No surprise there – it’s the ancestral home of the Kennedy clan as well as dear Barney Frank.)  The unemployment tax rate in Massachusetts can go as high as 10.3% and the weekly benefit can be as much as $900 (if you have lots of dependent children).  I don’t know about you, but I could do OK for a while on $900/week tax deferred.  We have had a few employees go through the same analysis with not so generous benefits.  Quitting (or forcing a termination) and claiming unemployment is sort of like a mini-vacation to them.  You can tell when that happens because a new job suddenly materializes only when their unemployment benefits run out.   Meanwhile, our tax rate goes up.

So why don’t employees pay unemployment insurance premiums?  Is it fair that employers carry all of the risk even when some employees can obtain benefits by quitting or getting fired?  When employers are forced by economic conditions to reduce payroll, whose fault is that?  And when Congress decides to extend enemployment benefits (like it has been doing serially in recent months), we are all paying for that with our tax dollars because there are not enough employer-financed premiums in the system.

I think maybe we should treat unemployment insurance taxes like the Social Security payroll tax but with a twist.  Employers and employees each contribute, just as they do for Social Security.  That way, they share the risk.  The twist is that some of the unemployment payroll taxes are credited to the employee’s personal account.  If the employee and employer do well and no one loses their job, perhaps some of the unemployment insurance taxes can be invested and returned to the employee as an extra retirement benefit.  That creates a positive incentive for all employees to work hard and stay employed.

FUTA has been around since 1935.  The tax rates and wage base hae been tweaked but not much else has changed since then.  I’m not an actuary so I might be overlooking some critical factor in my analysis.  Maybe someone can explain to me why the present system of financing unemployment benefits is the only one that works.  Considering that the government designed the system to begin with, I doubt it. 

How about it readers?  Do you think change is needed?

Image credit:  Ayhan YILDIZ


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70 Responses to “Why Don’t Employees Pay for Unemployment Insurance?”
  1. Bret says:

    I would like to make a few points here. First of all you said that you could live on $900/wk tax free. While most people wouldn’t mind that at all, it is not tax free income. You have to pay taxes on it at the time you receive the benefits or at the end of the tax year. Secondly, if someone quits their job they do not qualify for unemployment so that “mini-vacation” is cut short by not having electricity or water when you don’t pay the bills. Lastly, you are speaking under the assumption that all unemployment is due to a lazy worker. Unemployment was created for a reason, to protect the financial well being of people when they are out of work for a limited amount of time. What happens when an employer fires a person because the company wasn’t smart with their own money and it’s time to downsize, or when the economy effects as many businesses as it is right now. Also, let’s not forget that many small business owners simply don’t report correct amounts or at all? It’s not an issue until down the road, and that hurts the rest of the pool. I’m not saying that it’s one side’s responsibility over the other. I’ve been a fan of your blog for a few months now and recommend it to others, but now and then you need to step back and look at both sides of the situation.

    PS – The items I touched on were based on the laws in my state, could be completely different elsewhere.

    • Ryan Irish says:

      I have a question can we sue the state and federal government levels to get out unemployment money back. I am sick of backing a horse that supports people not working and getting paid to do it. It is sickening that I pay my hard earned money to some person who is going to use what ever cash they get to buy 40′s, lottery tickets, cigarettes and dutch’s. If you collect a check you should be subjected to drug testing and should be forced to put what ever cash you have into savings. I’m a kid right of college paying student loans and bills like many other hard working American’s and I am fed up with bailing out the weathly and the poor. GIVE ME MY MONEY BACK. Hey write me an email I bet we can grow some legs with this.

      • lulz says:

        “I have a question can we sue the state and federal government levels to get out unemployment money back. I am sick of backing a horse that supports people not working and getting paid to do it. It is sickening that I pay my hard earned money to some person who is going to use what ever cash they get to buy 40’s, lottery tickets, cigarettes and dutch’s.”

        not sure if you know this, ui is not exclusively paid for by the federal gov’t. it is largely funded by ui taxes that are paid for by the business owners. the fed gov’t usually only gets involved for ui extensions (which are not common) or will *lend* money to the state if the state runs out of money (like what has recently happened in ohio, for example). so you can stop complaining about your “hard earned money” being thrown away to ui when, more than likely, next to none of your paycheck goes into supporting it.

        “If you collect a check you should be subjected to drug testing and should be forced to put what ever cash you have into savings.”

        ok, so who would actually fund the drug testing? do you want to anger the business owners even more than they already are by adding that cost to the ui tax they already pay? or perhaps you, the one who loves taxes so much, would like to be the one to support that? moving on, your savings account idea is just ludicrous. the whole point of ui is to indemnify an employee for monetary loss as a result of being *unjustly* discharged from a job, so how are they going to pay their bills if all their money is being put into savings? why don’t you put 100% of your income into a savings account for a few months straight and see how well you do.

        “I’m a kid right of college paying student loans and bills like many other hard working American’s and I am fed up with bailing out the weathly and the poor. GIVE ME MY MONEY BACK. Hey write me an email I bet we can grow some legs with this.”

        well, i think this answers any of our questions right here. “kid right out of college” typically equates to “wet behind the ears” and your post clearly demonstrates that. give you your money back? what happens to your whole argument the moment you realize that next to none of your money is being taken from you in the first place? and what’s this “bailing out” business? since when did ui become a “bail out”? no one is being bailed out of anything, college kid.

      • Solari says:

        You talk as if unemployment is free money that we get to fritter away..got news for ya Sparky I collect $275 a week..times that by two (btw I do pay taxes on that at the end of the year) then take out $400 for ins., $140 for elect (that’s after getting rid of my $400 to $600 a month central heat and air and installing three window air conditioners and three floor fans..did I mention I live in Fla.) let’s see groceries which varies because there are times I have $0 left after paying my bills not buying 40 lottery tickets! I did buy a $2 ticket with the last 8 quarters I had left, and I won $101 I bought food with that for my family..hmm $200 cell phone and internet..both I need to continue my job search, my gas bills varies as well depends on how much I have left after buying groceries and how much driving I do..car ins. is hmmm $150..car payment $60 a week…that does not count my credit card bills I can no longer pay..or my house payment and lot rent I have to borrow once a month..so tell me again Skippy, how I take advantage of the money owed to me by my employer for letting me go for no good reason except so he can further line his own pockets..tell me again how I should pay my own unemployment so the Gov. can turn around and take my money and force me to beg for it..who do you think gets that money not claimed by those still working…duh the Gov. walk a mile in my shoes before you open mouth and insert foot!

      • JT says:

        Now to reply to your ignorance. 1st it is my tax dollars that I have paid since 1994 that allowed you to borrow my to go to school. 2nd I have 22 credits left for my masters in clinical psychology and that is what I have been doing since my company closed may 09. To make a bblanket statment like this shows the errogance of todays youth. I paid over 35,000 a yr in taxes and I don’t deserve a 240 dollar check once a week, get real kid grow up make some real choices in life then come talk, right now it iis just out of your ass, good day

    • Karen Windsor says:

      People on UI don’t draw $900 a week. The max for most states is $400 (or a little over that). It equates to about $10 hr. Some states don’t even pay $200 a week. Now while the majority of the population is getting that amount of money for being “let go”, big corporations are handing over million dollar “golden parachutes” for guys that have screwed the corporation they worked for. Then, after the corporations pay off the lousy bums they turn around and ask the government to bail them out. Something is NOT RIGHT here.

  2. Melanie Reformed Spender says:

    Wow I had no idea that’s how it worked in the US. I have to admit, as an employee, my first thought is: “That would be sweet!”. In Canada, the employment insurance system is funded by employees.

  3. TMN says:

    Tying some contributions to the individual employee would be good. But the top-level claim of “why don’t employees pay the tax” is just nonsense. It’s the same cost to the employer per worker whether the amount gets reported on the employee salary statement or not.

    Unless you’re proposing that the government should halve the tax against companies and make up the difference with a tax on employees, and that companies WOULDN’T increase salaries to compensate. In which case, they could just decrease salaries by that amount right now and achieve the same end goal. Either you’re advocating decreasing salaries, or the money’s going to come from the corporation anyway. It’s just a question of whether it goes through the employee first, and I don’t see that it makes any difference at all.

  4. Bret: Thanks and good catch on the taxable income issue. My mistake – I should have clarified that you will likely owe taxes at the end of the year. Most states do not withhold taxes from benefit checks.

    Also, there are people who quit and claim benefits on the legal theory that they had “good cause” to quit. As lame as that sounds, it works in some states and many employers don’t bother to fight it.

    I did not mean to suggest that most people are unemployed because they are lazy. I’m just trying to find a better way to use the money and create beneficial incentives for both employees and employers.

    Melanie: Interesting difference in Canada. How much do employees pay?

    TMN: What I am advocating is shifting part of the burden of unemployment insurance to employees for two reasons: (1) to create disincentives to quit and claim benefits just to get a break from working (I know people who have done this) and (2) to create a supplemental savings/retirement plan for the employee using the premiums paid. There is no question it would have to be phased in slowly but why not? Unions do this by using mandatory dues to create a strike benefit fund. Same principle except that the unions never return the money if it isn’t used.

    • AuntInAZ says:

      I did not mean to suggest that most people are unemployed because they are lazy
      /\

      Really? That’s what it sounded like.

      The top unemployment in Arizona is $242 per week, and most people do not get that. Right now I get $157 a week after taxes, so yes I pay taxes on it as well. Many people do. Very few people are living it up on unemployment and I am getting more and more angry and more and more frustrated with the people who call me and other unemployed people lazy. Try losing your jobs and trying to find one in this economy. And right now it’s better than it was a few months ago and it’s still tough. Try dealing with the mentality of people who don’t want to hire uemployed people because they’re unemployed. Try dealing with all the BS and garbage while you’re being kicked in the teeth by people who call you lazy and accuse you of living off their money.

      Whether employees pay into the system themselves or not, in the USA to collect unemployment you have to have worked.

      And another thing, you’re wrong about companies not bothering to fight when employees claim unemployment. I had an employer lay me off from a job and then try to claim I quit without cause. Not only did I not quit without cause, I didn’t quit at all. It took me six months, but I won. Me with no money, no lawyer, no nothing actually won against a big company with their lawyers and their lies.

  5. TMN says:

    Okay… but I’m saying the burden is already entirely on the employees. Unemployment tax is part of the cost of employing someone. If that cost is too high, no job for them, because you can be damn sure no company will employ someone unless they can generate more money than they cost.

    So of an employee’s entire cost to a company, there’s salary, and there’s costs and taxes that are unseen by the employee. It sounds like what you’re proposing is to remove some of the taxes from the company and impose them on the employee instead. There are two ways a company can react to this:

    -raise salaries to compensate (cost of employment stays the same, effective salary after taxes stays the same)
    -leave salaries where they are (cost of employment goes down, effective salary after taxes goes down)

    In the first case, it seems to make no actual difference since the company has the same cost. Sure, you have more in your salary, but it’s immediately taken away in taxes. In the second case, you’re basically talking about a salary cut across the board, except you’re hiding it by shuffling taxes around.

  6. TMN: The argument you make can be applied to any employee benefit, including pension costs and health insurance. But that’s not how most employees look at it. If you suddenly told employees that they had to pay 100% of their own health insurance but that their salary would increase to pay for it, most would still be upset. We’ve seen this with HSA accounts – even though we fund the high deductible, the employees freak out because more of the risk is placed on them. They don’t like being asked to be a wise consumer of health services. Also, if the employee bears some of the risk of being unemployed then chooses to use the benefit, their premium goes up, just as it can with other types of risk insurance. If they don’t use the benefit, a part of the premium they paid is returned to them in retirement, plus investment earnings. What’s wrong with that?

  7. TMN says:

    The problem is I can’t tell whether you’re advocating for or against raising salaries to compensate (the 1st scenario in my earlier reply). If you’re for it, then I’m tentatively with you. In general I’m against hiding employee compensation in employer taxes, because like you said, some people don’t think about it.

    Another problem in actually implementing this, though, is to get employers to follow through on raising salaries commensurate with the decrease in taxes. I strongly suspect many of them would try to hold back on it as a cost saving measure, ending up with employees getting less when they were supposed to get the same but with more transparency.

  8. TMN says:

    Further, I still don’t like the initial claim that “employers pay this tax”. In a very real sense the cost DOES come out of employee salary (well, salary + benefits + costs, assuming these equal a set value when one changes). Just because it’s hidden when the monthly checks get cut doesn’t mean they aren’t paying it.

    If you’re just advocating for more transparency in these costs that makes sense, but that didn’t seem to be the intent of the original article.

  9. Brad Ford says:

    Like all costs of labor, the unemployment tax really comes out of the employee’s pocket. If the employer didn’t have to pay it, they could pay employees more.

    Under the current plan, employers who constantly lay off workers pay higher taxes. Employers who only fire workers “for cause” pay lower taxes.

    • RP3 says:

      Actually, all unemployment insurance is paid the the employER, not the employee. If the employer didn’t have to pay the unemployment insurance maybe they would pay the employee more, maybe they wouldn’t. It is a pervasive misconception that unemployment insurance is paid by the employee. If you really think about it – the unemployment insurance money never goes to the employee, it never has any chance of going to the employee; it simply goes from the employer’s bank account to the state and/or fed bank account.

      • Selene Sweck says:

        I am a small business owner and as with any business owner am taxed beyond believe. There are only 3 states where employees pay a portion of their unemployment insurance, my state is not one of the lucky 3. I live in a very liberal New England state run mostly by people who have never worked in the private industry or have ever run a business. They truly are monolopy money people and textbook idealogues. Not only are taxes higher but utilities, insurance, etc. etc.for businesses. We are even taxed $250.00 yearly just for the privilege of owning a business and having a corporation, regardless of income. This year I have given most of my employees raises which has caused all my taxes to increase as well as workmens compensation insurance as it is based on your payroll amount as is unemployment insurance. As an employer, we are taxed regardless of the lack of claims. If we happen to have a claim our rates go up for years. We are quickly becoming inundated with regulations, taxes and bureaucratic nonsense which defies common sense and will stiffle creativity and promote dishonesty (ways to fight the system).
        On the employee system, there are many who find themselves unemployed through no fault of their own. I recently held a job open for a pregnant young woman but now realize she will not be back due to the fact that she can get all kinds of state and federal benefits to stay home. Insurance, food, housing, etc. In this state it would amount to over 50K, why work? Unfortunately, what was intended to be a safety net has become a paycheck that can not be matched by small business employers. The result is that more and more small businesses, the backbone of this country, are going out of business. The huge corporations continue to receive tax breaks under this administratio, obama care exemptions, etc. Now even Hollywood producers and company are getting huge tax breaks, etc. Corruption is not even a strong enough word to describe what is happening.

  10. vilkri says:

    A little too much tough love here. When you say, “That creates a positive incentive for all employees to work hard and stay employed.” you assume that people don’t have much of an incentive to stay employed under the current system. I beg to differ. The very large majority of Americans want a job and earn an honest living. They don’t want to sit around in an idle manner. Maybe you know a different group of people, but I am pretty sure that at least 95% of the people I know fall into the always-willing-to-work group.

    • Brittney Smith says:

      I live in a small town and in my small circle of people every single one that I have known milk the unemployment until it is about to expire and then look for work. Some have quit jobs and are still eligible for unemployment. One in particular lost her job but never looked for replacement work. With the extension she is planning on staying with unemployment until her social security kicks in. My children are both in college (which we pay 100%) and found work for the summer. There are jobs available and I personally think that if the unemployment benefits weren’t so sweet people would take whatever was available until the right job opened for them. In New York the rate is $480 per week and in Vermont it is over $700. I think these numbers are the high end.
      Of course there are people who are not working the system. I just swear to you everyone that I have ever known milked it. There are 10 people that I think of right off the top. It is very frustrating for my husband and me who both work very hard to see friends and some family living off the system. Off course you don’t get rich living off the system but when you see what I have it feels frustrating.

  11. TStrump says:

    I was talking with a friend in Jersey and he explained the Unemployment System in the US and I was a bit shocked.
    Seems a bit onerous on employers.
    Here in Canada, every employer pays the same, and while they do have to match premiums, it’s not experience rated.

  12. Melanie Reformed Spender says:

    Employees pay 1.73% to a yearly max of 711.03. I wasn’t aware that employers paid at all (I’m ashamed to say) but I did a search to come up with the numbers and it turns out that they pay 1.4 times what we do.

  13. chris says:

    As an employer, I’ve gotten to see the other side of the unemployment issue. I have an employee who calls in sick chronically, does a lousy job, complains, is disrespectful AND has repeatedly said “just let me go so I can collect unemployment”. Why should this person be entitled to a handout from me?? We live in a semi-communist society.

    • Brittney Smith says:

      We had the same thing happen at our office. She just stopped working while she was at work and said to everyone that she was going to do whatever it took to get fired so that she could collect unemployment and go back to school to be a nurse. She got it! Unbelievable. Of course, she did not go to school but she did stay home, get pregnant and collect unemployment.

      • Cindy T says:

        Well, in both of those instances the employers should have gone to the UC hearing and showed the proof of the reason for dismissal and no benefits would have been paid. You cannot be going to school, or off having a baby and collect. One of the questions asked is “were you ready, willing and able to work” ~ if you were not then you have committed fraud. There are always a few bad apples but that doesn’t spoil the whole bunch! I have worked all my life and usually held down several jobs at a time, and I am currently unemployed. I pound the pavement every single day for work. I am making half of what I made to work, I will owe a considerable income tax at the end of the year, I am 51 and am not paying into my social security or pension that I will be needing before you know it, and I WANT TO WORK!!!! So please don’t just group everyone together and say that the unemployed don’t want to work!

  14. TMN says:

    Chris: have you been documenting these cases? Typically if an employee is incompetent and violating company policies, which seems to apply in your case, their claim for unemployment benefits will be rejected. As long as you have documentation on these problems you’re likely to win in any dispute.

    Don’t just take his word for it when he asks you to fire him. And don’t complain about the laws in this country when you appear to not understand them in the first place.

  15. Melanie Reformed Spender says:

    @Chris: Can’t you just fire him? Does unemployment insurance in the US extend to being fired?

    Ah, I just read the comment above. Apparently, it’s the same in the US. In Canada, there is a box in the Record of Employment for “reason for leaving”. If you fill in “fired” then presto: No unemployment for your deadbeat employee. As TMN says, though, be sure to have good documentation, in case he tries to sue for wrongful termination (Some people will work really hard at trying to find a way to avoid work.)

  16. MasterPo says:

    Don’t forget the “stealth layoff”, made popular by Computer Associates and emmulated by many.

    That’s where an employee is called into HR out of the blue, given a poor review and summarily dismissed for poor work. But now they are dismissed for cause so they don’t qualify for UEI.

    Gotta love it.

  17. Brenda says:

    I agree that some employees want to get fired because they would rather draw unemployment. I have had more than my share. I even live in a free will state where laws say I can fire someone for no reason at all. But, they can file for unemployment so I don’t quite understand the reason for the “free will” part if they can file. I still have to fight it if they file for unemployment. I still have to document everything and wait and fire for good reasons or they can file unemployment and I have to pay. It’s not a fair system because some employees know how to work the system and just want to “draw.”

    • K. White says:

      This is true to a point but alot of companies seem to go out of their way to underpay their employees which makes these deadbeats not want to work or perform at a poor level. You get what you pay for!

  18. Mike says:

    In addition to not being able to receive $900 a week unemployment compensation in Massachusetts it also IS NOT TAX FREE and is taxed as income, which makes little sense. Again, please check your facts before posting. Thanks.

    Mike

  19. Scott says:

    MR. Toughlove,

    I work for a staffing firm in NYC. We just went to court to contest giving unemployment benefits to a temp who showed up late often and was let go even though others at the client firm kept their jobs. We even have a database that logs in this information on lateness. The judgement came in today after the court hearing where we had to show up but the temp, living several states away (who called in on the phone at the hearing) and the temp won. He lied to the judge that we never warned him of his lateness (its in our database when he was called). Even with good evidence against a claim, NY always seems to side with the temp. The judge’s reason for siding with the temp is that there were layoffs. As I said, others kept their jobs at this firm. Why would a business move to NY when the deck is always stacked against them????? Remember this when NYC ends up having no tax base since all the businesses move out.

    • AuntInAZ says:

      Well tell them to come to Arizona, it’s next to impossible to win a case against an employer here. The judges may agree with the employee on one point and then slam them on another they didn’t even know was part of their case in the first place. That’s why it’s a near miracle that I actually won even though it took six months to do it.

  20. There are three states where employees pay into UI directly. I’m researching the subject at the moment, so I haven’t found them, but if you go to the Employer Information on UC Law page, Unemployment Compensation section of http://www.dol.gov, you’ll see that it notes 3 states that have it right – employees pay in the same way we independent contractors pay in for ourselves.

    I found the page doing research on my state’s rules (Florida). The page address is: http://dot.myflorida.com/dor/uc/GT-800058.html#what_Taxes >> Employer Information on UC Law.

    Great article, by the way. I write on your subject (Careers & Workplace Issues) for the Examiner.com, Jacksonville, FL, edition. My pieces are a bit more national than local, though.

    Keep writing! I love what you have.

    d.

  21. Jack says:

    I searched this question and found this thread. As a small business owner I believe that an employee should pay for the unemployment insurance, after all it benefits them and only them. I do understand that there are alot of bad businesses that may treat employees bad, I don’t believe that argument substantiates why an employer should be forced by law to provide and pay 100% of unemployment insurance and than be penalized when an employee collects.
    Unemployment insurance in which the state and federal government force employers to pay is simply another entitlement that is abused by most. I have had many employees who I know worked and performed their duties great up until the time they were sure their unemployment benefits were available and than let their performance slide in order to get terminated. Even terminated, they have a slight time period penalty before getting their benefits.
    I am a good employer. I take care of all my people by offering above average wages and paid benefits including 100% paid health. I could afford to employ more people if the government would get out of the way and stop stealing from my business. One way is if employees were responsible for paying for their own unemployment insurance.

    One last thought. there are alot of people who work hard, are responsible and consistently do the right thing but there are also many people who don’t want to work, are lazy and only interested in what others will give them, namely the local, state and federal government. I think it is time that the government stop penalizing us for working hard and doing the right thing and stop rewarding those who choose unemployment and laziness as a way of life with entitlement we must pay for. Thanks for letting me speak my mind. jack

    • AuntInAZ says:

      Unemployment insurance in which the state and federal government force employers to pay is simply another entitlement that is abused by most.
      /\

      ‘Most’? This is the kind of statement that makes me see red.

      /\
      One last thought. there are alot of people who work hard, are responsible and consistently do the right thing
      /\

      And a lot of the unemployed fall into that category as well.

  22. Karen Windsor says:

    I have worked my entire life – from the age of 15 until March 2008 when I was laid off. I haven’t EVER drawn UI until now. I am 52 years old – so I have been working for a while. I am SICK of hearing people say that, “Anyone that wants a job can have one – they just aren’t trying.” Let’s see how THAT story changes when they become unemployed. I would GLADLY give up my UI check for a JOB! I have always done the “right” thing. I didn’t get a bailout like AIG, auto manufacturers, banks, etc. They were all living the high life and really don’t give a shit about anyone or anything – except their big bonuses (THAT WERE NOT DESERVED IN THE FIRST PLACE). AND if I were not receiving the UI checks bi-weekly I would be filing bankruptcy – thus, more debt dumped on creditors that would want a or another bailout. I have (soon to be had…) excellent credit and have always paid my bills on time. Not everyone wants to sit on their ass every day and watch tv.

  23. Jack says:

    Karen,
    I understand completely, your point. However, my point is that employees should have to pay for unemployment insurance. Lets take you for example. You’ve worked hard all your life and now find yourself in need of unemployment benefits.
    I believe someone like you having paid for the insurance for so long should be able to collect without for as long as it takes until you find another job to your satisfaction. What I believe is that the unemployment benefits should be relative to the time spent paying into it.
    My experience and I believe alot of other business owners has been that alot of people are very familiar with how the system works and they take advantage of it. Many work long enough to build up benefits and than work it so they get laid off or fired so they can collect for a bit of a vacation. Even if they get penalized for getting fired, it is only a brief time period.
    Further more, when they collect, the unemployment insurance premium for the business owner increases.
    My point is that the insurance benefits the employee not the employer, so the employee should pay for it!
    As for AIG and the banks. There is no business failure insurance that I can purchase. I f i run my business to the ground and make bad decisions, I lose everything. I get no bailout and I shouldn’t, neither should they!
    Failure should never be rewarded!
    Government systems and entitlements if they are necessary, should benefit those like yourself who have worked hard and done the right thing all their lives. Unfortunately, they don’t!
    Best wishes and good luck to you! Jack

    • Karen Windsor says:

      I totally agree with you that employees should pay their part AND I believe that the employers should be able to draw UI just like everyone else. The only problem about the individual account is this: It would end up like social security – where the government has already taken your money and used it for someone or something else (and then usually wants to raise taxes to replace the money they have used). It is extremely disappointing to me, however, that so many of the companies that I worked for in the past have gone “belly up.” That also makes it difficult for any potential new employers to check my references. I honestly feel like someone has flipped a switch and decided that I can’t work anymore. I feel that I will never live the “middle-class” lifestyle that I once had. I have absolutely nothing!

  24. lul says:

    ui is not a scam and it is certainly not a “benefit”. ui claimants whom refer to it as a benefit are just using the colloquialized terminology. opponents of ui use the term in order to propagate its meaning to infamy so they can use it to perpetually call out the system for its corruptness. news flash: there is no perfect system. there are always those whom find work-arounds for any system and justice isn’t always served. if you opened your business thinking you could have it your way and your way only then you’re sadly mistaken. everything has its ugly side, and ui is one of the many ugly sides of owning a business. deal with it.

    ui is designed to protect employees from terminations deemed unjust in connection with work. you hired me under a set of pretenses, the main pretense being that i perform the tasks required as stated by the written job requirements you presented to me. now understand the facts: you can fire anyone you want for any *lawful* reason you want, but if i perform my duties as stated and you terminate my employment because you can no longer afford to pay me or simply because you don’t like the color of my slacks, you are liable for paying my ui until i can find new work.

    now we come to those awful freeloaders whom live for nothing more than to sap the system dry. you can’t expect infallible protection from these people. they do exist and will be a tumor on our society for as long as we have a society. the only one who can protect themselves from these wastes of life is YOU. you can start by avoiding making irresponsible business decisions that will result in you needlessly having to jettison an employee into the murky waters of unemployment. develop a foundation of iron-clad company regulations that must be followed. issue written warnings and write-ups your problem employees and make sure a WITNESS is always present in the event of a hearing.

    just because you are the business owner does not mean you are in complete control. i know you wish it were that way, but it is not. therefore, you have one of two choices: sell your business and work for the man just like the rest of us OR operate your entire business yourself without ANY employees and alleviate yourself of 100% of the risk. what? you need employees in order for your business to function? well, then, looks like you better start putting together the aforementioned “iron-clad” set of regulations. otherwise, see you at the hearing!

    • J says:

      You sound like one of those people WHOM hates businesses and WHOM hates working for the man yourself. Try running your own business and you might have some sympathy for those WHOM have actually done so. Or maybe you have? I can’t tell what your stance is or where you’re going with this.

      First you say, “avoid making irresponsible business decisions that will result in you needlessly having to jettison an employee into the murky waters of unemployment…develop a foundation of iron-clad company regulations…etc.” Then you say “just because you are the business owner does not mean you are in complete control.” Sounds like a contradiction to me. Is it because you’re indecisive that you seem so worked up?

      who = nominative
      whom = objective

      • lul says:

        hey, thanks for the who/whom lesson! it’s one of those grammer rules that’s been snagging me throughout my whole life. i’m usually the first guy to call someone out for not knowing the difference between your/you’re, there/their/they’re, and then/than, but that pesky who/whom trips me up every time!

        “You sound like one of those people WHOM hates businesses and WHOM hates working for the man yourself. Try running your own business and you might have some sympathy for those WHOM have actually done so. Or maybe you have? I can’t tell what your stance is or where you’re going with this.”

        i don’t know where you got this idea. i have zero problems with businesses/business owners or being an employee myself. in fact, if you read my other posts, you will see that i actually give business owners advice on how to properly terminate employees in such a way that presents the least amount of risk for a ui payout. in spite of that, however, i will add that i don’t have sympathy for the struggles business owners go through, especially with respect to ui. no body of authority appoints a person to become the owner of a business against their will. owning a business is 100% voluntary, comes with responsibility, and risks are always present. one who does not set the proper expectation as to what being a business owner entails deserves no sympathy when poor or inexperienced business planning comes back around to take a bite out of their backside.

        “First you say, “avoid making irresponsible business decisions that will result in you needlessly having to jettison an employee into the murky waters of unemployment…develop a foundation of iron-clad company regulations…etc.” Then you say “just because you are the business owner does not mean you are in complete control.” Sounds like a contradiction to me.”

        would you care to illustrate how the second sentence contradicts the first or vice-versa?

        “Is it because you’re indecisive that you seem so worked up?”

        the only person who seems worked up here is you. your digressive who/whom tangent is certainly indicative of this.

        • J says:

          I’m not worked up, and I’m sorry that I thought you were. I just got that impression because your post seemed hurried (the who/whom thing, no capital letters) and it seemed like you were bashing both sides. I misread your tone, but that’s what it seemed like. I agree that owning a business is voluntary, risky, and a huge responsibility, and that one should not take it on if unprepared. But most employees have no idea how much easier it usually is to be on the employee side of the business. I think good employers deserve more recognition than they’re usually given.

          As for the contradictory statement, here’s what I meant: “avoid making irresponsible business decisions that will result in you needlessly having to jettison an employee into the murky waters of unemployment…develop a foundation of iron-clad company regulations…etc” sounds like there is never an excuse or reason to have to terminate an employee, unless you’ve been irresponsible. By further stating that “just because you are the business owner does not mean you are in complete control”, you admit that some things may not be completely within your control, so a situation could arise where you may have to let an employee go even though you have been responsible.

          I apologize for the who/whom comment. I was being sarcastic, but I meant no malice.

          • lul says:

            “I’m not worked up, and I’m sorry that I thought you were. I just got that impression because your post seemed hurried (the who/whom thing, no capital letters) and it seemed like you were bashing both sides. I misread your tone, but that’s what it seemed like.”

            it’s all good then. i never use proper caps in informal internet communications, but i do try my best to adhere to proper grammar protocol.

            “I agree that owning a business is voluntary, risky, and a huge responsibility, and that one should not take it on if unprepared. But most employees have no idea how much easier it usually is to be on the employee side of the business. I think good employers deserve more recognition than they’re usually given.”

            i totally agree that it’s a much simpler life on the employee’s side of the fence. all we have to do is go to work and process a W2 at the end of the year. however, it’s a person’s choice to start a business. that, in and of itself, in my opinion, isn’t enough to warrant any additional respect and/or recognition. we all make choices and deserve no special pat on the back for them.

            “As for the contradictory statement, here’s what I meant: “avoid making irresponsible business decisions that will result in you needlessly having to jettison an employee into the murky waters of unemployment…develop a foundation of iron-clad company regulations…etc” sounds like there is never an excuse or reason to have to terminate an employee, unless you’ve been irresponsible. By further stating that “just because you are the business owner does not mean you are in complete control”, you admit that some things may not be completely within your control, so a situation could arise where you may have to let an employee go even though you have been responsible.”

            when i said “just because you are the business owner does not mean you are in complete control”, i was addressing how business owners don’t have total reign over the determination process. this means they can’t fire an employee for wearing pink socks and not be accountable for their actions, hence they are not in “complete control”.

            however, when i said “avoid making irresponsible business decisions that will result in you needlessly having to jettison an employee into the murky waters of unemployment” and blah blah, i never even addressed the issue of control. all i did was offer my own brand of advice on how to tighten up your company policy to reduce the risk of being on the hook for ui compensation. i never presented it with any guarantees. it was just advice that many small-time business owners need to heed.

  25. christy says:

    I’m not sure who should pay but every working person should be allowed benefits if they are unemployed and actively seeking employment . I’ve never collected unemployment but after being out full-time work for 6+ months, i had to apply. Well my previous employer didn’t pay unemployment tax so i cannot collect benefits. It sucks.

  26. Jack says:

    lul,
    I must say that I agree with you and you help to make my point.

    “ui is designed to protect employees from terminations deemed unjust in connection with work.”

    I know and understand why UI was created and designed to do. My point is that as you state, it is designed to protect the employee!! So my point is that the employee should cover the cost. We as a society buy insurance and in alot of cases are forced to buy insurance on a whole variety of things, i.e., car, home, life etc.We buy theses insurance plans to protect us.We benefit from the money we spend because it protects us!

    UI is an insurance plan that we as employers are forced to buy on behalf of the employee and when that employee collects our rates go up costing company’s more and more.
    Also, here in Maryland, the unemployment division very rarely decides in favor of the employer no matter how well your documentation is.

    I will state once again that I believe that UI has a purpose and that purpose is to protect employees and therefore, the cost should be absorbed by the employee by way of a state deduction from there paycheck with the cost being relative to the amount of times they have collected over the course of their time in the workforce. A good example would be Karen. She has worked many years and never collected so her cost would be very low and she would be entitled to a longer length of benefits where someone who collects often who had a bad work history would have to pay more.
    Jack

  27. Kael says:

    Hi TML,
    One of my employees advised me that they want to “Move on” from her job. She says she wants to take a job in May but will stay at the job as long as we need her. We don’t “need” her because we have WIKI procedures to train employees. We hired her at a time when the economy was better but now we can get an employee to do the same job for less money. We keep her working because she hadn’t not done anything to get fired. She asked us to fire her so that she can get unemployment. My partner is considering it because he wants to fire her anyway because of the salary. However, I am concerned that our UI rates will go up if this happens and I don’t think it is fair for her to put us in this position. If she wants to quit she should quit without mooching off of us. If she wanted to get fired, she would do something to get fired which wouldn’t qualify her for UI. Please help my sap of a husband with your knowledge.
    Thanks

    • lul says:

      i find your ethics to be somewhat deplorable. you’re essentially saying this: “we hired her when the job market was steady and fruitful. now that the job market sucks and people are desperate for work, we can exploit their strife by offering them a lower salary since we know they can’t afford to turn it down!”

      then you have the gall to say this:

      “I don’t think it is fair for her to put us in this position”

      it seems to me that you have a double standard when it comes to what’s fair. you are willing to low-ball the salaries of desperate working-class citizens in order to save a buck, yet an employee who works for you is being unfair by not quitting?

      so it’s obvious that the current economic condition has created an advantage for you, but you don’t have any constitutional rights to capitalize on it. that said, you need to stop pointing the blame elsewhere and focus moving forward with the situation at hand. first and foremost, you need to realize that it was your company’s decision to hire her. the fact that you don’t need her now does not entitle you to a bailout that grants an accountability-free license to terminate her employment without just cause. second, you need to drop any grievances you have with hiring her at higher salary pre-recession than what the average joe will work for post-recession. there’s always someone willing to work for less. that’s just business life. no insurance policy exists to cover you for financial hardship every time you fail to pull the lowest bidder from the crowd of job-hungry people. lastly, so what if she wants you to fire her? is she doing her job properly while she’s there? is she coming in to work on time? if so, pay her and stop complaining that things aren’t going your way bcuz, lady, in life, hardly anything goes your way.

  28. lul says:

    “We as a society buy insurance and in alot of cases are forced to buy insurance on a whole variety of things, i.e., car, home, life etc.We buy theses insurance plans to protect us.We benefit from the money we spend because it protects us!”

    you’re trying too hard to compare ui to other forms of insurance. the purpose of the insurances you mentioned is to protect the insured from unexpected and uncoordinated disasters that result in monetary losses (“loss” is a key word here, as well as “arbitrary” which i will use later). there is no appointed, deciding body behind a natural disater or a death of a person, nor is there anything whatsoever arbitrary in nature to any of the losses covered by any of those insurance policies. this is unlike employment, however, where the owner of the business is the only entity ultimately responsible for and capable of the arbitrary termination of an employee against their will. comparing ui to other forms of insurance by virtue of the fact that “it protects the individual” is just fallacious.

    this is why i think ui should be paid for by the business owners. you hired me. you fired me. therefore, you are the direct cause of any monetary losses that resulted from my terminated employment. this is not comparable to some random earthquake that destroys my house or heart attack that causes me to keel over and die. that said, it doesn’t make sense that i should have to buy an insurance policy that will compensate me for monetary losses in the event that you make the arbitrary decision to terminate my employment for unjust cause in connection with work.

  29. Nancy Jones says:

    If employers had no stake in unemployment, they would be much more likely to mass lay off “uppity” workers who were demanding silly things like decent treatment or safer working conditions. If you read about the big monopolies of the 19th century, a work shutdown (which in this projected situation would force employees to live on the benefits THEY had paid in, and had no financial downside for the employer) would be all it would take to keep ‘em hungry, quiet and subservient to the whims of the employer. You may be a good employer, but as someone who has worked with employers for years, collecting those taxes, I can honestly say that most small employers feel that people really should work for them for free, as it will surely be when we all get to heaven!

    • lul says:

      i agree wholeheartedly. if the employees were to fund ui, the employer would have zero interest in contesting the claim, nor an interest in using sound judgment when it comes to discharging an employee. why would they have any such interests when it would be the employee’s rate that would be subject to the increase? this means you would be able to screw your employees over even more! develop a conflict of interest with an employee and fire them for wearing pink socks! then sit back with a smug smile as you imagine the sour expression on their face when they see that their ui rate has increased. take that, employee!

      so i think it’s reasonable to say that ui maintains balance. bcuz of ui, an employer now thinks twice before discharging employees for frivolous reasons. this just wouldn’t work if the employees were to fund ui. after all, how much sense does it make for an employee to say, “i better think twice before getting fired for no legitimate reason whatsoever!”

  30. Michael S says:

    I think it is laughable that we consider this to be anywhere NEAR a “free” country. So let me get this straight…

    1. I hire someone to do a job
    2. I no longer need them
    3. I still have to pay for them until they find a new job

    Are you serious? Why are we SO interested in babying people? If I want money…I work for it. That is how an economy is supposed to operate. Why do we continue to have to take care of everybody. Oh, you lost your job? BOO HOO. Go find another one. Oh, that inconveniences you too much? WAHHHH.

    I am so sick and tired of everyone’s constant need to take care of everybody. Why is it my job or duty to take care of someone who DOESN’T take care of themselves?

    Yes, it is sad when someone doesn’t plan for their future…but why do I have to pay for it? I saved my money instead of blowing every single paycheck…when are people going to be held accountable for their own financial well being? The answer is NEVER. Not as long as we live in this country anyway.

    I guess I’ll just keep paying my hard earned money to the government. It is RIDICULOUS how much tax money the government extorts from small business. Yet I still pay it because I like being able to eat. And I have saved money in case I need it, should I ever need to close or go find another job. Why is it my responsibility to pay for someone who wasn’t smart enough to save money?

    I hate this.

    • lul says:

      “1. I hire someone to do a job
      2. I no longer need them
      3. I still have to pay for them until they find a new job”

      I like point #2 up there that says “I no longer need them”. It sounds to me like you need to start hiring temporary workers or contractors if you find yourself suddenly not needing your employees. This way you wouldn’t be on the hook for UI since they agreed that their contract was short term.

      “Yes, it is sad when someone doesn’t plan for their future…but why do I have to pay for it? I saved my money instead of blowing every single paycheck…when are people going to be held accountable for their own financial well being? The answer is NEVER. Not as long as we live in this country anyway.

      I like how you’re all like “they need to plan for their future and SAVE MONEY”. It looks like you need to follow your own advice. Do you hire just any employee who needs a job without first asking yourself if you can afford them?

      Overall, you’re forgetting one important thing here: You hired your employee under a set of precepts to which you both agreed. If they neglected their duties and you have sufficient proof then you are not on the hook for UI. However, if you decide to arbitrarily abandon the agreement with your employee and fire them willy nilly without just cause because “you don’t need them anymore” then you have to face accountability for that.

      So it seems that you’re pretty bitter. Since the employees have it so easy, why don’t you just sell your business and work for the man like all the other stiffs in America? Yes, why don’t you try that?

  31. Just to double check, do employees not pay for ANY unemployment insurance?

    • lul says:

      I hear in some states that they contribute to it. There’s also the chance that we all contribute to it via higher costs charged by businesses who pay out too much UI tax because they can’t stop firing employees without just cause in connection with work. Of course, those businesses will find themselves struggling against their competitors who enforce ironclad company guidelines and find themselves rarely on the hook for UI since they properly know how to cover their arses.

  32. Bronwyn says:

    All I know is, my husband just came home and told me that his UI just jumped to $4500 a quarter. He owns a single pizza shop in a small town.

    We could lose our house and be forced into bankruptcy over this. Over a bunch of knuckle-head no-call no-shows, thieves, and liars.

    Yes, let’s cry over the poor unemployed while actual, hardworking producers – people who work hard so others have jobs too, are driven into the ground.

    I agree with the original post. The burden of UI should not lie entirely on the employer’s shoulders, and for the love of pete, UI benefits should not be indefinite. I’m just one person, and I’m aware of at least half a dozen people who milk UI for all it’s worth, and have no intention of finding a job.

    • AuntInAZ says:

      We could lose our house and be forced into bankruptcy over this. Over a bunch of knuckle-head no-call no-shows, thieves, and liars.
      /\

      With an attitude like this, who the hell would want to work for you in the first place? If this is an example of how you treat your employees I’m surprised you are able to keep any of them.

  33. lul says:

    Bronwyn says: “We could lose our house and be forced into bankruptcy over this. Over a bunch of knuckle-head no-call no-shows, thieves, and liars.”

    There are at least two ways to interpret this:

    1) Your UI went up because your husband fired an employee for not showing up for work and not calling, stealing from his company, and/or lying.

    2) Your husband didn’t fire anyone and you’re just looking for someone to blame for the sudden and seemingly unprovoked increase in his UI rate.

    Either way, it doesn’t make any sense to blame no call/no show employees, thieves, and liars on his rate increase. Such offenders have next to no case to begin with and yield the least amount risk of a UI claim payout. Here’s why I believe so:

    No call/no show: If an employee doesn’t call in and doesn’t ever show back up to work, it is assumed they quit and do not qualify for UI. For repeat offenders, there’s no case for the employee if the employer has been properly documenting the occurrences. Otherwise, there’s no proof that the employee has been skipping work and, as a result, the employer has no case. You’ve got to document to save your arse.

    Thieves: If an employee is stealing from the company, they probably won’t have a case to begin with. Unless they’re repeat offenders, pocketing a few office pens and Post-It notes probably won’t cause an employee to lose a case all by itself. After all, I’ve put many pens and Post-It notes in my pocket and went home with them without thinking about it. Serious offenses such a embezzlement, however, constitute as a form of fraud. If an employee is conducting intentional acts of theft of company property or money and it can be proven, the employee has no case. No case means no UI payout. No UI payout means no rate increase.

    Liars: You can hardly ever *prove* an employee is lying since one’s interpretation of the truth can be largely subjective. Therefore, firing an employee for not telling the truth is a risky move that could easily leave you on the losing end of a UI case. If you want to fire an employee for lying, base the termination on the objective damage that the company has suffered as a result of their lying.

    So using any of the above as the cause for a business owner’s UI rate to go up is simply fallacious. Employees are granted UI compensation only if their termination was deemed “without just cause in connection with work”. So if an employer loses a case, it’s *typically* their own fault due to either 1) frivolous terminations (e.g., firing them because they smell funny) or 2) lack of evidence to prove the employee was truly negligent (e.g., no documentation to prove you’ve warned them several times about coming in late).

    I am willing to bet that the reason why your husband’s UI rate went up is due to the recession. Lots of businesses are laying off employees these days. Additionally, many companies are shipping jobs overseas. What’s left are irresponsible/inexperienced business owners who can’t afford the employees they hired or who fired them simply because they don’t need them anymore.

    Personally, I am tired of business owners complaining about how unfair their life is. As I’ve stated numerous times, you don’t *have* to start a business. If you don’t like being subject to the hardships of owning your own business, sell your business and work for the man like the rest of us.

    • Karen Windsor says:

      Thank you lul…. you would think that employers are the “angels” of the world and all of those no-count employees are the “demons.” You know something? If I ever get in the position of being an employer I will show much more respect towards people that work for me. I would hope that I could bring out the best in my employees. I know that it would be a perfect world if they were happy and they made me happy because they worked so hard for my company. It is amazing to me that MOST employers feel that they are the only ones doing anything for their companies. (Hummm – how many people have actually lost their lives over trying to do something their bosses wanted them to do)? I know people that would do just about anything their employers asked them to do, including myself – when I was employed. I was laid off in March 2008 and still haven’t found a job. I have been working 36 of the past 38 years and this is the first time I’ve ever drawn UI. The UI doesn’t last forever and it isn’t anywhere near the amount of money that people need to have to survive. It is also taxed – which makes the amount even lower. While you employers think everyone is just on a big vacation – people that are actually drawing it are depressed, anxiety stricken and wondering how they are going to get their lives back on track. It is not from lack of effort that people are still unemployed. THERE ARE NO JOBS. So – how about this? Hire some people and lets get the economy rolling and QUIT BLAMING EVERYONE ELSE FOR YOUR WOES. I accept the fact that I am unemployed, however, I am not lazy, thieving or any of the other descriptives given by many of the employers blowing off steam about their UI taxes. I’m sorry they’ve raised your taxes and IF YOU WILL HIRE ME OR ONE OF MY FELLOW UNEMPLOYED WE WILL MAKE YOUR COMPANY AS PRODUCTIVE AND SUCCESSFUL AS WE CAN – BECAUSE YOUR SUCCESS IS OUR SUCCESS TOO!!!!

  34. Greg says:

    Surprisingly most employers with companies out there do not know how unemployment works, and do not understand it a lot of time even when explained to them. Shaw Investigation & Research has worked for many companies since 1971 and I know in that time one company has saved over 300 million in taxes. The trick as a company owner is training managers and employees with this training a company can keep their tax rate at the lowest possible rate.

    • lul says:

      Exactly. Employers think the term “just cause” means “any decision I make as the owner of MY business”. Then, when they fire someone for some frivolous reason, they come to sites and blogs like this to complain about how the system is engineered to work against them when their UI rate increases.

  35. SmallBusinessYouWantTOKill says:

    Karen,

    We are a small family business that does kitchen remodelling, lately our business has been booming, while we have thought about hiring outside helping hands, it is the problem of ui rate we’re facing that kept us from hiring any employees, we’re afraid that employees we hire won’t want to work or are lazy and as such if we fire them our ui will go sky high.

    As a small family business with 5 years of experiences, we really wish we have a way to try an employee out before facing potential damage of getting sky high ui, this is the problem I believe many small businesses are facing.

    Many small businesses like mine would like to get some additional helping hands, but due to this type of regulations and potential employees that would rather kill us than help us, we would rather hire our own family members than risk seeking someone who turn out to be a bad fit for our business.

    And for some other small businesses out there, they would rather hire illegal immigrants just for the purpose for getting around ui rate, even if they pay some amount for employees. For other larger businesses, they have the money to move their company out of states to avoid this type of regulations/workers.

    As for the future, business owners will stay as such due to this type of regulation and jobless workers will still be jobless no matter happens to economy down the road, unless some miracle happens that can make business double their profit so that they can take the risk and hire ONE additional worker, majority of business owners will rather move their company outside of states and leaving only their service department to take in barebone orders. You probably don’t even notice them doing this, after all, they want you to believe that they are serving you.

    • lul says:

      “we’re afraid that employees we hire won’t want to work or are lazy and as such if we fire them our ui will go sky high”

      This is your problem right here. You think that any time you fire someone that they are immediately and automatically eligible for UI. Remember, an employee’s termination must be ruled as “without just cause in connection with work” in order for them to be eligible for UI compensation.

      As a small, family-owned business, you probably don’t have any company guidelines in place. You probably think to yourself, “Well, if they’re not doing what we tell them to do and we fire them for it, the ruling will obviously go in our favor.” Nope. You need to go into “corporate mode” and outline a set of explicit guidelines that all employees must meet in order to retain employment. Set a written and agreed-to production standard for your employees to meet and write up a document every time they violate company code or fall short of production standards. Have this document signed and dated by you, the offender, and a witness whom you can use to testify in your favor if the case ever goes to a hearing.

      You should also conduct a proper interview and check references. If you hire someone with inadequate experience or who comes to you with no references, you’re taking a chance when you hire them. You obviously know what you want in an employee and know what skills are required to do kitchen remodeling, so make sure your interview really drills down on the core facets of kitchen remodeling. Only you can determine whether or not the employee is qualified.

      You also need to properly enforce your guidelines. If you let your employees break every rule in the book and not address your grievances until the very last minute, that will go against you if the offending employee is smart enough to bring it up to the hearing officer. For example, I was fired once and one of the reasons my employer gave was that I was late all the time. This was true, and I confirmed for the officer that, for the entire four months I worked there, I’d show up 10-20 minutes late every single day without a single word being said to me. The hearing officer dismissed this reason and ruled that my ex-employer was setting the improper precedent for his employees in spite of written company guidelines.

      A small business having to adhere to its own company guidelines is probably one of the toughest snags for an business owner. You have to make sure that you fire any employee who reaches their third strike. Unfortunately, you don’t know when their third strike will come along and you may not be able to hire an immediate replacement should you be required to fire them without sufficient warning in advance. This means you either have to let their violations slide for the time being or plan ahead and hire an extra employee just in case. If the former, it will most likely come back to bite you when the UI claim is filed. If the latter, you’re stuck paying an extra employee who you may not eventually need should your problem employee shape up rather than ship out. Then you are left with laying off the extra employee who will be eligible for UI automatically since lay-offs are generally not considered just cause.

      Just trying to offer my advice is all. Unfortunately, the majority of disgruntled business owners won’t read this until they arrive here huffing and puffing AFTER their UI rate has increased.

  36. SmallBusinessYouWantTOKill says:

    @lul, thank you for your advise but let me remind you that we as a small business owners (under 50 employees) does not have the resources to get an HR department or setup corporate employee guidelines just for getting two or three extra employees, we would rather let our work pile up and schedule it for months and year ahead rather than facing such UI requirements.

    ” You need to go into “corporate mode” and outline a set of explicit guidelines that all employees must meet in order to retain employment. Set a written and agreed-to production standard for your employees to meet and write up a document every time they violate company code or fall short of production standards. Have this document signed and dated by you, the offender, and a witness whom you can use to testify in your favor if the case ever goes to a hearing.”

    No, thats not our thinking, we know UI usually rule against employer and we must showup/file paper work for proving otherwise, therefore, it is a waste of our time and, we would rather not hire them.

    We upper the manufacture requirement from our supplier just last year due to our booming business, we no longer do in-house cutting/fabrication, everything is now done oversea before they ship to us, so now we can finally get our work done quicker by focusing only on installation.

    And no, we didn’t fire any employees since they are our extended family members, we have everyone working as installer or as customer representative, so all of our work has finally been cut down to about 2 or 3 months now.

    “You should also conduct a proper interview and check references. If you hire someone with inadequate experience or who comes to you with no references, you’re taking a chance when you hire them. ”

    Usually if small business wants to hire you, we won’t go through such effort of checking references, etc so that we can hire a correct person, if we hire we need to hire quickly to get an extra hand, not every company is a corporation, just remember that, since small business is more like mom and pop, they would probably hire you with lesser requirements in the good economy and not hire at all in the bad economy, its the blue collar workers that are losing in this economy.

    • lul says:

      “@lul, thank you for your advise but let me remind you that we as a small business owners (under 50 employees) does not have the resources to get an HR department or setup corporate employee guidelines just for getting two or three extra employees”

      The minimum resources you would need to put forth a sturdy set of company guidelines and a production standard are 1) a pen, 2) a few sheets of paper, and 3) cognitive faculty. You certainly don’t need an entire HR department.

      “No, thats not our thinking, we know UI usually rule against employer and we must showup/file paper work for proving otherwise, therefore, it is a waste of our time and, we would rather not hire them.”

      Correct. If you make the decision terminate an employee, it is up to you to prove that your reasons for their termination were with just cause in connection with work. I am guessing that you probably don’t disagree with that since it wouldn’t make much sense for the burden of proof to be on the employee.

      “Usually if small business wants to hire you, we won’t go through such effort of checking references, etc so that we can hire a correct person, if we hire we need to hire quickly to get an extra hand, not every company is a corporation, just remember that, since small business is more like mom and pop, they would probably hire you with lesser requirements in the good economy and not hire at all in the bad economy, its the blue collar workers that are losing in this economy”

      Yet once again, you don’t have to be a corporation to make responsible business decisions. It would cost you zero dollars and zero cents to come up with a sturdy set of interview questions for your candidates. Take me, for example. I work for a small software development company that consists of less than 25 employees. One day, I got sick and tired of management hiring inexperienced programmers to come in and make absurd messes in our code. Being that I am an experienced programmer myself who has worked with the worst, I have used my past experiences of how a programmer should not conduct themselves to help the company hire people who are more likely to actually know what they are doing. To accomplish this, I wrote up a series of solid interview questions pertaining to the technologies we use in our development process. In addition to that, I also put together a very nice skillset placement test that challenges the individual to analyze poor programming practices and advise how the code can be rewritten to to make it more practical, efficient, and manageable. Do you want to know how long I spent on all this? About four hours, and I am just a below-management-level employee. As a business owner, what is your excuse?

      After reading your post, it no longer seems as though you have anything to complain about. You hire family members you can trust, you no longer have to do your own cutting, and your productivity has increased. What was your purpose for ever posting here in the first place?

  37. SmallBusinessYouWantTOKill says:

    @lul, yet once again let me remind you that not every job is like your desk job ours are hands on work, therefore you can say that not everyone of our employees has finished their high school diploma, and as such our work hours are longer, and require less of literacy and those we that have the knows how to write up such paper are too busy on their jobs rather than spend on making corporate regulation for one or two new employees, we would rather make our work more productive. We are even smaller business than yours, we only have 13 employees.

    Remember, your job is a white collar work that works on desk with computers, while majority of my workers are blue collar works that requires you to know how to hold a drill, saw and lifting works.

    My purpose here is to post on why UI is causing more problems for unemployment issues and how a country should go about fixing it, because I as a small business owner stated my problems on why I’m not hiring and whoever is doing a research on unemployment issue should read it and if they want to fix the current unemployment issue they should solve some of problems that small business owners such as myself facing.

    Again, if you’re never a business owner you will never understand our reasons for our existence, unless you live in a communist society where everyone gets a job regardless if you have the skills, in our capital society, our business exist is to make a profit, we don’t exist solely for employees.

    In many ways I do wish to hire outside employees, but it will never work out and if I change my business way, we would be in bankruptcy because all of our larger corporate competitors are doing the business the same way we are.

    Many mom and pop businesses closed down due to competitions abroad, but we manage to continue our business due to our ability to use some of their strategy in using works fabrication works abroad and continue our installation work at home.

    • lul says:

      “@lul, yet once again let me remind you that not every job is like your desk job ours are hands on work, therefore you can say that not everyone of our employees has finished their high school diploma, and as such our work hours are longer, and require less of literacy and those we that have the knows how to write up such paper are too busy on their jobs rather than spend on making corporate regulation for one or two new employees, we would rather make our work more productive.”

      Your employees work too much and are too illiterate to write up a few regulations? What? Did you really make that argument? And, anyway, that’s not their job. It’s yours. *You* want to run a business. *You* want your business to grow. *You* want to hire outside employees. *You* want to reduce the risk of a UI claim. Therefore, *you* need to take proper precautions in order to accomplish this.

      “We are even smaller business than yours, we only have 13 employees.”

      So what?

      “Remember, your job is a white collar work that works on desk with computers, while majority of my workers are blue collar works that requires you to know how to hold a drill, saw and lifting works.”

      So what?

      “Again, if you’re never a business owner you will never understand our reasons for our existence, unless you live in a communist society where everyone gets a job regardless if you have the skills, in our capital society, our business exist is to make a profit, we don’t exist solely for employees.”

      Okay… and?

      “My purpose here is to post on why UI is causing more problems for unemployment issues and how a country should go about fixing it, because I as a small business owner stated my problems on why I’m not hiring and whoever is doing a research on unemployment issue should read it and if they want to fix the current unemployment issue they should solve some of problems that small business owners such as myself facing.”

      And what arguments have you actually presented that address the problem other than point out your inability to step up to your own plate? Do you want to know what these “UI researchers” whom you speak of are going to write down in their notebooks when they stumble upon your woeful story? They’re going to note that the current system is working just fine, but that you are just one of thousands of small businesses who refuse to assimilate. Do you want to know how larger businesses mature? They start out like yours, but make strides. They make responsible business decisions and conform to the system rather than whine about how unfair it is. They put together an employee handbook. They set production standards. They conduct proper interviews. They check references. And they do all of this early on while their business is small like yours, not run to the nearest internet site to complain that their company is not yet mature enough to be THAT responsible.

      If anything, you’ve only damaged the cause for those struggling on your side of the fence by coming here and presenting yourself as the poster example of why small businesses fail or stay small forever, and it’s all summed up in your initial argument: “we’re afraid that employees we hire won’t want to work or are lazy and as such if we fire them our ui will go sky high.”

      Yup, you’re doomed alright.

      • SmallBusinessYouWantTOKill says:

        “Your employees work too much and are too illiterate to write up a few regulations? What? Did you really make that argument? And, anyway, that’s not their job. It’s yours. *You* want to run a business. *You* want your business to grow. *You* want to hire outside employees. *You* want to reduce the risk of a UI claim. Therefore, *you* need to take proper precautions in order to accomplish this.”

        Once again, you are the exact type of employees that thinks the world owes you everything, its always about you, its never about the person who have the mind to operate a business by herself. You think all the employees are so innocent babies that must be feed and work lightly or else you will be crying to the big daddy government, its your type of person that should be living in a communist society, it will be very beneficial to you since you want everything to be easy work and everyone gets all the same pay (doesn’t matter how much working ability they have).

        “So what? Okay… and?”

        Are you seriously running out of your grey matter? Can’t think of a good reply? But then again you are only a drone, a worker that has no mind of his own except for complaining how much work you have on your desk and how much you want to get pay for that additional hour of lunch time, or how much health insurance benefit you want to have and how much doc say you should work less hours so that you can be happier.

        “Do you want to know what these “UI researchers” whom you speak of are going to write down in their notebooks when they stumble upon your woeful story? ”

        Please if you know whom those UI researchers I’m talking about please give a name, because there are thousands and thousands of researchers out there that does many surveys and researches and your one side opinion is not always the right one.

        “Do you want to know how larger businesses mature? They start out like yours, but make strides. They make responsible business decisions and conform to the system rather than whine about how unfair it is”

        Do you want to know how many larger business have mature under different rules and regulations than this economy’s business? You probably don’t know, you think that everyone has equal chance in our nation, but you are wrong, very very wrong, the older larger businesses operate by changing regulations in our economy to favor larger business and restrict competition from smaller businesses. Yes business make strides, do you know how business now days make strides in this economy? We adapt by doing more work oversea and less manufacturing work inland.

        ” They put together an employee handbook. They set production standards. They conduct proper interviews. They check references. And they do all of this early on while their business is small like yours, not run to the nearest internet site to complain that their company is not yet mature enough to be THAT responsible.”

        Are you fucking out of your mind? Small businesses don’t start out with employee handbook, I suggest you to try and operate a business of your own and see if you can start it with a employee handbook.

        You are exactly the type of employees that has absolutely no sense of how a business operates, and yet you are here to complaint how things are unfair towards the workers, you should try see things on other side of fence.

        “If anything, you’ve only damaged the cause for those struggling on your side of the fence by coming here and presenting yourself as the poster example of why small businesses fail or stay small forever, and it’s all summed up in your initial argument: “we’re afraid that employees we hire won’t want to work or are lazy and as such if we fire them our ui will go sky high.”"

        LOL, if anything, my comments are not for your opinion only, I am here stating my opinion, and just “remember” I have my rights to state my opinion here.

        “Yup, you’re doomed alright.”

        LMFAO, no I’m not doom, I have the ability to flex my business to suit this economy and once again let me state from previous post that my business is booming in this economy and I’m not hiring locally due to our regulations, you can say that I’m keeping up with the big competitors by indirectly hiring oversea workers doing works that are originally done by my warehouse.

        In fact a person like you will never understand how business operates, you will always think everyone owes you for all the long 7 hours time you put in the work and all the very little two day breaks that you get in a week. The world is sooooo unfair to someone that has a chip on their shoulder.

        • lul says:

          SmallBusinessYouWantTOKill – You have taken this whole thing in every direction. You’re talking about communism, that I complain about how much work I have on my desk, and that I have no mind of my own, all of which are irrelevant to any statement I have ever made. Your entire argument against UI compensation has been that you are too afraid to hire employees because you might have to pay them UI if you need to fire them. Every time I recommend that cover your arse by putting together a handbook, production scale, interview checklist, and checking references, all you can say is that your business is not yet big enough to add that much extra food on its plate. That is a weak excuse.

          You’re forgetting that employees don’t just get UI automatically. If you fire someone because you don’t like the color of their slacks or you need to lay them off because you can’t afford to pay them, yes, they will be eligible for UI, and rightfully so. However, if you have a company handbook in place that outlines a three-strike rule for arriving at work late and you’re writing up employees every time they fail to adhere to this guideline, you have a strong case and will not lose. If you put together a production standard that outlines the workload that is expected to be completed, you have a much stronger case in the event that you are dealing with a lazy employee who doesn’t want to work. If you put together proper interview questions that pertain to your line of work, you can find out whether or not the individual is qualified to work there, thus avoiding having to fire them for not being qualified enough. If you check references, you can get a good feel as to whether or not they’re a dependable employee.

          It’s not hard, yet you do nothing but come up with excuse after excuse as to why you don’t/won’t/shouldn’t have to do it. Yes, there will be cases when a problem employee gets one over on you and collects UI when they are truly not deserving of it, but that, in and of itself, is not the core problem of the UI compensation system. What breaks small businesses is when they fail to understand how the UI system works. They think that their business is like their home. They own it and pay taxes on it, and if someone is in their home that they do not like, they can throw them out without having to answer to a higher authority. It doesn’t work this way with business.

          And you still have not provided any arguments to support your claim that the UI system is broken. All you’ve really talked about is how your own personal fears are driving you to outsource as much production as you possibly can, but guess what? Outsourcing is happening anyway. Companies are not going overseas because of UI compensation. They’re going overseas because the labor is cheap and they are able to avoid paying many US taxes. UI rates are a drop in the bucket compared to the big picture, and these “UI researchers” know this and realize that other business in the country are doing just fine with UI in place.

          The fact that you’ve been reduced to dropping f-bombs and throwing out gratuitous LOLs and LMFAOs serves as an indicator that you’re losing it here, so I’ll just let you have the last word on this for now. Hopefully, these UI researchers whom you apparently believe are spending hours on Google researching the effects of the broken UI system will find much more credence in your arguments and revise the system so that you can hire employees sans all your aforementioned fears.

          Good luck. You’re certainly going to need it.

  38. Eric says:

    I prefer the idea of static economics in this instance where all those employer matches are money you earned and they had to send to the government. If you were made responsible for your own retirement, healthcare and potential unemployment, say thru several mandatory accounts. You could
    1) direct those funds to low or zero risk interest earning accounts. ( no option for high risk for medicare or unemployment)
    2) It’s YOUR money, to access when you need it based on stupilations about retirement age, unemployment and health.
    3) the unemployment savings account is YOUR’S, if you get laid off, you get access to it tax free, all of it. If you get fired, or quit, you have to pay full taxes on the money. But its still Your’s and you don’t have to access it. Plus, if at retirement age you have not used it, it rolls into your retirement account.
    4) Your private retirement account is mandatory like Social Security, but its yours to direct into low risk funds, and you can add more money to invest as you see fit, any interest on the mandatory fund can be added to the investment fund growing your account faster.
    Privatizing all these social programs is the only way we are going to stop these politicians from wrecking the country, and frankly, I would mush rather manage MY money than washington, Georgia, or My county government. Only I have my best interest in mind, and with a few rules in place to prevent people from spending every penny or risking it in bad investments, anyone can do for themselves better than the government.

  39. Eric says:

    Employees shouldn’t have to pay for unemployment, period. It’s sole purpose it to help individuals whom are unemployed at no fault of their own. A.k.a. it helps employees pay their bills when their dip***t of a boss fires them for any reason that isn’t appropriate. I’ve been fired 3 times in my life, all of them were wrongful. One was when a project was signed off by a superior and it was wrong, I got fired. Another I and three other people were removed from the schedule without notice. The owner didn’t have the balls to tell us we were being fired, he claimed I received three write ups which he didn’t have to show me. The third was retaliation, I reported the loss prevention supervisor for misconduct and he fired me for theft with no proof, the bastard lied in his report. UI saw through his lies and awarded me my UI. Unemployment isn’t a benefit, it’s a means to discourage jerks in authoritative positions from doing whatever they want “because their the boss”. If you aren’t a moron, your UI goes down. Plain and simple.

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