Niki Kelly has an article about testimony in the Senate yesterday with respect to fixing the unemployment fund. Apparently there was a good deal of focus by small business owners on abuses in the system. I suspect abuses are a small fraction of the cost, but anecdotally I can say the system has its flaws with employees terminated through their own fault being awarded unemployment benefits. Employers have to sustain a high burden of proof before an Administrative Law Judge will uphold denial of a terminated employee’s benefits. I guess that is a valid policy choice, but perhaps one that should be revisited in light of the shortfall. Other testimony suggested that some businesses use the unemployment system as part of their business plan with seasonal layoffs. Those employers might reasonably be expected to pay more into the system for the luxury of keeping a chunk of their workforce effectively on call.
But, really, I expect that the fundamental problem of too many people receiving too many benefits on the strength of too little money paid into the fund won’t be fixed by working around the edges. Employers will have to pay more and former employees will probably have to take less. Obviously the best solution would be to have fewer unemployed people. Maybe they can legislate that.
The answer that businesses do not want to hear and employees do not want to hear is–raise payment (by percentage or seriously raise the level of income on which unemployment
The article states the maximum tax paid by an employer annually per employee is $292, and that would only be if the employer is using the system a lot. In my experience employers fight these cases when they want to make dead sure, that the justly fired employee doesn’t get a dime of underserved unemployment! They feel very self-righteous. On the cases that are a bit iffier (and often when an emplayee is fired for cause it is) the employer initially throws up some road blocks, but then softens at the point of an actual hearing or just doesn’t show up, and the employee wins. I think it is a pretty good system. I can understand why the hearings would bring the kind of grips they are. But really, $292 a year?
It is a bit confusing for the smaller employers, but sometimes just letting the “justly terminated employee,” at least in the employer’s view, get her unemployment is a way to bring some healing.
I’ve even heard when the employer at the hearing says, well I think she was fired for cause but I don’t care if she gets her unemployemnt. Well, the ALJ is going to give the person her unemployement at that point. Wouldn’t you?
Piffle.
Fort Wayne businesswoman Donna Schafer told the committee the state should provide help for unemployed workers trying to get over the hump. But she said some workers are regular users of the system and receive unemployment for expected seasonal breaks.
“Small business is different than huge industry that many people are accustomed to,” she said. “It is a family.”
After making her public testimony, Schafer declined to name her business.
First, a translation: “I treat my employees like family” means “I’m importuned every time one of ’em has a cold or stays home to tend a sick child”. It does not mean they’re dropping over weekends to help themselves to the liquor cabinet or borrow the boat. Odds that “family atmosphere” means “employees required to run my personal errands and perform services for Big Mama as well as the business”: Even money.
The thing that’s tough on these types is that unemployment law requires you to treat employees as employees, not serfs, assuming you want to keep your rates low. You have to have an employee manual, or some other proof that people know what their jobs are and what’s expected of ’em, and that they’re treated the same as all other employees. If you have a problem with an employee, aside from theft, absence, or the like (or anything you’ve designated as grounds for immediate dismissal in that employee manual) you document your discussions with the employee, and on the second recurrence you can fire him without paying compensation.
Not to mention the hundreds of thousands of methods at your disposal–especially in a “right to work” state–to “encourage” people to quit.
Ms Schafer declines to reveal her business; Ms Kelly declined to reveal the evidence, if any, she brought along with her testimony. So we don’t know what “regular users” she refers to, or if they are members of her happy band. Actual seasonal employees (less than 25 weeks work) aren’t eligible. Employees of a business that shuts down for two months out of the year are; that’s the way the system works (though it is also based on wages from 4 of the last 5 quarters, meaning new employees could be SOL for a year, and the long-term “regular use” is limited). I serious doubt widespread abuse, but if there is let’s point the finger at our hypothetical employer first, since he has several legal stratagems available to avoid dumping the responsibility on the state in the first place.
Missing part of Jack’s comment?
My limited anecdotal experience is that it’s fairly easy for employers to duck around paying unemployment if they are determined enough.