Definition: A federal program whereby eligible unemployed persons receive cash
benefits for a specified period of time. These benefits are paid
out of funds derived from employer, employee and government
contributions.
Unemployment insurance helps workers who've been terminated by
tiding them over financially for a limited time while they search
for another job. For employers, unemployment insurance is primarily
a paperwork headache. Tax rates for employers with good records of
avoiding layoffs vary by state but are as low as a fraction of a
percent of total payroll. For employers who have large numbers of
former workers filing claims for unemployment insurance, however,
unemployment taxes can be a significant financial burden. Here are
three ways to minimize unemployment claim impact:
1. Understand the laws in your state. The agency that
collects the tax can provide you with details of the regulations.
Know what kinds of layoffs or terminations can trigger unemployment
claims, and avoid them whenever possible.
2. Protest questionable unemployment insurance claims. Do
not allow employees to file unjustifiable claims against you. It
can take time and effort to contest questionable claims, but it is
worth it in the long run. Your state unemployment benefits
administration agency will let you know when someone has filed for
benefits and ask for your input. Provide it.
3. Keep careful records of your tax payments and any charges
against your unemployment insurance account by former
employees. Errors have been known to be made. If one is made,
protest it and document it. File your tax payments on time to
bolster your position as a dutiful corporate citizen.