State Unemployment Insurance Tax (SUI) is not something business owners think of too often. It’s one of the little known, but required cost outlays of running a business. Take New York as an example. A 16 person firm in New York with the best SUI rate will pay an annual tax of roughly $3,300 per year. Add one or two unemployment claims, or false claims and that annual tax rate can jump to over $16,200 per year*. Implementing a few simple automated processes can keep your firm paying the lowest possible rate. Proper documentation can help win false unemployment claims by offering proof of the reason(s) behind an employee discharge. Documentation also provides evidence that a termination was legitimate and handled fairly. This is especially useful if the former employee files a lawsuit or charge with the Human Rights Commission. In most states, people who lose their jobs through no fault of their own are entitled to collect unemployment compensation. Typically, an employee who quits a job doesn’t qualify for unemployment benefits unless there are extenuating circumstances. The most common reasons unemployment benefits are denied are misconduct and dismissal for cause. In order to present the strongest case possible, follow these five steps.
- Take immediate action. Talk to the employee about the problem as soon as it occurs. Make sure they know your expectations and what they must do in order to meet them. When employees don’t understand what’s going on, they are more likely to feel they were treated unfairly and, as a result, file a claim or look to legal action.
- Document. Maintain written documentation in the form of a corrective action notice of every meeting you have with the employee to discuss the performance issue. Give a copy to the employee. Be specific by describing the exact nature of the problem and solution. Avoid generalities such as “poor attitude”, “lacks initiative” or “doesn’t get along with others”. Instead, describe the behaviors that led you to reach such conclusions.
- Include the employee. Explain the nature of the problem and the impact it has on the organization. If the employee acknowledges the problem, it will be easier to fix. On the flip side, if they deny it, you can use that as evidence that the employee didn’t respond to constructive feedback.
- Act quickly.If the employee’s performance doesn’t improve, take action. Don’t debate the issue or delay the decision. Doing so will weaken your position and give the impression you condone the behavior or that the problem wasn’t serious.
- Be honest. Clearly tell the employee why they are being terminated. Don’t negotiate or change your mind. Be firm in your decision.
JuvodHR employee management software offers simple tools for small business owners to develop and communicate job expectations. The process begins with a valid job description. Creating a job description is automated with a job description creator, JuvodHR experts did all the work and included over 14,000 job titles for users to select from. A single job title delivers an entire job description, including the top tasks and work styles, the personal qualities an employee needs to be successful. Once selected, the job description can be edited to any individual business needs.
Corrective action notices and performance reviews are tied directly to the employee’s job description. This empowers managers to rate employees on their exact work making the process easy to complete and logical to explain – a definite plus for an unemployment hearing. Research shows a performance review bound to a job description is more legally defensible when fighting false unemployment claims or lawsuits.
Following the tips outlined above will provide a winning strategy when the time comes to contest a false unemployment claim. In preparation for a hearing, review the employee’s statement and write a summary of the key points you intend to present.
Provide sufficient evidence early on in the process. Explain the situation; offer supporting documents and witnesses (if applicable) to support your side of the case. Rely on the facts – they are the basis of a good case.
* SUI Rates quoted for New York are based on the Base Wage of $10,300, rates range from 2.025% to 9.825% for 2014. New employer wages for New York are set at 4.025%. Rates vary by state.
About the Author
Pam Waits, Ph.D., JuvodHR. JuvodHR was founded in Chicago by serial entrepreneurs Susan Mravca & Peter Spevacek in 2012 to be functional, easy and fast. The goal of JuvodHR software is a self-service employee evaluation which can be done by any front line manager or business owner which provides valid results based on well-researched data.