Unemployment … every business owner’s favorite topic….
Not quite! Unemployment, taxes, claims, and everything else that revolves around the topic is quite complex.
Most businesses with employees pay state unemployment taxes. Each business’s particular rate is affected by the stability of the business’s employment record. A more stable employment record almost always results in a reduced tax rate over time.
However, if unemployment claims are authorized or repeatedly filed against you, your rates could go up. Additionally, claims result in lost time and money due to having to provide timely, complete, and accurate information at the time of the claim. No wonder we want to avoid them!
So, who can actually file for unemployment? Are these benefits offered to full-time employees only? What about part-time employees? Can they collect unemployment as well?
In short, yes. Your state’s department of labor will evaluate their eligibility based on past wages (most often the past 18 months). If the employee made enough money during the necessary timeframe, then it does not matter if they were working part-time or full-time.
In fact, those that have been demoted from full-time to part-time work can actually file a loss-of-work claim and, if authorized, receive partial payments.
What can you do to limit your chances of facing unexpected expenditures surrounding unemployment? First, document, document, document! If an unemployment claim is filed, you will be given the chance as the business owner to dispute the claim. If you can prove that the employee left voluntarily or transitioned from full-time to part-time by choice, the claim may be denied.
Second, if you work with a PEO or are going to be in the near future, you’re already in a pretty good position. PEOs assist business owners by significantly decreasing risk and liability. Through the co-employment relationship the PEO assumes many employee management responsibilities. They help clients win unemployment claims by keeping appropriate documentation and also help to ensure workplace compliance. Through frequent audits they can also help identify and protest erroneous charges or claims tied to state unemployment tax (SUTA).
Because employees are documented as employees of the PEO and not the client for tax filing purposes in a co-employment relationship, the PEO is responsible for unemployment taxes. It is in everyone’s best interest to continually work to keep rates (and claims) to a minimum.
If you’re interested in unemployment claims support or are looking for employee management solutions to help further protect your workplace (and money), call 877-636-9525 or contact us online.