When an employee is let go at no fault of their own, they are entitled to unemployment insurance. It provides temporary financial assistance in the downtime before they secure new employment. Situations where this is applicable include downsizing and layoffs; however, if an employee is let go because of misconduct, they do not qualify.

It’s the company’s responsibility to pay

In order for these former employees to receive their benefits, some entity has to pay. While claims are filed and dispersed through an agency, the money ultimately comes from the company. Companies pay taxes on both the state and federal level into a fund that supports those in need of financial assistance.

The federal rate is set, but state amounts vary by where you are and specific events at the company. For example, if you have higher turnover rates, your company will pay a higher tax into the fund. In times of recession, states may not have enough funding, forcing them to borrow from the federal government to pay the unemployed. As a result, the amount companies are taxed in that state may be increased.

Additionally, times where the government determines finding employment is even more difficult, those filing may be eligible for Extended Benefits, allowing them to receive assistance beyond the standard 26-week UI time frame.

Avoid paying too much

While the taxes are necessary and mandatory, there are steps to help keep your spending down. First, work to decrease your turnover rates. If employees are voluntarily leaving, find out why and try to make changes within your company to hopefully promote retention.

Second, make sure you’re staying up to date with the unemployment insurance claims against your company. This will help you contest any claims that aren’t eligible when they come in, so you avoid payouts to an employee who left due to their behavior. Stay up-to-date with all filing deadlines so you don’t miss submitting documentation that helps your case.

Find a software that simplifies the process

Unemployment insurance claims are a lot for any company to monitor, considering the tax and law changes that can affect the details. Instead of trying to manage it yourself, consider purchasing a software designed to work for your company and help you stay on top of all claims.

Unemployment Tracker is one such software, designed to save you money in unemployment dollars as well as time spent in labor. Don’t just take our word for it – schedule a live demonstration today!