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employee unemployment

Discussion in 'Business Operations' started by DBL, Dec 11, 2008.

  1. DBL

    DBL LawnSite Silver Member
    Messages: 2,219

    Over the 6 years doing this and the many many employees that we've had, never has this happened. Im doing my research on it right now but was just wondering if someone could give me the highlights of the system. This guy was just one of the newer guys from the year so when it got slow and we went down to one or two crews he was let go until next year when we go back to full staff. I also left it open to him to come back during snow storms and shovel. Anyone have any info on whats next?
  2. AintNoFun

    AintNoFun LawnSite Bronze Member
    Messages: 1,807

    well i know if it was NJ, u let him go due to lack of work and he can collect.. your UI rate would most likely go up... im surprised so many people on this forum have a problem with their guys collecting.. its a seasonal business..
  3. DBL

    DBL LawnSite Silver Member
    Messages: 2,219

    do you do somehting to not allow them to collect
  4. AintNoFun

    AintNoFun LawnSite Bronze Member
    Messages: 1,807

    nope i never argue unless they quit.. my guys work hard and break their ass for me.. if i have to pay a few more dollars because my rates went up so be it.. its something im willing to do to retain good guys..
  5. TPendagast

    TPendagast LawnSite Fanatic
    Messages: 10,020

    there are two different types of States when concerning employment.
    Right to work States
    and At will States.

    In a Right to work state there are very few reasons you can let someone go.
    Stealing and lack of work arethe basic reasons.

    In an At will State you can let them go because they wore too many blue shirts in a row to work (basically you dont have to have a reason)

    alot of people misunderstand that the difference between these two types of states is the difference between who can collect UI (unemployment insurance) and who cannot.

    That is false.

    Those differneces have more to do with wrongful termination suits than anything and are as such meanginless for this topic. With one exception.

    In a right to work state, you can collect what is called "Job attach unemployment insurance". What this means is, I have a job (landscaping) but right now there is no work until april 15th. But when that date comes around, I will go right back to work.

    In states where you cannot collect or file for job attach UI, you must actively look for and accept other work opportunities, the UI is only for when you can't find a job.

    Basically Job attach (espeially for landscape companies) is a sweet thing. You make your money during the summer and rack out during the winter, you dont even have to go look for another job to qualify, you are going back to work as soon as the season changes.

    This is a GOOD thing not a bad thing.

    UI is a right, not like regular insurance ad someone claiming a wrong oing against their company.

    Another myth, if employees collect unemployment your costs of insurance goes up.
    Not true.
    UI is collected by the state, it is not a private insurance and is more related to social security rather than true insurance.
    Most states have changed the term to Unemployment Benefits and are getting away from unemployment "insurance".

    The way your UI rate is determined is based on the TYPE (or code) of business you are in. The State assesses your rate based on percentage of payroll and your "rating code"
    Bascially ALL the landscape companies in your state have the SAME code. there isnt a level "of risk" from one company or another.
    The rating cde comes form the historical figures of what ALL landscape companies are likely to do an their employment habits as a GROUP.

    So since landscape companies are notorious for hiring and firing and high employee turn over, then their rating code puts that type of company in higher than say, the post office.

    An employee is not claiming a "wrong" against you, it is not a lawsuit and it does not affect your business in any way. He is making a claim for his benefits as if say he retired and wants social security (something business owners also contribute to).

    What happens is,the employee enters a claim, "I.e. I am out of work for this reason" If he voluntarily quit, he cannot collect, it has to be out of his control. He cannot lie either, if he says he's out of work because there was a lack of work, but he was let go for stealing from the cash register, he would be denied UI.

    This is the reason the employer gets notified, so he can fill out the appropriate forms and verifiy the employees claims.

    If the employee was laid off and told he will be called if there is snow, but there is no work right now. He has every right to collect unemployment, but whne he does go into shovel snow, he needs to report that income to the state so if there is a need to adjust his benefits for that week they can do so.

    Basically, the employee can earn up to half his weekly benefit claim without his amount of the claim benefit being adjusted.

    The claim amount is based on the last two years of employment for most employee but at least the last 4 fiscal quarters, so in most cases, if an employee has only been working for you for a few months, most of the information for his benefits is commig from the pay he recieved from the guy before you.

    Remember unemployment benefits are a state sponsored benefit designed to stabilize the economy, not to penalize employers that lay off their workers.

    It's nothing to worry about or even be concerned with, fill out the paper work accordingly and send it in, it doesnt affect your business. Unless of course you dont pay your UI payments and someone tries to collect against you an there is no record of the payroll, any payroll to an individual over $600 in amount must be reported and the taxes, social security and unemeployment must be paid on it.
    So if you are running payroll illegally, and then lay someone off and they try to collect, you could be in trouble, especially if they can proove they were emoployed there.
  6. TPendagast

    TPendagast LawnSite Fanatic
    Messages: 10,020

    There is nothing you can do to stop them from collecting, and there is no reason you should want to stop them from collecting.

    IF you fired that person for some illegal activity, OR the person quit on their own, Tell the state. Otherwise all you are oing is verifying yes the person was employed here from this date to that date, yes thats s what he was paid an no, he is not employed here currently due to the reason he stated (in this case laid off due to lack of work)
  7. LushGreenLawn

    LushGreenLawn LawnSite Silver Member
    Messages: 2,120

    how much does it affect your rate?
  8. CNYScapes

    CNYScapes LawnSite Senior Member
    Messages: 916

    Here in NY you start out as a new business at a rate of about 4% of payroll. If your unemployment account goes in to a negative balance then your rate goes up respectively up the the max rate which is about 9% of payroll. Thats where we are, but oh well its the only way to keep the guys till next year. We plow but thats only 150 to 200 hours per winter for each guy.
  9. TPendagast

    TPendagast LawnSite Fanatic
    Messages: 10,020

    Weird NY does an account?

    in most cases the unemployment is figured from the last four quarters the employee worked, so that income is not always figured just from the last guy he worked for.

    So if your guy leaves you and two months later get laid off from somewhere esle, your "account" could still get tapped for his unemployment and it wasnt even you who laid him off.


    anyway at 9% of payroll vs. 4% at the lowest it is hardly anything to cry about.

    Let's say you had 10 guys that work for you and they all get 18k per year so thats 180,000 in pay roll. So it costs you $16,200 if you are at the highest rate possible every year.

    If you kept them all on they would have those extra hours to get paid for (lets say four months in new york for arguements sake) thats an extra $9000 per man or $90,000 to keep the guys employed.

    The diffference between 4% and 9% is only $9000.

    Its waay cheaper to lay the guys off and let them collect unemployment,than to keep them on.

    For those of you that think you should save that $9000 and your guys should not collect and go find other jobs, that simply doesn't work that way. and you should be ashamed to admit thats the way you think.

    For the employee, they generally collect 3/4 of their full timepay and are elidgable to collect even if you drop their hours during the winter.

    The way it works is they get 3/4 of the full time pay (at $13 per hour times 40) which for this purpose is $390. In most states there is a cap of something like $350 per week.
    The employee can earn up to half of his unemployment benefit with another job and not even effect his unemployment benefits.
    In this case he can earn $175 and still recieve unemployment.

    So at $7 per hour at burger king, working a typical weekly shift of 25 hours,he would earn the extra $175 and stil pull the $350 from unemployment.

    If He earns more than half his UI benefit, then it gets deducated dollar for dollar (lts say got promoted to shift supervisor and gets 40 hours a week at $10 per hour) Take his 400, take the 175 off what hes alloted and take the rest off his benefits and he still gets to collect $125 per week of unemployent benefits.

    Although I think if he actually works a full 40 then he can no longer collect unemploymemt.

    However, think of this, if he gets a job as a shift supervisor at Burger King hes more likely to get paid $12 per hour, and has a ton of benefits an no lay off period. So at that point WHY would he come back to work for you?

    Your more DECENT guys probably get paid $14-$16 per hour and have a wife and or kids, dont you want them back next year?
    WHY would you not want them to get SOME money to support their family and pay the rent?

    Look at it from another benefit, if they can survive off the unemployment through the winter ( a good employee will stock up any OT they get to help pay off bills during the winter.) The guy comes back rested and reay to work!

    At $13 an hour the guy takes home $18,000 (or more with OT) in "the season" and with unemployment, brings home another $5600 in unemployment for atotal of $23,600. With two kids he will get back about $5000 in taxes in February with EIC in effect, so depending on where he lives it is quite possible to do.

    Heck I,MYSELF could live on that and like that, anyone hiring? LOL
  10. zimmatic

    zimmatic LawnSite Senior Member
    Messages: 416

    tpendagast, I read many posts on this site and let me say the last two post you submitted were one of the' most intelligent I have ever read. That is exactly the way the system works.
    I would offer up advice to read this thread. If your employee is worthless try to sublimably (SP) talk them into quiting, then they cant claim unemployment. I achived this with 2 employee's. I dont like worthless people trying to claim benifits when they dont deserve them IMO. However, the employee's that work good I dont raise any fuss over them claiming unemployement benifits. Its a way for them to return next year.

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