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Discussion in 'Business Operations' started by 4 seasons lawn&land, May 16, 2012.
Is an unemployment claim expensive on your ins premiums?
I was wondering the same thing as I'm about to let one employee go.
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Only claim I ever had got denied. Didn't cost me anything except a little of my time on the phone for a "fact finding interview" with someone from the unemployment commission.
Our work is seasonal here in NY so I wouldnt mind if my help recieved unemployment for that time but if it costs me another $500 a year I'll just use help less than the minimum amount for unemployment.
My guys use the lack of work loophole to collect all winter. So as a result of that I get to pay the max rate of 6.9% instead on 1.9% here. So that's an additional 5000 dollars for every 100k in payroll. Hope that helps as you can see its more expensive then you might think but its a hidden cost.
A friend of mine has a handyman service that typically runs 3-4 trucks. A few years ago, when the Winter workload was slow, and he laid off a couple of his people. They collected unemployment during their time off, and his rates skyrocketed the next year. He concluded he should keep his people around all Winter doing little (working only hours as necessary), but paying for full-time work, rather than be burdened with high unemployment rates.
It may be a tough call on the balance. The problem is finding out beforehand may be difficult.
It depends on how long the employee worked for you, how much he gets paid etc. It varies from case to case and of course, state to state