Tough Decision: Do I Allow Seasonal Unemployment?

Discussion in 'Business Operations' started by jbell36, Dec 3, 2012.

  1. Roger

    Roger LawnSite Fanatic
    Messages: 5,943

    I know an employer in my area (not lawn services) who has ups/downs seasonally, similar to lawn services. He has 3-4 people working for him.

    Several years ago, he laid off a couple of them for a few months (maybe three?). They collected unemployment. His rate for the unemployment insurance went up significantly the next year. He quickly learned that it was more economical for him to find some little work for them during the off-season, or not have them report at all, but yet continue to pay them. The unemployment insurance rates rose to a level where he could not afford to lay them off.

    That is just one instance, and may not be typical. You may or may not know what your rates will be for the next year, if these two folks draw off the insurance, until you get your bill. Your accountant may be able to provide other examples. But, as a previous poster said, your rates will likely go up. The question is how much?
  2. 32vld

    32vld LawnSite Gold Member
    Messages: 3,983

    A CPA should be able to determine to pay them what they would collect for UI and how them collecting UI will put the UI premiums you as an employer would have to pay. Then you will know which way will cost you the least.

    In NY you collect half of what you would gross till you max out at $400.

    So if your employees where making $600 a week their UI would be $300. So you can put them on "PT" and pay them the same $300 that they would get if they collected out of your own pocket. Though I can't see insurance premiums being the same or more then what a business would have to pay in salaries. So I think it would be cheaper to lay them off.

    Telling them to get a job for the winter and they may get a better job and not come back.

    Also if you do snow removal and they get an off season job they will not be available to work for you.

    With them collecting, they can still work a day or two when ever their is a storm and they would lose a percentage of that weeks UI check. Next week they don't work and they get their full UI check again.
  3. Duekster

    Duekster LawnSite Fanatic
    from DFW, TX
    Messages: 7,961

    Get more commercial accounts that offer year round payments.

    Work does slow down but it really never stops. Many of the guys want to take a 2 or 3 week vacation starting Christmas.

    Through the season I can often bank jobs with some clients.

    Late Fall and early winter are ideal times for low limb removal in parking lots. Transplants, new plantings. Mid to late winter is when you cut back perennials including Crape Myrtles and bunch grasses. Late winter to early spring is when you Core aerate and put down some pre-emergent as well as corrective pruning and heavy shearing on shrubs. Next thing you know it is off to the races again mowing.

    There is work to keep the guys off UE but you need to work on getting it for them. Save money all season too and be willing to throw in an extra 50 to 100 a pay period so they can pay their bills if there is a shortage of work because of weather or it is just slow. It is harder on you because you can not just say here is your mowing route and go back doing something else. You often have to hold their hands when it is residential work clean up.
    Last edited: Dec 7, 2012
  4. Ijustwantausername

    Ijustwantausername LawnSite Bronze Member
    Messages: 1,728

    Roger, or somebody, could you explain in more detail the "unemployment insurance?" What is that? I'm a sole proprietor but hope to hire a part-timer next year. Would I pay out of pocket for unemployment for part time or full time?
  5. jrs.landscaping

    jrs.landscaping LawnSite Silver Member
    from Maine
    Messages: 2,764

    I like what Duekster said. Don't lay them off, find work for them to do. We usually have them trimming branches/deadheads or working on stuff around the shop for the spring. There are many options, but telling your guys unemployment is a lazy way out find another job until I have more work, IMHO isn't one of them.
  6. Landscape Poet

    Landscape Poet LawnSite Gold Member
    Messages: 3,638

    You will pay quarterly to the state. They will send you a form would be my guess no different than they do here, asking how much the employee made for the period. Then you will pay a % of that dollar amount into them for that quarter based off the payroll dollars I believe.
    If you have a accountant you can simply send your payroll to them each week and they will hold all figures until the quarterly is do, they will then figure what you need to pay in. It is not a large factor in the scheme of things so do not worry about it being too much.

    My suggestion to you is to get a additional bank account set up for payroll taxes. This is what I do. Each week when I pay him I put his portion, my portion, of all taxes into it. Then when it comes time to pay the quarterly taxes it is not a unexpected expense that I have to worry about as the money is already there and accounted for. Keeps things simple.
  7. neighborguy

    neighborguy LawnSite Member
    Messages: 186

    As someone who has worked for others; the seasonal layoff is normal here in Wisconsin. If I ever had an employer tell me to get a job for the winter I would listen, but then start looking for the next spring right away. Your boss is your boss at work. As soon as you tell me you have no work and I am laid off, that is my time. I also realize that in the northern climates snow plowing can keep guys busy. If you do plow you can lay them off but make sure they understand they need to be available for snow. If you do not need them for snow, they can do as they please.
  8. Ex Mark Loyal Customer?

    Ex Mark Loyal Customer? LawnSite Member
    Male, from Southfield
    Messages: 2

    Why not make them a yearly contract with a pay bump that would be less than letting your UI premium kill your business with the full time employee payouts?
  9. jbell36

    jbell36 LawnSite Bronze Member
    from KANSAS
    Messages: 1,416

    i agree...but i want to clarify one thing...two of our main employees want of them would be happy to work all winter if we have the hours and asked him to, but the other would rather sit at home and collect UE...that's what i mean by lazy, and i'm sure anyone who has had multiple employees knows what i'm talking about, and obama would gladly take care of them...

    there's two types of employees out there...
  10. newz7151

    newz7151 LawnSite Silver Member
    from Tejas
    Messages: 2,419

    ... if you never officially FIRE them or release them, say you keep them on part time at 20 hours a week or something through the winter, then i don't believe they would actually be able to file for unemployment if they QUIT and you have a signed affidavit from them (made by you) stating that they chose to leave their employment and that you did not fire them. The "through no fault of their own" thing is a bunch of crap because even if they were constantly late or refused to do work or perform to the level you need, they'll still end up being granted unemployment because the crap is always on the side of the lazy worker instead of the now hurting employer.

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