Unemployment Benefit Payout Changes & How To Deal With Them

Discussion in 'Business Operations' started by Horizon Jay, Dec 17, 2012.

  1. Horizon Jay

    Horizon Jay LawnSite Member
    Messages: 85

    Hello all! I am a newbie to the site. (signed up today actually as I am scrambling for some info) This is a pretty localized post concerning Indiana legislature changes but keep reading as some of you may be faced with similar issues in the near future, or may have already. Basically I am finding out now (yes I should be more active with law changes etc so please don't respond with that helpful info) that on July 1st our unemployment benefits payout plan was changed. A seasonal employee no longer qualifies for "special" treatment. A call back date does not matter. Currently in Indiana the unemployment benefits are based off of income earned from July 2011-June 2012. The total earned income is divided by *52* and then multiplied by 0.47 . Which we are finding out means you dont get paid $%#&. This is creating problems for us. It used to be based on time off and call back date. The total was divided by 12 or 16 and meant much larger checks. We are a small company and cannot afford to keep our employees busy year round. We do Christmas lights, snow removal etc but our revenue does not provide enough room for a lot of shop work. So like most landscape contractors in my area, we lay off our employees in the winter (subject to call back for snow, if & when it snows). So now my employees are finding out that their benefits have been cut in half (in some cases more) and most are receiving $100 or less a week. This is a drastic change from what they were earning in the past winter months and comes as quite the shock. I look like the bad guy (for not being better informed on legislature and providing no notice/// LESSON LEARNED) and now they HAVE to look for a job. They cant live off of the measly checks they are receiving. So now I'm in a bigger pinch. If it snows, I need employees. If they find better jobs, they might not come back. This has basically created major issues with not only my co but other local seasonal & landscape co as well. The only way to change this is for us to contact our state representatives and let them know: This is not working! If your in Indiana and faced with this please respond or contact me. If you are in another state and have HELPFUL advice on how you have dealt with similar issues please chime in. Thank you!
  2. Kelly's Landscaping

    Kelly's Landscaping LawnSite Platinum Member
    Messages: 4,725

    Wish they would do that here top rate unemployment here is like $550 a week and my guys typically get $400. So they have 0 incentive to look for work and all choose to sit on their butts for as long as possible. It's a corrupting system when the government subsidizes their vacations. Why I can understand your snow concerns if I were you id prefer lower unemployment insurance rates that would result from lower pay outs.
  3. Horizon Jay

    Horizon Jay LawnSite Member
    Messages: 85

    Thank you for your response! I understand your point of view & trust me, I am all about saving money! Maybe I am too nice but I feel as though I have shafted these guys. I promised my foremen unemployment. I just laid the last foreman off on Friday and now we are finding out he's not going to be collecting more than $100 a week. He just had a baby and rented a house so this doesn't bode well. Basically I'm giving him his last check this Friday and sayin, "Good Luck, See you in spring." If everyone finds a job and we actually get a lot of snow I am going to be scrambling to find help (not to mention train them). I would rather pay to keep the people on call than scramble to fill their spots when it snows. I typically only keep 2-3 employees through the winter so our rates are still reasonable.
  4. jc1

    jc1 LawnSite Silver Member
    Messages: 2,163

    Based on the formula you provided you are saying he only will get $100 a week?
    That means he only makes slightly more than $200 a week average or $10,500 annually? Something doesn't add up. Are they being paid all on the books?
  5. Horizon Jay

    Horizon Jay LawnSite Member
    Messages: 85

    Yes all on the books. Last year unemployment for one foreman was $300 a week. This year after tax and support he is looking at $100 take home. (So yes other variables apply) But we are dealing with major changes here. I spoke with another local friend that is in lawn care and he is stressing about the same thing. How do we keep the employees we actually want to keep? I can't afford the year round payroll and never had to worry about it before. Had I known this was going to be an issue I could have planned/prepared for it. In the past it was a no brainer. Lay em off. Call em back for snow and back to work in March. It's just a stressful situation for everyone. Them financially and me mentally. Do me wrong and I have no qualms cutting u loose. Be a great worker for years and I feel obligated to make sure your taken care of.
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  6. neighborguy

    neighborguy LawnSite Member
    Messages: 186

    jc1, I was kind of thinking the same thing. The only explanation I could come up with if the formula does not include previous unemployment. If the employees were laid off for 4 months they only earn income in 8 months. I agree though that $10k sounds pretty low, especially for a foreman.
  7. Horizon Jay

    Horizon Jay LawnSite Member
    Messages: 85

    Thank you all for tour feedback! i like this site already. I agree . no one would run a crew and bust their ass for 10k. We are going into our 9th year so I am still "new" compared to some of you but far from a green horn. i should add that I am not sure how the benefits were figured previously. (We are talking a 4 year employee which is hard to come by these days!) This year they have my attention. It seems like I pay unemployment all year and now they are deciding how it is spent. I realize they always have controlled it but this payout plan is ridiculous. The way their payout is calculated and the employee return to work date means that there is no way they will get all that money (the 52 week payout breakdown insures that). So where does the rest of the money go? The state Christmas party? If my comments are laughable then have a laugh. Just know that I am on the fast track to understanding unemployment tax and pay out to a T. Before it always worked so I just payed it. It's not working now so it has my undivided attention. Thanks to all!! Feel free to chime in! I freely admit that I do not know everything! Thank you MODs for moving this thread and not deleting it.
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  8. seabee24

    seabee24 LawnSite Senior Member
    Messages: 619

    I keep my better guys on all year, in fear that I could loose them if I don't. I pay a small salary equal to around 32 hours per week. I require them to work an average of 32 hours per week. Some weeks more, some weeks less, but they still get the same check.

    This was only possible because I take on seasonal snow accounts .
  9. KS_Grasscutter

    KS_Grasscutter LawnSite Gold Member
    Messages: 3,338

    Is there anything you could have them do in the shop on the side? Maybe build a couple trailers or restore an old pickup to resell? Would it be feasible for you to buy a cheap house for a rental and have the help spend the winter remodeling when they're not doing snow removal? Even if you can only give them 25 or 30 hours thats better then what they're getting from unemployment.
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  10. RodneyK

    RodneyK LawnSite Senior Member
    Messages: 784

    It is a mess for Indiana guys. You are not the first one just finding this out either.

    The best idea I have heard is to work your contacts and find someone who needs some contract labor. You supply the labor, you bill the company and keep your guys on the payroll.

    I am not sure if it is ever going to snow either! I do not know what you could have done to prepare either. Charged more for jobs and saved enough to keep them on board?

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