Cost of hiring new employees + Cost of Training New Employees + Increase to UI Tax Accounts = TURNOVER COSTS
When hiring new employees most HR Managers factor in the hard dollar costs of training and hiring. The cost of turnover however must also factor in the cost to protest UI claims and the potential loss of paying UI claims. i.e. increase to your annual UI Tax account
Suggestions
- Take advantage of Hiring assistance programs
- Take advantage of the 90 day probationary period
- Update your Interviewing Process
Pre-employment assessments are valuable tools that can help identify candidates who are likely to succeed. Assessments should be validated, be based on objective indicators of job success and be administered consistently.
Effective interviewing can weed out candidates less likely to succeed. Interviewers should be thoroughly trained in best-practice interviewing techniques, and interview questions should focus on the actual job requirements. Candidates for the same job should be asked the same questions.
Probationary periods can be a useful new-hire best practice. Several states offer employers relief from unemployment charges for short-term employees, based on days or hours of tenure and/or maximum earnings as defined in their statute. Failure to utilize the probationary period result in the charges paid to an employee being charged to your tax account.
As specialists in UI, hiring, disciplining and terminating is our experience that if there is not a consistent scheduled 90 day probationary period review process, this benefit goes unused. Many times busy schedules can cause management to overlook the deadline of a probationary period. It is suggested that HR Managers put in place a schedule for assessing new employees at the 90 day period and have a review process that accurately rates the skills, attendance, sales performance and/or other necessary factors needed for the job.
We have found that “undesirable” behavior that is exhibited during this period remain throughout the tenure of employment. The best example is tardiness and absenteeism. There are exceptions where a warning or performance review can serve as a motivating factor to improve tardiness and absenteeism patterns but our experience has shown that when exhibited early and the probationary period benefit was unused, the claim was challenging to win in turn costing the employer in UI benefits and ultimately potentially driving up the UI Tax Rate.
States and Changes:
Alabama: Alabama has amended its regarding reasonable assurance UI Law. The changes state that employers whose employees “provide direct services to schools may not receive unemployment benefits during breaks in employment occasioned by holidays, fall and winter breaks, and summer vacation,” under the concept of “reasonable assurance” that they will return to work between two successive academic years or school terms. The State Agency is working out specifics regarding how the amendment will be implemented and for identifying affected employers. Additional details will follow as they become known.
To view the complete amendment, visit: http://alisondb.legislature.state.al.us/ALISON/SearchableInstruments/2015RS/PrintFiles/HB71-int.pdf
Idaho: The Idaho Department of Labor (DOL) recently announced a new tool—an online chat option—for claimants seeking answers to questions on the unemployment process from claims specialists. The online, real- time chat feature is available Monday-Friday from 8:00 AM to 5:00 PM Mountain time.
During the current pilot phase, online chat is only offered in English. However, the DOL hopes to expand the program to include additional languages by mid-2016. Spanish will be the first additional language.
Claimants who wish to communicate by phone can still call and speak to a staff member at 208/332-8942 during the same business weekday hours.
For more on the pilot program, visit: https://labor.idaho.gov/news/NewsReleases/tabid/1953/ctl/PressRelease/mid/3872/itemid/2878/Default.aspx
Iowa: Effective July 5, 2015, Iowa Workforce Development increased the weekly benefit amount (WBA) for claimants. Prior to the increase, the WBA ranged from $416 for workers without dependents to $511 for those with four or more dependents. The change increases the amounts to $431 and $529 respectively and applies to all new claims filed on or after July 5, 2015.
For more information, visit: https://www.iowaworkforcedevelopment.gov/iowans-jobless-and-injury-benefits-increase-0
Maine: The Maine Department of Labor has also increased the WBA for claimants. Effective June 1, 2015 through May 31, 2016, the maximum is raised from $397 per week plus $10 per dependent (but the total cannot exceed one half of the weekly benefits amount) from the previous amount of $386 per week.
For more information, visit: http://www.maine.gov/labor/unemployment/faqs.html#a5
Massachusetts
Employees will also be able to use the Massachusetts Earned Sick Time law, amending G.L. c. 149, § 148C, which took effect on July 1, 2015. The law guarantees all workers in Massachusetts access to job-protected earned sick time to care for their health and that of their families. Up to 40 hours leave under this law is also available to workers who must deal with the physical, psychological or legal effects of domestic violence. Leave is accrued at the rate of one hour of leave for every 30 hours worked. At companies with 10 or fewer employees, workers can earn up to 40 hours of unpaid sick time per year; companies with 11 or more employees must let workers earn up to 40 hours of paid sick time yearly. See: www.mass.gov/ago/doing-business-in-massachusetts/labor-laws-and-public-c….
On January 1, 2015, the minimum wage in Massachusetts increased from $8 to $9 per hour. The minimum wage increased for tipped employees to $3 per hour if: they regularly receive tips of more than $20 a month, and their average hourly tips, when added to the minimum wage rate are equal to or exceed $9 per hour. The minimum wage law increases the minimum wage to $10 per hour in 2016 and to $11 per hour by 2017.
Montana: Two Senate Bills, 85 and 105, were signed into law and became effective July 1, 2015:
- SB 85 expands the authority of the Maine Department of Labor to use the federal Treasury Offset Program to direct the offset of federal income tax refunds if the person owes a “covered unemployment insurance tax debt.” A “covered unemployment insurance tax debt” includes employer contributions, penalties and interest that are owed to the UI fund, and remain uncollected.
- SB 105, in part, renames the Board of Labor Appeals to the Unemployment Insurance Appeals Board. The law also clarifies and better aligns Montana’s exemptions of “employment” pertaining to government or non-profit entities with those of the federal government. It also limits credit or refunds on wages that were reported and subsequently used to establish benefit eligibility to 2 years. If a false claim or omission of material fact is discovered, the limit is extended to 3 years.
To view the complete statutes, link to: http://leg.mt.gov/bills/2015/billpdf/SB0085.pdf and http://leg.mt.gov/bills/2015/billhtml/SB0105.htm
Oregon: The Oregon Employment Department announced that effective June 28, 2015, the State’s maximum WBA will increase from $549 to $567. Oregon law requires this amount be recalculated annually based upon the average wage earned by workers in the state.
For more information, visit: http://lincolncountydispatch.com/index.php/business/item/5103-oregon-increases-weekly-unemployment-benefits/5103-oregon-increases-weekly-unemployment-benefits
Domestic Violence and UI Benefits
The Domestic Violence Leave Act, St. 2014, c. 260, § 13 amending G.L. c. 149, § 52E, provides unpaid leave for employees affected by domestic violence. The Act requires employers with more than 50 employees to provide 15 days of leave if an employee or an employee’s immediate family member is a victim of abusive behavior, and if the absence is used to seek medical assistance, counseling, or legal assistance, to secure housing, obtain a protective order, or appear in court. Individual employers are given discretion to determine whether such leave will be paid or unpaid. While an employer may require documentation of abusive behavior from the employee (including protective orders, court documents, medical documentation, a sworn statement of a counselor, legal advisor, or healthcare worker, or a sworn statement by the employee), the employer must keep all information related to such leave confidential unless the employee consents to disclose information, if the law requires it, or if disclosure is necessary to protect the safety of the employee or others employed at the workplace.
Employees will also be able to use the Massachusetts Earned Sick Time law, amending G.L. c. 149, § 148C, which took effect on July 1, 2015. The law guarantees all workers in Massachusetts access to job-protected earned sick time to care for their health and that of their families. Up to 40 hours leave under this law is also available to workers who must deal with the physical, psychological or legal effects of domestic violence. Leave is accrued at the rate of one hour of leave for every 30 hours worked. At companies with 10 or fewer employees, workers can earn up to 40 hours of unpaid sick time per year; companies with 11 or more employees must let workers earn up to 40 hours of paid sick time yearly. See: www.mass.gov/ago/doing-business-in-massachusetts/labor-laws-and-public-c….
Plant Closings
Workers who lose their jobs due either to plant closings (or closing of a significant portion of the plant) or to business closings triggered by NAFTA are eligible for additional pre-separation notice, many weeks of benefits and/or training.
An online version of this Guide and much more information about the UI program in Massachusetts (including the Service Representatives Handbook and DUA memoranda) are available to the public via the internet at the address above, under Employment/Unemployment Insurance.
Other areas of that website provide information on other antipoverty programs and services.
The information provided in this communication is for informational purposes only and not for the purpose of providing legal, accounting, or tax advice. The information and services UCM provides should not be deemed a substitute for the advice of any such professional. Such information is by nature subject to revision and may not be the most current information available.