Some tips to control your unemployment costs.

Has your business recently seen an increase in unemployment insurance taxes? You’re not alone. The good news is there are some steps you can take that will help your company control unemployment insurance costs.

Sometimes unemployment benefits are necessary. When an employee loses their job through no fault of their own, unemployment insurance can help them stay afloat until they find other employment. So maybe the problem isn’t in the cost of the insurance, but the rate at which it is being used? Here are a few tips you can use to decrease the likelihood that unemployment insurance will be needed:


Don’t jump into interviews unprepared and don’t let just anyone do the interviewing. Hiring smart means you take the necessary steps to avoid making a bad hire and paying the consequences. When you hire smart, you’ll decrease your chances that your candidate won’t be a good fit.  The best advice is to take your time. Never hire in a hurry. 


Performance reviews are an opportunity to learn and grow. Don’t steal that from any of your employees. From the first day on board, every employee should be aware of their specific expectations and what repercussions may incur if they aren’t meeting those expectations. If an employee must be terminated, make sure you have given them adequate warnings and they are provided the time and resources necessary to improve their performance.


To avoid future problems, be sure to train your employees properly. Safety, anti-discrimination, and workplace behaviors should also be covered at the beginning of employment. To help with this, make sure you have an effective safety training program and a thorough employee handbook.  Ensure you have your new employees sign off on these documents and keep these records in their employee file.


Your business should have a strict disciplinary action policy that all leaders follow. Even in the event of a verbal warning or one-on-one meeting, everything should be documented. Including date, time, people involved, and anything that was discussed including comments. Deal with the disciplinary procedure before you must use it.


Ultimately, if you must resort to termination, document everything. You should already have documentation of the warnings and disciplinary actions that took place leading up to termination. Since you have been consistent with your performance reviews, the employee should not be surprised of the termination. Even so, don’t miss any steps. Provide the employee notice of the termination as soon as possible. Some states have different laws stating when an employee must be notified and when they must be paid out any remaining compensation. You should also consider an exit interview.


If there is a claim for unemployment benefits, provide all necessary documentation and information right away. Promptly doing your part in the situation is your best shot at a fair outcome. If the employee was terminated, provide documentation proving warnings and time/resources provided to rectify behavior. However, if the separation was voluntary, provide the unemployment agency the employee’s letter of resignation and documentation of the exit interview.

Generally, if an employee quits their job, they are not eligible for unemployment benefits. However, “he said, she said” type situations can happen. If you can’t provide proof showing the employee did leave voluntarily, they will likely be granted benefits. So, getting a resignation notice or letter and keeping any text or email messages regarding the separation is important.

As always, please reach out to UCM with any questions or concerns regarding any specific situations as soon as possible.