For many employers (most actually), protesting unemployment claims that should not be paid (based on the separation reason) is a source of frustration and seems to be a study in futility – after all, the average employer only wins about half the time. Some employers get so frustrated with the process and with losing that they stop protesting altogether. Why do employers lose protests? Well there are several reasons for it:
Well, it is getting close to tax time for most businesses and Americans – it is also getting close to the time when most companies receive their new (2015) unemployment tax rate notice. Many companies will then suffer through something that I like to call “UI tax rate sticker shock” – their new tax rate will have risen more than they thought and likely more than was budgeted. For many employers, unemployment taxes have become the second highest employer tax, right behind FICA.
Of all the ways to control your Unemployment Insurance (UI) costs, none are more critical than winning the majority of your protests to the UI Agency. I have spoken to numerous employers who win less than 50 percent of the claims they protest (and a few even have confided that they seldom win). Why are these employers not winning the protests that they send in – there are several possible answers to this question:
Because, for most employers, unemployment taxes are a high cost item – often reaching tens or hundreds of thousands, and in some cases, millions of dollars, it is critical to protest improper claims – and win! However, winning UI protests is not as easy at it sounds – the average employer wins about 50 percent of the protests they file. Why so low, you might ask – because most employers don’t try to win the case until the claim is filed. In reality, the process should begin long before the separation – it should begin the moment an employee is hired.
Unemployment Insurance (UI) hearings can often be a confusing and intimidating for employers. Essentially it is a mini courtroom trial either held in person or by telephone. Either way, it can be a serious headache for employers who enter unprepared – an unprepared employers usually lose. The following tips on UI hearings can make the process a bit easier for you (as an employer) and could also help produce a better outcome.