While you might’ve heard about unemployment benefits, it’s likely you aren’t completely sure how they work. The idea is simple enough: When an employee is let go at no fault of their own, they are entitled to unemployment insurance, a temporary federal-state program. Former employees apply through their own state and receive benefits for a set amount of time or until they find new employment. Determining how unemployment benefits are decided is a little more complicated.
Owning or running a business means you must be aware of all the legislation that affects your operation and bottom line. Tax law is no exception. To help project your revenue, you must be aware of what is coming out of your company earnings. One such deduction comes from the Federal Unemployment Tax Act, or FUTA.
Imagine trying to watch a hockey game without a rulebook. It would be chaos on the ice with hockey players all over the place, continuing to skate, passing the puck after the whistle, and getting checked every five seconds. Guidelines exist in sports for a reason and they should exist in your company as well.
Managing one unemployment claim can be stressful and confusing for your company. When layoffs or downsizing leads to a high volume, the process can become a nightmare. You need to monitor the claims that are filed and determine how many, if any, need to be contested. There are deadlines that can’t be missed that can lead to more issues on your end. Realizing the work ahead, here are some tips for juggling your unemployment claims.
Letting an employee go doesn’t always mean your relationship is over. The Social Security Act enables them to file for unemployment insurance to help them make ends meet between jobs. Fortunately, you’re paying into federal and state taxes to cover these costs; however, this isn’t where your responsibility ends. As soon as you receive notice the former employee has filed, these are steps you need to immediately take.
More than 80 years ago, Franklin Delano Roosevelt established the Social Security Act to provide for the general welfare of workers. Most commonly, you see this related to the Social Security benefits people receive after retiring, but it covers other workers’ benefits, such as industrial accident victims, assistance for mothers and children, and unemployment insurance.
When an employee is let go, they have several options to receive income during their period of unemployment. One option is unemployment insurance, where a former employee of a company is paid a percentage of their wages for a period of time between jobs. As an employer, here’s what you need to know about unemployment insurance and how it affects you.