Unemployment Compensation

1. 1

   Forty-nine (49) percent of employing small businesses had no employee turn-over in the last 12 months. Fifty-nine (59) percent experienced no quits; 73 percent fired no one; and, 87 percent did not lay anyone off for economic reasons. Still, the average number of turn-overs in the year amounted to 3.2 employees per firm.

2. 2

   Twenty-two (22) percent of small employers with one or more fired employees in the last 12 months attributed at least one of those discharges to unsafe work practices by the fired employee and 2 percent attributed at least one to harassment over sex, race, etc. • Twenty-two (22) percent of all small businesses or 41 percent of those that had an employee leave for any reason had an unemployment compensation claim filed against them in the last year.

3. 3

   Small employers usually challenge the unemployment claims they think are unjustified. Fifty-three (53) percent of small employers do not think the last unemployment claim filed against them was justified. Small employers challenged 51 percent of the most recent unemployment compensation claims filed against them.

4. 4

   The most frequent reason to challenge an unemployment claim (51%) was that an employee was fired for cause. The second most common reason was that an employee voluntarily quit (36%). The most common reason (70%) a small employer did not challenge the most recent unemployment claim was because the claim was justified.

5. 5

   Over three in four (78%) small employers challenged the most recent claim in writing only. In about one of 10 challenges (11%), the small employer or a designate appeared at the hearing. A lawyer represented them in only about 5 percent of cases.

6. 6

   Small employers, as a group, know comparatively little about the unemployment (FUTA) taxes they pay. Two-thirds could not or would not estimate the amount of FUTA taxes they pay per employee per year. Further, about half did not have a general idea of how their FUTA taxes are calculated.

7. 7

   Small employers often take steps that directly and indirectly minimize their experienced based FUTA taxes. Examples include: annually verifying their unemployment compensation account to ensure its accuracy (59%); obtaining resignation letters from employees who voluntarily quit (36%); examining every unemployment compensation claim whether or not challenged (59%); and, maintaining records of events or circumstances leading to and including employee termination (67%).

8. 8

   Fifty-six (56) percent of small businesses have written employment policies that are available to employees. Ninety-four (94) percent of those employing 20 or more have them.

9. 9

   Fifteen (15) percent of small businesses have an employment contract with one or more employees.

10. 10

    Three percent of small businesses have some unionized employees, but virtually none employ an entirely unionized staff.

Volume 7, Issue 1, 2007
ISSN 1534-8326

William J. Dennis, Jr.
NFIB Research Foundation

• 1Approximately how much PER EMPLOYEE per year do you pay in unemployment compensation taxes?
• 1aWhich would be the closest to what you pay in unemployment compensation taxes PER EMPLOYEE per year? Would it be:?
• 1bUnemployment compensation taxes per employee per year (combined results of prior two questions).
• 1cAre your unemployment compensation premiums administratively set, that is, a fixed percentage; experience-rated, that is, higher or lower depending on the number of your former employees who claim unemployment benefits; or don’t you know?
• 2In the last year, how many of your employees voluntarily quit? An estimate is fine.
• 3In the last year, how many of your employees were fired or let go for cause? An estimate is fine.
• 3aWere any of those terminations related to harassment or inappropriate conduct associated with sex, race, disability, etc.?
• 3bWere any of those terminations related to unsafe work habits, practices, or incidents?
• 4In the last year, how many of your employees were laid-off as a result of slow sales or poor economic conditions? An estimate is fine.
• 5Employee turn-over in the last year (combined results of employee quits, terminations, and lay-offs).
• 6Did any of these former employees attempt to collect unemployment compensation benefits in the last year?
• 6aAbout how many of these former employees claimed unemployment compensation benefits in the last year? An estimate is fine.
• 6bTo the best of your knowledge were any of these former employees who claimed benefits on your account unemployed because they were laid-off by another employer after he or she left you?
• 6cDid you challenge ANY of the unemployment claims made against your business in the last year?
• 6dWhich best describes your policy toward challenging unemployment compensation claims?
• 7Think of the most recent claim for unemployment benefits filed against you. How long ago was that? Was it within the last year, the last two years, the last three years or longer than that?
• 7aTo be eligible to collect unemployment compensation benefits, a former employee must be unemployed through no fault of his or her own. Given that qualification, should the most recent former employee who claimed unemployment benefits have been eligible to receive those benefits or not?
• 7bDid you challenge that (most recent) claim?
• 7cWhich best describes the reason you challenged the (most recent) claim?
• 7c1Did you challenge the (most recent) claim in writing only, by appearing at the hearing, or by having a lawyer appear at the hearing for you?
• 7c2What was the outcome of the challenge (to the most recent claim)? Did you win or did the claimant win?
• 7dWhy didn’t you challenge the (most recent) claim? Was it because:?
• 8Do you pay unemployment compensation taxes on the owner or owners who work in the business?
• 9A(employment practice) Verify your unemployment compensation account to ensure its accuracy at least once annually.
• 9B(employment practice) Periodically explore employee turn-over and the reasons for it.
• 9C(employment practice) Voluntarily contribute or prepay your unemployment compensation taxes to get a better rate.
• 9D(employment practice) Refuse to hire people with a history of job hopping.
• 9E(employment practice) Examine every unemployment compensation claim made whether or not you challenge it.
• 9F(employment practice) Review an employee’s performance just before he or she qualifies for unemployment coverage.
• 9G(employment practice) Obtain resignation letters from employees who quit.
• 9H(employment practice) Keep records of events or circumstances leading to and including employee termination.
• 10Do you have an employment contract with any of your employees?
• 11Do you have written employment policies or an employee handbook?
• 12Are all of your employees, some of your employees, or none of your employees members of a labor union in the jobs they hold at your firm?
• 12aWere any attempts made in the last three years to unionize your non-union employees?