Small Business Series: 4 Ways to Reduce Your Unemployment Tax
When an employer needs to lay off an employee, it can be a difficult decision. However, there are steps that the employer can take to limit the use of unemployment benefits by the laid-off employee. Here are four strategies that employers can consider:
Provide Severance Pay: Employers can offer a severance package to employees who are laid off. This can include a lump sum payment or continued payment of salary and benefits for a period of time. By providing a severance package, the employer can incentivize the employee to find a new job quickly and reduce their reliance on unemployment benefits.
Offer Outplacement Services: Outplacement services provide support to employees who are laid off, including assistance with job search and resume writing. By offering outplacement services, employers can help their former employees find new employment more quickly, reducing their reliance on unemployment benefits.
Implement Shared Work Programs: Shared work programs allow employers to reduce employee hours instead of laying off workers. Employees can receive partial unemployment benefits to supplement their reduced wages. This can help the employer retain their workforce and reduce the number of employees who are collecting full unemployment benefits.
Contest Unemployment Claims: Employers have the right to contest unemployment claims if they believe that the employee was terminated for cause or voluntarily quit their job. Employers should document the reasons for the layoff and be prepared to provide evidence to support their case. Contesting unemployment claims can limit the use of unemployment benefits by the laid-off employee and reduce the employer's tax liability for unemployment insurance.
It’s a well known truth, laying off an employee is never easy, but there are strategies that employers can use to limit the use of unemployment benefits by their former employees. By providing severance pay, offering outplacement services, implementing shared work programs, and contesting unemployment claims, employers can reduce the financial impact of layoffs on their businesses and employees.
