Employers Should Build a Solid Unemployment Insurance Compliance Strategy
Unemployment Insurance Compliance Strategy
In today’s business environment, employers will face a variety of risks – especially when they’re faced with the unemployment insurance compliance process. To protect against these risks, every employer should have an unemployment insurance compliance strategy. A well-planned strategy is essential to help you avoid the impact of erroneous UI claims and can help reduce your state tax liability.
Although federal UI tax rates are stationary, state UI tax rates are not. They fluctuate based on the number of successful UI claims from your former employees. Unemployment claims can damage your bottom line, so effectively keeping a limit on how many occur is critical.
It’s common knowledge that overpayment errors with UI claims do happen quite often. In fact, the latest statistics from the U.S. Department of Labor show that last year, at least 15 states had overpaid unemployment insurance claims.
It’s clear that erroneous UI benefit payments place an unnecessary cost-burden on companies. Often times, when an employee files an UI claim, it may be up to the employer to spend more money on proving that the claim should be denied. If your business has not kept sufficient records or your employees are not available to attend a hearing (or a telephone court hearing), your business cannot take on that cost burden.
A well-planned strategy is essential to help you avoid UI costs.
As part of your unemployment insurance compliance strategy, you should:
- Fully understand your state’s unemployment system
It’s best that you learn all of the UI regulations in your state. In order to be eligible for UI benefits, some states require that employees have worked with your company for a specific time period, or have received a certain amount of compensation. Incorporate good employee-related data systems that will help you track the important details of your employees.
- Make sure you document everything
It’s common for employers to contest UI claims and they often need to present evidence by providing solid documentation. There should be adequate systems in place to document any employee warnings or disciplinary actions. It’s crucial to have easy access to relevant employee-related data and records.
- Should you be required to contest a UI claim, be prepared
It’s important to that you contest unemployment claims in a timely manner. When an ex-employee files for UI benefits you will receive a notice of the claim. It’s important that you act quickly because you typically only have 7 to 10 days to collect documentation and contest the claim in writing. You will lose the claim if you fail to respond in time because you haven’t carried your burden of proof.
No matter what state you do business in, it’s easier to navigate the unemployment insurance compliance process when you have an experienced third-party to support you. Industrial U.I. has years of expertise helping businesses manage their UI claims. Contact us today for more information on our services.