Tip of the Day

Lowering Your Unemployment Compensation Rate

The percentage amount of tax your opeation pays into the state unemployment compensation fund is directly dependent on your unemployment compensation history.  The more employees you lay off or terminate through no fault of their own, the higher the tax rate you pay.

Even employees who voluntarily quit can file for unemployment.  If they claim abuse, retaliation, or any other excuse that forced them to voluntarily quit, they may still get a hearing.  If your operation doesn’t attend the hearing or cannot refute the former employee’s allegations with written documentation, he or she may still be awarded unemployment compensation, thereby impacting your tax rate.

The best way to avoid unwarranted unemployment claims against your enterprise is to:
  • Properly and consistently document all misconduct and poor performance,
  • Ensure that performance reviews and performance discharges are consistent in documenting and informing the employee of the performance issues,
  • Routinely document all terminations with an Employee Separation Document, HRI Form 117 , and
  • Attend all unwarranted unemployment claim hearings to refute employee allegations.
While all hospitality operations pay state unemployment taxes based on the amount of their payroll, the tax rate assessed is totally up to the individual property and its diligence in documenting terminations and refuting unwarranted claims.