There are many challenges to operating a business. Rising product and labor costs, employee turnover rates and additional payroll and HR compliance topics add to the daily headaches of employers and managers. One added difficulty that many businesses must navigate includes unemployment claims. Let’s take a look at some tips on how you can manage unemployment claims.
What is unemployment insurance?
Before we dive into some tips on managing unemployment claims, we must first know what employment insurance is. State Unemployment Tax Act (SUTA), also know as state unemployment insurance (SUI), is a payroll tax that each state requires businesses to pay. The withholdings from SUTA are used to fund the unemployment trust run by each state. When someone makes an unemployment claim, the state uses these funds in this trust to provide benefits to that unemployed person and may affect your businesses unemployment rate. Each business with at least one employee must pay into SUTA.
How can I manage unemployment?
Due to the nature of the world we live in, unemployment claims for many businesses tend to be high. Below are some tips for business owners to help manage the number of claims in their business.
Tip 1. Have an effective hiring and onboarding process.
Hiring the right employees is key. By hiring the right people from the start, you can minimize the likelihood of future unemployment claims. Carefully screen, interview and check references of candidates to ensure they possess the necessary skills, personality and experience needed to be successful in the role. Consider using techniques to assess their reliability, teamwork, and problem-solving skills. Be sure to also check references and verify employment history to gain insight into a candidate’s track record.
Once hired, be sure to have an efficient and effective onboarding process in place. An organized onboarding process sets a strong tone for your new employees from the start. Furthermore, using an electronic and integrated onboarding software that gives employees mobile access to new hire paperwork, benefits enrollment, and more can help streamline this process. Even training new employees on the company history, culture, and how they can contribute and thrive in the company is a great way to empower and engage them.
Tip 2. Make sure employees sign your company handbook.
Establishing clear and concise employee policies in your employee handbook is crucial for reducing the risk of unemployment claims. Unemployment benefits should not be covering employees that were let go due to violation of the company’s policies.
Ensure that your business has a company handbook with comprehensive policies in place regarding attendance, punctuality, performance expectations, and a code of conduct. By having employees sign the company handbook, they are acknowledging that they must follow the company’s policies. If employees do not follow company policy and are terminated, this helps the company demonstrate that any violation was intentional. If your current handbook does not explicitly outline actions that could lead to termination, it could be wise to review and revise your policies. Be sure to update company policies at least every few years and have all employees sign the updated handbook.
Tip 3. Document everything.
Documentation will be your best friend. Be sure to document all warnings of handbook violations or performance issues. By documenting these incidents, you’ll be able to provide evidence in case of disputes or claims. This will also help create transparency, accountability, and a structured approach to managing employee issues, ultimately reducing the risk of unemployment claims and fostering a professional work environment.
How should businesses proceed?
Minimizing unemployment claims in your business requires a tailored approach and there is no “silver bullet”. By implementing the above tips of effective hiring and onboarding, introducing clear policies that your employees sign off on, and documenting any violations or issues can mitigate the risks associated with unemployment claims. Taking these proactive steps can help your business foster a productive and stable workforce while safeguarding your business.