Pub. 1 2018-2019 Issue 2

FOR REDUCING YOUR COMPANY’S UNEMPLOYMENT INSURANCE (UI) COSTS By Sean O’Donnell, MBA, SPHR, SHRM-CP | Human Resources Manager – W est R egion for G&A P artners U nemployment insurance (UI) is one of an employer’s most insid- ious hidden costs because many employers simply don’t understand how the UI program works or what they can do to help control these costs. Understanding the UI program UI is a tax paid by employers into a state fund to provide temporary cash benefits to workers who become unemployed through no fault of their own. In Utah, employers can pay any- where between 0.1 to 7.1 percent of the wages paid to each employee each year up to the taxable wage base (which is $34,300 for 2018). Due to the seasonal nature of the asphalt industr y, however, UAPA members are more likely to have rates at the higher end of this range com- pared to employers in other industries. To understand how much UI is costing your business this year, multiply your company’s current UI rate by $34,300, then multiply that by the number of employees you have. Tips for reducing your UI costs The good news is that once you under- stand how UI works, there are several straightforward strategies you can use to lower your company’s costs: 1. Pay UI taxes on time Employers that don’t pay their UI taxes on time (January 1 for the previous fiscal year) are charged an additional 1 percent surcharge penalty. Simply paying your taxes on time is the easiest way to min- imize UI costs. 2. Encourage employment during the off-season Some employers tell employees to file for unemployment during the off-sea- son, but this advice can be incred- ibly costly. If you are not in a posi- tion to offer off-season work, refer your workers to job placement ser- vices or help them get involved with snow removal, or temporary holiday retail work – anything that can keep them employed until your company’s next season. 3. Develop clear written policies and provide training Sometimes you have no choice but to terminate an employee for bad behav- ior. If the employee files an unemploy- ment claim, however, you may have to prove that he or she was termi- nated for cause. (Remember, UI ben- efits are only for employees who are out of work through no fault of their own.) Solid employee policies that have been communicated and distrib- uted in an employee handbook with a signed acknowledgement page can prove an invaluable tool in fighting these claims. STRATEGIES 26