We learn geology the morning after the earthquake.- Ralph Waldo Emerson, 1803 – 1882
It might be a better time to review your unemployment insurance rate before you receive your next rate notice. In Colorado, rates are assessed once a year that cover the period January 1 to December 31. The period in which the rates are based on is the prior year beginning July 1 to June 30 so if someone is separated and they start receiving insurance in August, your experience rate won’t be affected for almost a year and a half.
So how are rates calculated? There’s a macro and micro effect. The macro effect is how the fund is doing overall. In times of rising layoffs and lower employment, the fund can be swiftly reduced and the rate may go up for every employing entity. The micro effect is how many claims are filed on you as an employer. These two factors determine your rate with your own experience carrying most of the weight.
How do you keep your rate in check? If an employee resigns there is no penalty to your rate. If an employee requests unemployment benefits and you think he/she was rightfully terminated, you may contest his/her benefits by responding to the notice sent to you by the state department of labor. Don’t waste time – respond as soon as you receive the notice because the response time is very short as in seven days.
You can contest for almost all the reasons that you would fire an employee (from stealing to refusing to work a non-overtime shift), but your documentation better be good because lacking that, you will be wasting your time and no doubt becoming frustrated to boot.
The world of unemployment insurance may become a bit more expensive in the next few years. Consider minimizing your costs by hiring right and documenting behavior that impacts the employee’s job quality. Your rate will stay lower than most.
Here’s to keeping a low rate of turnover and insurance,
Bryan Dear
