How Much Are Your Unemployment Claims Costing You?
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How you are handling your employee onboarding, management and termination procedures make a HUGE difference in your experience rating and how much you pay to the state each payroll.
State Unemployment Insurance (SUI) is a cost of business, like Workers' Compensation or liability coverage. But, believe it or not, it's a cost that you as an owner have a great deal of control over. Your policies and procedures have a big impact on your experience rating and your bottom line.
What Is An Experience Rating?
Experience rating is the method by which employer contribution payments under the State Unemployment Compensation laws may be varied on the basis of each individual employer's experience with unemployment. Experience rating is based on the proposition that the cost of unemployment compensation should be paid in such a way that those employers whose workers suffer the most involuntary unemployment should pay at a higher rate than those employers whose workers suffer little involuntary unemployment.
In plain English: The more successful claims you have against you, the higher your rate. Much like a credit rating, those who manage their staff in such a way to avoid unemployment claims (much like those who pay their credit card bills on time and stay within their credit limits) enjoy significantly lower rates than those who don't have a solid system in place.
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