Who 'pays' for unemployment in your state?

mwild31

[font size="1" color="#FF0000"]LAST EDITED ON 08-04-03 AT 05:35PM (CST)[/font][p]Okay, here's a quiz: Who 'pays' for unemployment (puts the money into the UI fund) in your state?

a. The employee
b. The employer
c. Both a & b

I had a situation a couple of weeks ago where an employee was very angry, surprise, about being let go for gross insubordination. At the exit meeting, she wanted to know where she should go to file her unemployment claim and I gave her the instructions. I also told her that I didn't think she would be eligible to collect. To which, she replied, "I've been paying into that account for years and I'll raise a lot of h$ll if I don't get my money."

This question stumped a lot of the managers in our company when I quizzed them. The answer is (in WA State), the employer pays 100%. Now, when I told the employee, she said that I was lying so I asked her if she had a payroll stub (she did) and asked her where the deduction for unemployment insurance was on her check. She couldn't find it. I did have to go to appeal with her, which we won, but the bigger question is - do you know the answer for your state?

HRsage

In CA the employer pays for it also. A lot of people confuse UI with the state DI (disability) which is what the ee's pay into. And like you said, not a lot of managers know the difference either. And next year CA will have PAID family leave beginning in July. Thankfully that is going to be paid for out of the ee's DI fund and not by the employer.

HR in CA

In California we pay 100% as well. Many, many employees think they pay in like your former employee does. The proof is in the check stub!

mwild31

It's amazing isn't it? I think we should start a grass roots campaign to educate employees and employers about who actually pays into the UI fund. I've included the information in my HR newsletter and in my management updates. Knowing that the employer pays 100% gives me added confidence when appealing claims that I think are bogus. Fortunately, the appeals go my way more often than not. x;-)


You know, I thought in CA employees do pay a little into the fund - but maybe that was the other account you mentioned...

ray a

In NY, the employer pays for the funding, too. I have run across ee's that believe UI is an entitlement regardless the reason they were terminated. Probably most people would believe that UI is funded through state taxes, much like any other welfare program that is state operated. So, I'm a little surprised your ee didn't point to the state tax deduction box and say it was part of that.

mwild31

hi ray - we don't have state taxes (yipee!!!)

Don D

I have heard that there are a few states where this is a shared-funded system but I have never heard of an employee who thought he was paying it. In this state, the FUTA taxes are 100% employer paid. If anyone is in doubt, a quick call to your accounting department will resolve it, but if it does not, a quick call (but slowly answered) to your local or state UI administrative office will solve the puzzle.

bamahr

Thinking back I have had several employees say those same words: "I've paid in" I think it is a great idea to educate the Management team. Our employees have no idea how much the employer pays for each employee, benefits, FICA, Unemployment, Worker's Compensation. I think the Managers should be aware - this topic will be included in my next Manager Newsletter.

mwild31

x:-) Happy to help!

Brad Forrister

I'd be willing to bet it's 100% employer in every state. Remember, this is really a federal program that the feds allow states to handle in their own different ways. But there's a federal UI tax which you pay every year. Your state taxes are a credit against the federal tax, but if the state tax didn't exist, you'd pay the full federal rate - something like 6.4%.

I think your employee is confusing UI and Social Security.

Brad Forrister
Director of Publishing
M. Lee Smith Publishers

mrbill

Here in Massachusetts, the employer pays 100% of the cost. It is experience rated, so the fewer claims / payouts, the lower the % cost of payroll.