New hire classification

NeedCoffee

Sorry in advance for the long post.

Here's a little background. Last year we had a very high number of EEs quit within 30 days of hire, despite intensive screening, background checks, mgmt training, etc. We are in a HUGE growth phase, which has also resulted in slightly increased turnover and not so great retention numbers for lower-level positions. Due to the high number of terminations, our UI tax has increased, which prompted this situation.

By boss has asked me to develop a plan where new hires are not considered employees until after 60 days of "employment." A colleague told him this was possible, and he has charged me with implementing it. Soooooooooooooo.....

Here are my questions:
(1) Do any of you wise forumites have such a practice at your company? Pros/Cons?
(2) Can we do this? I would think that employees are considered just that - employees - as soon as you hire them, after all, you'll be paying employment taxes on them. I'm thinking that there's still no way around this issue, at least for UI tax purposes.
(3) If we can do this, will any of you be willing to share language you use for this purpose? I have tried doing some internet searching, but cannot seem to find what I'm looking for.
(4) I feel like I'm missing something here - there's no reason this should be so difficult! I've been out sick for about a week - is this the medication talking?? #-o

If anyone can help me, it's you guys, so thanks in advance for your replies!

stilldazed

I'm not sure this is what you are looking for, but we have a slightly different arrangement with new hires. They are employees, of course, but we have a probationary period of 90 days. In Florida unemployment, there is an option for an employer to pay into a state fund or be billed for actual unemployment benefits. Way back in the dawn of time with my employer (of course I'm way too young to have been here), the decision was to implement the probationary period of 90 days and elect to pay unemployment by the invoice. What that really means is that we must present evidence to the new hire within 7 days of hire that he/she is serving a 90-day probationary period and if he/she leaves (voluntarily or otherwise), we simply note that the worker was in the initial probationary period on the claim when it comes through. We provide evidence that the worker's departure was within the first 90 days and that communicated the magic message within 7 days of hire, and we are not liable for unemployment with that worker during the wage window because of the method we chose to implement.

What I don't know is whether that is an option available to certain employers (we are nonprofit), restricted to certain states (may not be available in yours), or whether the benefits outweigh the risks. From my understanding, there is no levelized effect to pay the invoices from the state, so if we have a particularly expensive quarter, we have no choice but to pay for the quarter when the invoice comes due. One of the benefits, then, is that if we have lost no unemployment challenges, we have no bill to pay.

Hope that helps. Have you checked with your state's unemployment legislation or Dpt of Labor/Workforce Innovation group?

stilldazed

Oh yea, one more thing. To help formalize the process, we have an evaluation scheduled for the 90-day expiration, and the worker is either recommended to change to regular status or discharged for unacceptable performance during the initial 90-day probationary period.

best wishes

joannie

In Oklahma an employer is not charged for unemployment compensation if the ee leaves within the 1st 45 days. That said, I had the same problem in a previous HR life. We solved it by running all new hires through a temp service for the 1st 90 days. If the successfully completed the temp period, they were hired full time. We found this not only helped control or unemployment insurance costs, but our worker's compensation costs also. Good luck.

ACU Frank

Likewise... In Missouri, you would not have been charged for those employees.