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Unemployment Insurance MGMT 4030 - Managing Employee Reward Systems

Unemployment Insurance MGMT 4030 - Managing Employee Reward Systems

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Page 1: Unemployment Insurance MGMT 4030 - Managing Employee Reward Systems

Unemployment Insurance

MGMT 4030 - Managing Employee Reward Systems

Page 2: Unemployment Insurance MGMT 4030 - Managing Employee Reward Systems

Unemployment Insurance: Purpose Partial Replacement Income for

Unemployed Workers Maintain Buying Power to Stabilize

Economy States Allocate Unemployment

Insurance (UI) Payments UI Tax Paid By Employer Only

Page 3: Unemployment Insurance MGMT 4030 - Managing Employee Reward Systems

Funding of UI

Tax Rate Averages 6.2 % of first $7000 of Earnings

Federal Government Receives 0.8% Taxes Are Experience Rated for State

Fund Can Range from 0% to 10% for States

Page 4: Unemployment Insurance MGMT 4030 - Managing Employee Reward Systems

UI Benefits

Cover Basic Living Costs Usually Less than 50% of Lost Earnings

– Much less for higher income levels Provides Incentive to Return to Work Benefits Last for 26 Weeks

– possible extension for 13 week periods if high unemployment in local region

Average Benefit - Aprox. $115/week

Page 5: Unemployment Insurance MGMT 4030 - Managing Employee Reward Systems

Eligibility for UI

Available and Actively Seeking Employment

Work a Minimum of 4 out of 5 Quarter Year Periods

Earn a Minimum of $1000 During Combined Periods

Employee Left Job Involuntarily

Page 6: Unemployment Insurance MGMT 4030 - Managing Employee Reward Systems

Disqualification for UI Benefits Voluntary Quit - Except for Good Cause

– Ex: Sexual harassment, hostile work environment

Discharge for Gross Misconduct– Ex: Theft, drug use, dishonesty

Employee Turns Down a Comparable Job Employee Participates in a Strike

– Strikers may receive strike benefits from union

Page 7: Unemployment Insurance MGMT 4030 - Managing Employee Reward Systems

Managing the UI Costs Human Resource Planning

– retraining, flexible pay systems, or use of severance pay which precludes use of UI benefits.

Consider Temps or Consultants for Short Term Work - buffers the jobs of full-time employees.

Conduct Exit Interviews With Discharged Employees - make them aware of intentions of a claim challenge if not eligible for UI.

Audit All UI Claims and Challenge Questionable Ones

Page 8: Unemployment Insurance MGMT 4030 - Managing Employee Reward Systems

Critical Thinking Questions: Is Employee Eligible for UI Benefits?1. Employee’s health requires that he quit job

temporarily.2. Worker is discharged for being incompetent

due to lack of training or education.3. Employee Refuses to work a different shift or

overtime without a good cause.4. Incarceration after violating any law.5. Treatment for alcoholism or drug addiction.6. Lack of transportation to the job.7. Quitting to marry and follow spouse to

location.