Question

Over the past two years, Kermit Stone, the controller of Hilton Company, has been concerned that the company has been paying a large amount of money for state unemployment taxes. On reviewing the “unemployment file” with the head accountant, Deborah Murtha, he learns that the company's tax rate is near the top of the range of the state's experience-rating system.

After calling the local unemployment office, Stone realizes that the turnover of employees at Hilton Company has had an adverse effect on the company's tax rates. In addition, after consulting with Murtha, he discovers that the eligibility reports that come from the state unemployment office are just signed and sent back to the state without any review.

The eligibility reports are notices that an ex-employee has filed a claim for unemployment benefits. By signing these reports “blindly,” the company, in effect, tells the state that the employee is eligible for the benefits. Any benefits paid are charged by the state against Hilton Company's account.

Submit recommendations that might help Stone reduce the burden that the unemployment compensation taxes are leveling on Hilton Company.

Answer 1

Some Recommendations that might help Stone reduce the burden that the unemloyment compensation taxes are leveling on Hilton Company are:

• Employers, who are proactive in their employee hiring, disciplinary and termination processes, as well as in their management of employment claims, stand the best chance of improving their experience rating, the rating that determines each company’s unemployment tax rate.
• Avoid Blind Signing of eligibility report will also help in reducing the number of past employees who are taking unemployment benefits.It is vital to make sure your business is in best arrangement to dispute any and every wrongful unemployment claim made by your ex- employees – and the best way to do this is to maintain broad and thorough written records and to never miss significant deadlines associated with filed claims.
• Keep clear documentation of your employee policies, changes in these policies, written warnings issued to employees, and any records or evidence of employees breaking your company policies. All of these documents will help you in the event that you need to prove an employee was terminated for misconduct.
• Consider investing in hiring a third party to manage your unemployment claims for you. lots of human resource, payroll and financial management firms offer unemployment services that can help employers improve their hiring, disciplinary and termination processes and the associated documentation and can also handle all of the paperwork and appeals associated with unemployment claims.
• Employers can avoid the brunt of these costs by helping laid-off workers find new jobs as quickly as possible through effective outplacement assistance. This can dramatically reduce their taxes, while making their former employees happy as well.