Are you doing everything in your power to drive profits for your CT business?
If you’re developing new ways to increase revenues, that’s fantastic! But don’t forget the other side of the “profitability coin” – decreasing expenses.
Unemployment taxes are one of the few taxes (read: expenses) you can directly control. Even a small modification in your unemployment tax rate can have a big impact on your overhead – and ultimately, your profitability.
So are you doing everything possible to keep them under control? Consider these tips from A.R. Mazzotta:
- Create consistent, detailed paper trails. Everyone knows they should do this, but do you have the right processes in place? And are they followed every time? Whether you’re conducting a performance review, taking disciplinary action or terminating an employee, adhere to best practices for documenting these important events. Many times, documentation is the only means an employer has to back up the decision to terminate. Make sure you create solid paper trails to protect yourself as an employer.
- Solidify and standardize hiring practices. If your business can build a history of few unemployment claims, it may be able to reduce its unemployment tax rate. So find ways to hire smarter. Use consistent screening processes, including pre-hire skills assessments, character screenings, drug tests and thorough background checks to thoroughly vet your candidates. If you don’t have the time or internal resources to manage these on your own, work with a leading CT staffing and employment agency like A.R. Mazzotta.
- Reduce turnover. Connecticut’s state unemployment tax (SUTA) imposes on employers a tax rate on the first $15,000 of wages paid to each employee per calendar year. The tax rate is in the range of 1.9% to 6.8%, based on your company’s experience. A new employer is taxed at 4.5%. In addition to this tax, CT employers were charged a Special Assessment in August 2012 and 2013.
- Another component to unemployment taxes is the Federal Unemployment Tax Act (FUTA). For 2013, CT employers are required to pay 1.2% on the first $7,000 of wages paid to each employee per calendar year. Between SUTA & FUTA taxes, CT employers are responsible to pay in the range of 3.1% to 8% as described above for 2013.
- So if a single employee holds a position for the entire year, you pay unemployment taxes only for that employee. But if three employees hold that position within a single year, you may have to pay up to three times the amount. Reducing turnover will help you control your total unemployment costs.
- Carefully audit benefit charge statements. We’re all human and we all make mistakes. Processing countless claims, government workers do make clerical errors, assigning unemployment claims to the wrong employer or charging employers for workers’ claims that have been disputed and rejected. So be proactive. Diligently audit the benefit charge statements you receive to ensure that every claim is legitimate.
- Consider re-employment strategies. If you are forced to lay off a large number of employees, it may make financial sense to offer outplacement, job coaching or other re-employment services. Helping employees transition to new jobs can control the duration of non-protestable claims – those claims that typically result in the longest duration and highest total benefit payout.
Staffing Services – a smart way to control unemployment costs
A.R. Mazzotta’s CT staffing services can help you control your unemployment costs by breaking the hire/layoff cycle. Whether your production levels vary by season, or you’re suddenly faced with a huge project, we provide flexible access to the area’s best talent – for as long as you need it. Once your demand returns to a normal level, we handle worker reassignment for you.
The bottom line? When you use temporary staffing, you pay only for productive hours worked. Managing unemployment claims for temporary staff is our responsibility, not yours. You get the reliable, experienced help you need, while keeping unemployment taxes to a minimum – and that’s great for your profitability.