Total Tax
July 2010
Coaching and Counseling
With so many pressing business issues, the last thing there is time for is the proper coaching and counseling of employees along with the documentation. Although the time spent seems tedious, consider it an investment in your business or position. You will reap benefits in the future.
When an employee separates from your company, there is a good chance that the employee will file a claim for unemployment benefits. When the claim is issued, the state agency looks to the employer (or ADP as your agent) to supply information about why the employment came to an end. In claims relating to lack of work, the information is usually simple. However, the issues become more complex in cases where an employee is discharged due to poor performance or voluntarily leaves due to dissatisfaction. Proper documentation can make the difference in whether or not an employee is awarded unemployment benefits; therefore, be sure you are not rushing to gather documentation after the claim notice is received.
What You Can Do
If you notice changes in an employee’s behavior, for example, poor performance or lack of motivation, it is important to address any concerns with the employee. By being alert to employee behavior and acting on inconsistencies, you may be able to redirect the behavior through coaching and counseling. In addition, you are documenting useful information which may be beneficial in the future.
Consider behavior such as a tenured employee whose performance has slipped, or an employee who is “skirting” the rules on a regular basis by arriving to work a couple of minutes late each day. You may need to have a “friendly chat” with either employee about the job rule, performance, expectation, or any other concern. It may be necessary to remind the employee how important he or she is to the business. By bringing the unacceptable behavior to the employee’s attention, discussing reasons for and effects of the behavior, as well as consequences for not changing it, you can give the employee an opportunity to correct the behavior. If the employee’s performance does not improve and the employee chooses to leave the employment, it can be shown through your documentation that the matter was addressed and steps were taken to salvage the employment.
If you do not make an effort to identify and correct performance issues, you are putting yourself at risk. By not addressing the situation through documented coaching and counseling, the employee can come to believe that the behavior is acceptable because it has been condoned. If the employee is ever discharged, and the overlooked behavior becomes part of the reason for separation, the lack of coaching and counseling will actually be used against you when determining the employee’s eligibility for unemployment benefits. A failure to act on your concerns and address performance issues may result in separation and unnecessary costs.
The Results
It takes time to prepare, coach, counsel, and to complete written documentation. However, the benefits received can be significant. For example, if the employee’s performance improves, the business is better for it. If the situation still ends in separation, at least you were prepared and can provide useful documentation. You, as an employer, pay the taxes that are used for unemployment benefits, and each claim paid out against your potential unemployment tax account can possibly raise your tax rate the next year and for years to come.
The best way to keep unemployment taxes under control is to use sound management practices in hiring, counseling, and separating employees. Your ADP-UCS Client Service Representative would be happy to discuss techniques for proper documentation or coaching and counseling. Remember, with unemployment benefit insurance claims, it is all about documentation and the time spent preparing it is time well spent.
Legislative Highlights
Unemployment Insurance Extensions
The most recent extension of unemployment insurance (UI) provisions originally included in the American Recovery and Reinvestment Act (ARRA) was adopted on April 15, 2010, and extended benefits as follows:
For claimants, the period during which they can file for Federal Emergency Unemployment Compensation (EUC) and qualify for Federal Additional Compensation (FAC), the extra $25 per weekly benefit amount, was extended to weeks beginning before June 2, 2010. The period during which claimants may claim and be paid EUC/FAC was extended to November 6, 2010.
For employers, the period during which weeks of regular federal extended benefit payments (EB) would be 100% federally reimbursed was extended to June 2, 2010, with the state option to continue the extended period for payments to November 6, 2010. After that date, EB payments would be 50% chargeable to employers.
As of the date of this publication, the Senate is reviewing other proposals for extending these benefits retroactively, possibly through the end of calendar year 2010. The additional spending related to the EUC/FAC extension would add to the general federal deficit. The extension of the 100% federal reimbursement of EB would add to the deficit in the federal EUCA account, which is funded by employer paid FUTA taxes. Proposals for increasing the current 6.2% FUTA rate (5.4% net rate) are under discussion and employers should also expect increases in state UI taxes as UI trust funds continue to be depleted by the increased duration of UI benefits per claimant.
Florida Additional Employer Response Time
Florida Senate Bill 1736 was adopted on May 17, 2010, and increases the time frame in which an employer may respond to the Determination Notice of Unemployment Compensation Claim Filed, UCB-412. Effective July 1, 2010, the employer must respond to the notice of claim within 20 days after the mail date of the notice, or in lieu of mailing, within 20 days after the delivery of the notice. If a contributing employer fails to timely respond to the notice of claim, the employer’s account may not be relieved of benefit charges. Until this new law goes into effect, employers must continue to respond within 10 calendar days to be considered timely.
Appeal Deadline Extended
In Washington, DC, Legislative Bill 455 passed on May 14, 2010, extending the deadline to file an appeal to a determination from 10 calendar days to 15 calendar days.
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Unemployment Compensation Services Update is a quarterly update for ADP’s Total Tax clients to address the issues of employee personnel practices, state unemployment tax, and payroll tax filing matters. This publication is distributed with the understanding that the publisher is not engaged in the practice of law. If legal issues arise in the context of your business, independent legal counsel should be consulted.
Submit unemployment-related documents, including your company payroll code, company name, and contact telephone number on all correspondence to:
Automatic Data Processing, Inc., Total Tax Department, P.O. Box 6000, San Dimas, California 91773-9060
Hotline Number: (800) 959-6246
For even more information about our products and services, please visit our Web site at www.adp.com .