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  1. #1
    Join Date
    Apr 2011

    How much does your Unemployment Insurance really go up after a claim?

    What is the name of your state (only U.S. law)? PA

    I have been working full time for a small business owned by family since June 2010. My wife has also been working part time. This time of year is their down time until June/July, but we had been given several projects to complete that require long term commitment. We do have other freelance work and a small business of our own, so even though they pay us min. wage it was not a big deal and we were happy to do work for them that we customarily charge much higher rates for (we were also able to telecommute). Unfortunately they are our only STEADY income until the business venture starts bringing in profit, and the freelance projects are come and go.

    Yesterday, we were informed that we are now laid off. Probably until Fall. There was absolutely no warning as there are other employees they have kept, and we were just asked to look into a new project that no one else there can even advise them on. I know that this is the result of a genuine money crunch, and that they will hire us back at some point, but that point might not be until August. I mentioned calling unemployment to another relative on the phone (who also works for them in-house) and she got very flustered and mentioned that it would DESTROY their finances if I did that and I could basically kiss any warm fuzzies or hope of getting re-hired goodbye.

    They are NOT a big company, but they do have a couple of full time employees and a handful of part time or seasonal ones who work on occasion. One one hand, I am a tad upset that we got NO notice about this...they presumably knew that they were running out of cash and could have at least prepped us for that eventuality rather than give us new long term projects up until the day before. We are properly employed, not "contractors" and at no point was there talk of being anything but regular hourly folks. We also have children to feed while we scramble for an extra big project or a job, and my wife is 35 weeks pregnant. Yay.

    Now I have to decide whether to file and get some short term help with the uncertainty and thereby cut off a nice long term income boost since they will NOT rehire me and piss off everyone we'll be seeing at Easter OR I can not file to preserve the family accord and get rehired in 3-6 months (hopefully) and keep my fingers crossed for an AMAZING freelance job or try to find a place that will hire me around the hours I already put into my own small business while also being OK with a few possible call-offs when my wife gives birth.

    Will their unemployment Insurance REALLY go up by that much for one additional claim of full time minimum wage employment? I know they have at least one claim from the past and I'm told it really made them upset, but I don't know how much this kind of thing will really cost them to determine whether I have sympathy for that or not. At this point I could go either way on filing, but I don't want to cause them too much hardship.

  2. #2
    Join Date
    Oct 2004
    small town, PA
    There's a formula.

    Having said that, your employer (and you, in PA) have paid into the UC fund and you are entitled to benefits in this case. That's what the fund is for.

    You have not won the law suit lottery; in fact, you haven't even won the law suit scratch-off.
  3. #3
    Join Date
    May 2009
    If they have, as you mentioned, several seasonal employees, and they have had only one claim in the past, they are probably in violation of the state's unemployment laws already, because they may be discouraging their seasonal employees from signing up for benefits when they are completely and legitimately eligible for them.

    By its very nature, a business that has seasonal employees should have employees who sign up for unemployment insurance each year when the season ends. This would be allowed for in their unemployment tax rates. For example, construction trades based on the weather will have higher rates, a seasonal business such as a swimming pool or a drive in movie will have higher rates to begin with. There is a basic rate that is assigned to new employers when they begin business. This is partly based on the size of the business and partly on the type of business it is. If they have ever had anyone who signed up, their rate will be raised slightly over the tax rate of a business who never had anyone sign up, but then your signing up, and your wife's should not move them much above this second rate that has been assigned to them.

    This cost of their unemployment taxes for seasonally laid off employees, or people they can no longer pay, like yourself and your wife is a cost of doing business. If they can't pay the legitimate costs of doing business, then they do not need to be in business. It is on par with not paying the full minimum wage, or not paying overtime when it is worked. It is, in fact, dishonest, and they could be charged and penalized for discouraging their employees from signing up for unemployment benefits when eligible.

    Do not hesitate to sign up on an unemployment claim. The "other" relative you spoke with, who told you that this would ruin them financially and forget any possibility of being called back does not, or should not be trying speak for the business owners anyway.

    By not signing up, you are not doing them a favor, you are enabling them to violate the law. If they have any employee who breaks the mold and signs up, then they are going to have to pay the higher tax rate, your and your wife's unemployment is not going to break them or make them financially, and the next person they hire after they don't call you back may not be as dumb as to turn down their legitimate unemployment benefits either, and they would have gained nothing by trying to punish you.

    I collected unemployment taxes from employers for some time. I can't quote you a dollar figure on how much their rate will increase, but it will not be great, and I assure you, the whole system is set up for people in exactly the situation you describe yourself as being in to collect unemployment benefits. Not to do so would be silly.

    You and your wife, who worked part time, in particular may not set up for very big claims, based on your earnings from covered work during the first four of the last five quarters.

    If the company doesn't want you to sign up, then let them lay off someone else and keep you paid. They may be counting on the fact that you're relatives to assure that you accept the way they treat you where someone else would not. But then, let me remind you, there are mandatory posters in their workplace which tell you that you have the right to sign up on unemployment insurance. You have not been told not to do so by anyone except this other person who works there. Do not take their advice or counsel as the real story of what you should do.

    Last edited by commentator; 04-14-2011 at 08:39 AM.
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