The National Association of State Workforce Agencies has just announced increases across 35 states in the amounts of tax money employers will be subject to pay for State Unemployment Insurance (SUI). For many companies, this will be a significant sum of money, as the reported median increase will apparently be 27.5%.
It can be assumed that most companies won’t see this increase as a positive thing. However, these increased taxes will help to replenish many of the States’ Unemployment Insurance funds, so when another recession occurs, there will be fewer states forced to borrow from the Federal government. With the BLS reporting a national unemployment rate of 9.7%, many states’ funds continue to drain – this SUI tax hike is merely a necessity right now.
When else would be a better time for a company to adopt a program which will best utilizes these monies paid to the States’ Unemployment systems? SUI taxes ensure each employee will have access to state-provided funds in the case of a layoff. When a company lays a person off with a severance, use of funds previously paid by the company to the State in the form of SUI taxes ensures the company does not double pay for each individual employee.
Any sensible company that has weathered “The Great Recession,” unscathed or not, will view this tax hike as an opportunity. An opportunity to implement a plan to protect against risks that will present themselves when recession hits again. Those companies who strategize and adopt plans to balance employee and employer needs will be the ones who recover the fastest.
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