Small business hires unemployed, unemployment checks start coming out of his account

7 posts / 0 new

I'm out here in San Diego, at my sister's house, where my brother-in-law says, "I'll never hire another unemployed person".

The reason he gives is, he hired a girl as a dispatcher for one day a week (Saturday). She was on unemployment from a grocery store.

She was skillful, so he extended her to three days a week.

After 6 or 8 months, he was informed that her unemployment, which was ongoing, would thereafter be drawn from his account, which he must maintain for unemployment insurance.

He wrote to Sacramento, and they replied that "She is eligible." So he called and the lady said only that "This is Obama's new plan for unemployment."

The employee was subsequently fired for colluding with one of his drivers for taking cash payments under the table for work that should have paid to the company.

After this, she was still paid unemployment compensation out of his fund pool.

So the question is, knowing that Obama's new plan extended the length of compensation, did he also make this change, such that the new employer gets stuck paying compensation for unemployment previous to his hiring the person?

If this is not new, then BHO doesn't get the blame.

Has anybody heard such a crazy story before?

ProudPrimate's picture
ProudPrimate
Joined:
Jul. 31, 2007 4:01 pm

Comments

Transferring the liability for unemployment from the firer to the hirer sounds absurd. You can become eligible for unemployment if your hours are sufficiently cut - for example from full time to only Saturdays, so I would suspect fraud on the woman's part. In fact, I have heard that there are tax incentives for hiring the unemployed, added as part of the extension that Obama passed.

Most drivers are "independent contractors" who are paid on commission. This generates constant corruption of the type described, but allows the employer to avoid his share of FICA, unemployment insurance, and workman"s comp. No employer likes his drivers stealing, but they save a ton of money compared to the alternative.

Of course, this could also be a right wing lie. I used to work for someone who randomly fired a number of his "independent contractors" the week before Thanksgiving. He stopped when the unemployment office ruled that they were eligible. Obviously unemployment is evil.

doh1304's picture
doh1304
Joined:
Dec. 6, 2010 10:49 am

Just thought I'd actually look it up:

http://askville.amazon.com/pays-unemployment/AnswerViewer.do?requestId=9...

Employers pay a tax per employee, not individual claims. However, that tax rate varies by the number of claims against that employer. A basic insurance plan - pay a premium for coverage, and if you get too many claims your premium goes up.

doh1304's picture
doh1304
Joined:
Dec. 6, 2010 10:49 am
Quote doh1304:

Just thought I'd actually look it up:

http://askville.amazon.com/pays-unemployment/AnswerViewer.do?requestId=9...

Employers pay a tax per employee, not individual claims. However, that tax rate varies by the number of claims against that employer. A basic insurance plan - pay a premium for coverage, and if you get too many claims your premium goes up.

Sounds like that is what happened, her unemployment was counted against him and his premium went up.

WorkerBee's picture
WorkerBee
Joined:
Apr. 28, 2012 12:22 pm

The curious thing is, why should the new employer be the source of ongoing compensation for someone let go by a different company? It appears that she was, say, full time at the grocery, and part time for him, but when her original span of compensation ran out, the extension that Obama managed to get through the congress (at the extortionist price of keeping the Bush tax cuts alive for another term) — maybe some quirk in the new legislation shifts that extended part onto some other victim, one not culpable for the state of affairs in any way.

I'm just posting this in an attempt to answer a question of my family member, who has a visceral dislike for Obama anyway, and if this is something anyone has heard of anywhere, it could help me make sense of the matter. Or, if it is absolutely unheard-of, that sheds its own sort of light, doesn't it? xD

ProudPrimate's picture
ProudPrimate
Joined:
Jul. 31, 2007 4:01 pm

Obama had nothing to do with it. California policies govern CA unemployment. Because she is working only part time-she may be collecting partial unemployment.

DynoDon
Joined:
Jun. 29, 2012 10:24 am

Spent several decades doing accounting in California - but left a decade ago.

Assuming San Diego has not misunderstood something (unlikely) then California has made some changes (or a mistake on this case).

One possibility is that there may be a rule that when the prior employer(s) have gone out of business and their unemployment insurance accounts become exhausted - the assessment which would normally fall backward, falls forward instead.

So it has nothing to do with the status of who one hires, but rather the status of the company they worked for before you.

Rodger97321's picture
Rodger97321
Joined:
Jul. 31, 2007 4:01 pm

Currently Chatting

Our kids are counting on us to reverse austerity.

According to UNICEF, even in the world's richest countires, children remain “the most enduring victims” of the recession. In the last six years, 2.6 million more kids have fallen below the poverty line, and more than half of them live right here in the United States.

Powered by Pressflow, an open source content management system