I’m a business owner in California. I’m thinking of letting go of one of my employees since I’m not happy with the performance. I would like to understand how we can calculate unemployment benefits we have to pay if the employee does claim unemployment once I let them go. Is there a general rule of thumb or formula that we can use?
For context, this specific employee has been working for me for around 6 months, makes $85K annually, and has around $800/month in company paid insurance benefit.
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You should n9t have to pay out if you document the reviews sith the employee, make it clear what they need to do, the first warning should give clear goals, the second warning should give a timeline to correction, and the third warning accompanies termination. Usually a justified termination does not pay out unemployment. I could be wrong on this, consult your lawyer.
This is simply not true in most US States. I wish people would stop spreading this sort of misinformation.
Just because an employee is terminated “for cause” does not mean they will be denied UI. In most US jurisdictions, denial of UI requires malfeasance, insubordination or gross misconduct on the part of the employee.
EDD definitely has a web page or FAQ document where they tell you how your premium is calculated, so do some looking for it. In most state’s there’s a base rate and then some formula based on the amount they’ve paid out to your ex-employees vs the amount you’ve paid in. If you have low turnover, that ratio is probably pretty low and it seems unlikely your premium will increase by much.
And like /u/beamdriver said, there’s a high bar to deny UI - firing someone for poor performance won’t disqualify them.
I think it is this website for CA EDD - https://edd.ca.gov/en/Unemployment/UI-Calculator
It is from the perspective of an employee to see how much they will receive in unemployment benefits. But it does not give an accurate picture for an employer because it does not take into account how long the employee has been employed with a specific employer.
For instance, I have had this employee only for 7 months now and the website says I have to pay $450 per week in unemployment benefits. While this is accurate for the employee it is not accurate for a specific employe is clearly inaccurate since she has only been in the business for 7 months. Maybe all of the prior employers combined would give the employee $450/week in unemployment benefits.
It still makes me wonder where/how I can look up this detail for my business without having to pay an unaffordable per hour fee for an employment/labor lawyer.
UI is paid by the employer. Tax-rated employers pay a percentage on the first $7,000 in wages paid to each employee in a calendar year. The UI rate schedule and amount of taxable wages are determined annually. New employers pay 3.4 percent (.034) for a period of two to three years. We notify employers of their new rate each December. The maximum tax is $434 per employee per year (calculated at the highest UI tax rate of 6.2 percent x $7,000.)
UI is paid by the employer. Tax-rated employers pay a percentage on the first $7,000 in wages paid to each employee in a calendar year. The UI rate schedule and amount of taxable wages are determined annually. New employers pay 3.4 percent (.034) for a period of two to three years. We notify employers of their new rate each December. The maximum tax is $434 per employee per year (calculated at the highest UI tax rate of 6.2 percent x $7,000.)