It’s Your Money
September 23, 2019
When I first meet people
They always ask…
So… what do you do…
I respond…
We save companies money…
That normally gets a positive response…
People like to save money…
Now….
Do you have time for a quickie quiz…
How many of you have signed a contract…
Thought you got a good deal
Possibly a great deal and…
Never looked at the paperwork again
Can I see a show of hands…
You…
Yea…. you over there
Is your hand up or are you scratching your head…
It looks like you wanted to put your hand up
Come on…
Let’s be honest
We all have done it…
I believe that all of us have good intentions…
But let’s face it we just get busy
No matter how you planned your day
Something happens and you are once again
Putting out fires
The first thing we do with any potential client
Is validate what they are currently paying
Are you paying the exact rate you signed for…
Believe it or not…
This is not always the case
I have people tell me….
Yea… we signed a contract and I was told
We are paying well below market prices
That is always great to hear
But let’s see if that is their reality…
Do you mind if I see your contract…
And could we also get a copy of your latest bill…
I can’t tell you how many times
We find that people are being charged
The wrong rate
And most of the time it is for more than
What you signed for
We always direct them to call the provider
And clarify…
Why are we paying this higher rate…
Our contract states we should be paying xxxx amount
Guess what the response normally is…
Oh, we’re sorry
That was billed improperly
Let us correct that…
We can give you a credit
Or send you a refund
How nice of them….
If they were under charging you
I bet they would contact you and say
We have a problem
However, if they are over charging you
You don’t hear from them
This is your money…
Don’t be afraid to ask for it…
HBS clients have received thousands of dollars in refunds
Always be aware of what you are paying…
And if you are not sure…
Give us a call
HBS leaves no stone unturned in our search for savings
We find ways to save you money
Nation’s Unemployed Hung Out To Dry In Debt Ceiling Deal
August 1, 2011
As reported in Huffington Post
WASHINGTON — The long-term unemployed have been left out of a deal between congressional negotiators and the White House to enact massive spending cuts and raise the nation’s debt ceiling before its borrowing limit is reached on Tuesday.
Under the so-called grand bargain President Obama tried to strike with House Speaker John Boehner (R-Ohio), federal unemployment benefits would have been extended beyond January 2012, when they are set to expire.
But those negotiations collapsed in July. On Sunday, congressional leaders and the administration crafted a not-so-grand bargain that will cut spending without raising taxes or preserving stimulus programs like federal unemployment insurance.
Asked Sunday night why spending to help the unemployed had been left out of the deal, a White House official said, “because it had to be part of a bigger deal to be part of this.”
In other words, Democrats need significant leverage to get Republicans to agree to additional spending on the unemployed. Federal unemployment insurance programs, which kick in for laid off workers who use up 26 weeks of state benefits, cost a lot of money: Keeping the programs through this year required an estimated $56 billion. In December, Democrats only managed to keep the programs alive for another 13 months by attaching them to a two-year reauthorization of tax cuts.
Anyone laid off after July 1 is ineligible for extra weeks of benefits under current law. People who started filing claims in July who exhaust their six months of state benefits in January will be on their own. (People who are in the middle of a “tier” of federal benefits will probably be able to receive the remaining weeks in their tier, but they will definitely be ineligible for the next level up.) Since 2008, layoff victims could receive as many as 73 additional weeks of benefits, depending on what state they lived in.
Nearly 4 million people currently claim benefits under the two main federal programs (known as Emergency Unemployment Compensation and Extended Benefits), according to the latest numbers from the Labor Department. Another 3 million are on state benefits.
Asked if the White House would continue to push for a reauthorization of federal unemployment benefits, the official said, “Absolutely, we will absolutely keep pushing for that.”
The unemployment rate is not expected to come down anytime soon, and economic forecasters said earlier versions of the deal currently awaiting action in Congress would significantly slow economic growth because of reduced government spending.
Judy Conti is a lobbyist who deals with Congress and the administration for the National Employment Law Project, a worker advocacy group. She agreed with the official that unemployment benefits would have to be part of a big deal.
“Things like the payroll tax holiday and unemployment insurance are controversial and increasingly partisan issues. In order for those to be resolved so far in advance before their expiration there would have had to have been a very significant deal,” Conti said. “Once the grand bargain died, the chance for any meaningful stimulus died as well.”
Sam Stein contributed reporting.
By Lisa Fleisher/Statehouse Bureau
As reported on NJ.com
TRENTON — Gov. Chris Christie Thursday will propose major changes to the state’s broken unemployment system, reducing benefits for workers and limiting tax increases on employers, legislative and administration officials said tonight.
Christie’s proposal, which will need to be passed by the Democrat-controlled Legislature, is aimed at softening a tax hike business groups said was their top concern for the year, while also targeting benefits given to future unemployed workers.
Democratic lawmakers have said they would fight to protect benefits for workers, but they also said increasing taxes employers pay for workers could stunt job growth.
“I am going to have to support some element of what is being put on the table,” said Assembly Speaker Sheila Y. Oliver (D-Essex), who was briefed on the proposal Thursday. But “to have unemployed people, quote, ‘share the burden’ of dealing with our fiscal (problem), it’s like adding insult to injury to devastated New Jerseyans.”
The proposal, which would take effect in July, would reduce tax increases on businesses, institute a one-week waiting period for people receiving benefits, reduce the maximum weekly benefits check by $50 and increase benefit restrictions on people fired for “misconduct,” said Oliver and two senior Christie administration officials, who requested anonymity because they were not authorized to speak before the announcement.
With the state’s jobless rate hovering around 10 percent, the proposal would not affect employees already on unemployment.
Full Star-Ledger coverage of the N.J. budget
Christie’s proposal is a shift from a statement he made just before taking office in January. He had said he wanted to find a way to help employers, but the state would have to “pay the piper on this” and he would not ask for legislation to put off the tax increase.
Those taxes on employers pay most of the cost of providing state benefits to laid-off workers. But politicians in both parties for years used unemployment taxes for other purposes, such as paying for health care for the poor.
A constitutional amendment, which Christie supports, will go on the ballot in November asking voters to force the Legislature to stop raiding accounts such as the New Jersey Unemployment Insurance Trust Fund.
When New Jersey and the country plunged into the deepest recession since the Great Depression, the state quickly ran out of money to pay benefits. That triggered a tax increase lawmakers have tried to soften.
“There’s no bigger issue for the economy, for future economic growth, for this state,” said Arthur Maurice, a vice president with the New Jersey Business and Industry Association. “Unless it’s resolved, there will be greater unemployment and no hope of any jobs recovery in the state.”
Without the proposed changes, the average employer in July would see taxes go up 58 percent — or $390 a year — per employee, according to the administration. The changes would hold that increase, on average, to 17 percent this year, or $130 per employee and further limit the potential for increases through 2013.
New Jersey has borrowed $1.2 billion from the federal government in the past year, and Christie and lawmakers have asked congressional representatives to work to get the loan forgiven.
Under Christie’s changes, future laid-off workers would have to bear some of the pain. The maximum weekly state benefit would be scaled back from $600 to $550, and people would have to wait a week to get a check. That means people who take weeklong furloughs — or temporary, unpaid time off — would not be eligible for benefits for that first week.
Those provisions will likely face the biggest fight.
“It’s something that I would have a very hard time supporting,” said Senate Majority Leader Barbara Buono (D-Middlesex). “I think it’s Draconian.”
Posted by: Mitchell Hirsch on Feb 17, 2011
As reported by Unemployedworkers.org
UPDATE: FEB. 17 – UNEMPLOYMENT INSURANCE SOLVENCY BILL INTRODUCED IN SENATE
Senator Richard Durbin (IL), with Senators Jack Reed (RI) and Sherrod Brown (OH), today introduced the Unemployment Insurance Solvency Act of 2011, which offers immediate tax relief to cash-strapped states and employers, preserves UI benefit levels, and creates strong incentives for states to restore their UI programs to solvency while also rewarding states that have managed their UI trust funds effectively.
In a statement, NELP Executive Director Christine Owens said, “Jobless workers, and we hope employers too, should be grateful for the leadership of Senator Richard Durbin and his colleagues Sherrod Brown and Jack Reed on the issue of unemployment insurance solvency. Following the President’s FY 2012 budget, the introduction of the Unemployment Insurance Solvency Act sets the stage for a serious conversation on how to make sure that the safety net tens of millions of Americans have counted on during the tough times of the last few years will be financially secure into the future.”
The new bill is similar to the plan outlined by President Obama in his remarks last week, but adds further protections for benefits and additional opportunities and incentives for states to return to solvency in the long run.
Original Post: Feb. 11
Unemployment insurance is just that — insurance — and it’s financed by premiums paid on workers’ paychecks and deposited into a trust fund. However, the unemployment insurance (UI) trust funds in many states are not only insolvent, but now face heavy debt burdens due to their increased need for federal borrowing during this prolonged period of high unemployment. Restoring them to financial health is essential to ensure that unemployment insurance benefits are there for workers when they’re needed, both today and in the future. The Administration has outlined a significant framework to address the problem, which would provide needed debt and tax relief to states and businesses.
A new plan from the National Employment Law Project (NELP) and the Center on Budget and Policy Priorities (CBPP) would build on that framework, further strengthening the long-term solvency of state UI systems while avoiding benefit cuts and employer tax increases. Workers need to pay attention to this issue. The last time UI trust funds got hit this hard, in the 1980s, 44 states cut back benefits for workers.
Many states UI trust funds have been hit in recent years by a double-engine freight train. First, for years many states have inadequately financed their UI funds, both by keeping their taxable wage base for UI too low relative to inflation-adjusted dollar values, and by taking a dangerous “pay-as-you-go” approach, which failed to build adequate reserves during periods of economic growth. The graph below shows the substantial erosion in the inflation-adjusted value of the wage base that is subject to the UI taxes that fund state systems. What does this mean? It means that the employer of a dishwasher pays the same unemployment premium as the employer of a banker. It does not take a degree in actuarial science to know that this is not going to work.
And oh yeah, second — well, then came the Great Recession with millions of workers’ jobs being lost and the vastly increased need for unemployment benefits to help sustain unemployed job-seekers and their families.
Now, 30 states have exhausted their UI trust funds and are borrowing from the federal government.
The lead editorial in The New York Times yesterday, titled ‘Relief for States and Businesses’, explained the need for the Obama administration’s approach. Here are some excerpts:
So many people now receive jobless benefits that 30 states have run out of their unemployment trust funds and are borrowing $42 billion from the federal government. Three of the hardest-hit states — Michigan, Indiana and South Carolina — have borrowed so much that they triggered automatic unemployment tax increases on employers, and the same thing is likely to happen to 20 more states this year.
….
On Tuesday, the Obama administration unveiled a smart proposal to delay those tax increases and provide some relief to both employers and state governments. Congressional Republicans reflexively objected to the idea, which could produce higher taxes in three years, but this plan provides relief that might stimulate hiring now when it is most needed.
….
Under the plan, which is subject to Congressional approval, there would be a two-year moratorium on the increased taxes that employers would otherwise have to pay to support the unemployment insurance system, which could save businesses as much as $7 billion. During those same two years, states would be forgiven from paying the $1.3 billion in interest they owe Washington on the money they have borrowed.
….
In 2014, when the economy will presumably have recovered somewhat, employers will have to make up for the moratorium by paying higher unemployment taxes to the states. Specifically, they will have to pay taxes on the first $15,000 of an employee’s income, instead of the current $7,000. But, even then, unemployment taxes will be at the same level, adjusted for inflation, as they were in 1983, when President Ronald Reagan raised them.
The administration is proposing to cut the federal unemployment tax rate in 2014 so that employers would pay the same amount to Washington as they do now. States, if they choose to do so, could collect more from each employer to repay the federal government and restock their own unemployment trust funds.
….
The full details of the plan’s costs and benefits will be available when President Obama submits his 2012 budget to Congress next week. When he does, both parties should take a close look at the numbers and seize the opportunity to keep this fundamental safety net solvent.
“It is a major step forward for the President’s FY 2012 budget to address the UI trust fund crisis,” said Andrew Stettner, deputy director of the National Employment Law Project and a co-author of the new joint NELP-CBPP policy proposal. “Our proposal rests on the same core principles — giving employers and states relief now while taking concrete steps to restore the long term solvency of the UI trust fund as the economy recovers. The plan endorses two key aspects of what the Administration’s proposal reportedly includes — raising the taxable wage base up from the inadequate, outdated level of $7,000 and endorsing a two-year moratorium on federal UI tax increases.”
The NELP-CBPP plan, detailed in a new report, would enable states to restore the solvency of their UI trust funds, avoid significant tax increases on employers during a weak economy, and prevent damaging cuts in UI eligibility and benefits for jobless workers, without increasing the deficit. The plan also suggests additional debt relief for states and positive incentives for employers, rewards states that have maintained sound financing packages, and builds on existing federal protections of state benefit levels.
In a statement, the groups provide a summary of the plan:
• The federal government would gradually raise the amount of a worker’s wages subject to the federal UI tax (i.e., the FUTA taxable wage base). This would automatically raise the floor for the taxable wage bases in the states which by law cannot be lower than the federal wage base, helping those states rebuild their trust funds. (The federal UI tax rate would fall, however, so that overall federal UI taxes did not go up.)
• The federal government would provide a moratorium, until 2013, on state interest payments on their UI loans.
• The federal government would also postpone, for two years, the FUTA tax increases required to recoup the loan principal in borrowing states.
• The federal government would offer immediate rewards and future incentives for states that currently have and continue to maintain adequate trust fund levels.
• The federal government would excuse a state from repaying part of its loan if the state (a) enters a flexible contractual agreement with the U.S. Labor Department to rebuild its trust fund to an appropriate level over a reasonable number of years, and (b) agrees to maintain UI eligibility, benefit levels, and an appropriate tax rate over the loan-reduction period.
This plan would produce the following benefits:
• Employers would not pay higher federal UI taxes until the beginning of 2014, saving them $5 billion to $7 billion while the economy remains weak and $10 billion to $18 billion over the next five years. Also, employers would pay no additional assessments to cover interest payments in 2011 or 2012, saving them $3.6 billion.
• In addition, partial loan forgiveness that comes from a state’s commitment to build adequate trust funds would save employers about $37 billion by the end of the decade. Counting the interest payments on this principal as well, employers could save as much as $50 billion.
• All or nearly all states would assume a path to permanent solvency.
• Employers in responsible states would receive concrete rewards and a more level playing field between the states.
• Adequate trust funds would stabilize UI tax rates over time, avoiding the roller-coaster tax rates common in many states — very low during healthy economic times, rising rapidly during recessions — that harm businesses and the economy.
• States would maintain current UI benefit and eligibility levels.
• The federal deficit would not rise as a result of these policies.
“States face a tremendously urgent crisis when it comes to their unemployment insurance trust funds,” said Michael Leachman, assistant director of the Center’s State Fiscal Project and co-author of the report. “If federal policymakers address this crisis using our plan, employers could save as much as $50 billion in taxes and states would maintain the critical benefits they provide to people who lose their jobs.”
By Lisa Fleisher/Statehouse Bureau
February 24, 2010, 9:38PM
TRENTON — Gov. Chris Christie Thursday will propose major changes to the state’s broken unemployment system, reducing benefits for workers and limiting tax increases on employers, legislative and administration officials said tonight.
Christie’s proposal, which will need to be passed by the Democrat-controlled Legislature, is aimed at softening a tax hike business groups said was their top concern for the year, while also targeting benefits given to future unemployed workers.
Democratic lawmakers have said they would fight to protect benefits for workers, but they also said increasing taxes employers pay for workers could stunt job growth.
“I am going to have to support some element of what is being put on the table,” said Assembly Speaker Sheila Y. Oliver (D-Essex), who was briefed on the proposal Thursday. But “to have unemployed people, quote, ‘share the burden’ of dealing with our fiscal (problem), it’s like adding insult to injury to devastated New Jerseyans.”
The proposal, which would take effect in July, would reduce tax increases on businesses, institute a one-week waiting period for people receiving benefits, reduce the maximum weekly benefits check by $50 and increase benefit restrictions on people fired for “misconduct,” said Oliver and two senior Christie administration officials, who requested anonymity because they were not authorized to speak before the announcement.
With the state’s jobless rate hovering around 10 percent, the proposal would not affect employees already on unemployment.
NJ Unemployment Tax……Going Up!!!!!!
February 4, 2010
N.J. businesses’ unemployment taxes expected to skyrocket in next year
By Lisa Fleisher/Statehouse Bureau
December 30, 2009, 7:32PM
James Bellis is already in a bind.
As an employer, he pays higher state unemployment taxes than many because he lays off about a dozen workers from his tree maintenance business every winter.
But next year, he expects to be forced into a deeper hole. Businesses will likely see their unemployment taxes skyrocket in July — and not come down for years — because the fund is broke.
It’s almost more than Bellis can handle, after seeing a 23 percent drop this year at Tree Tech, his Randolph business.
“In this economy, every dollar is valuable to managing a business,” he said.
Gov.-elect Chris Christie’s administration says the unemployment fund is one of the top three financial problems it will face when it takes over on Jan. 19.
“It’s a very serious problem, and, frankly, it’s as serious of any of the state’s fiscal problems,” said Rich Bagger, Christie’s chief of staff.
The fund has been strained by a persistent unemployment rate of close to 10 percent, but legislators and national observers say the problems stem from years of pillaging by lawmakers during better times to pay for other projects.
Because the fund is insolvent, employers will see an automatic tax hike in July, which could translate into businesses paying between $300 and $1,100 more per worker to bring $1 billion more to the state, according to the state Labor Department.
But even that will not stop the fund’s deficit from increasing fivefold, from $926 million now to $4.5 billion by the end of April 2011. New Jersey is one of 25 states that has borrowed money, interest-free through 2010, from the federal government.
The situation puts Christie in an unpleasant position, because he has promised no tax increases, because the hike is baked into the unemployment system. It automatically adjusts the tax rate based on the fund’s balance and an employer’s individual history of layoffs.
The tax hike could work against an economic recovery, causing businesses to hire fewer people, lay off workers or freeze or lower salaries, said Rich Hobbie, executive director of the National Association of State Workforce Agencies.
“This is a serious increase in costs for employers,” he said. “They have to figure out some way to cover that cost.”
The tax increase comes at the worst time for businesses, said Art Maurice with the New Jersey Business and Industry Association.
“Employers are struggling to keep people working that they have on their payrolls now,” he said. “Now to add an across-the-board (unemployment insurance) payroll tax increase on top of that would just be backbreaking.”
Bagger said the administration must look at all possible options to revive the once-flush fund that now supports more than 175,000 New Jersey residents. The choices include:
• Pushing legislation to put off or reduce the tax increase. The downside is that increases debt.
• Reducing benefits to bring them more “in line” with other states. Democrats and worker advocates will fight that change.
• Finding $1.9 billion for the fund. But from where? Gov. Jon Corzine just cut $839 million in spending to deal with a nearly $1 billion current budget deficit, and the Christie team projects it will be $9.5 billion short for next year’s budget.
• Teaming with other states to ask the federal government to forgive loans.
Lawmakers have known this was coming for years. Over the last two years, Corzine pushed off similar tax increases on employers by putting $380 million from the general fund into the unemployment fund.
The U.S. Department of Labor expects 40 states’ funds to become insolvent by 2011.
Already, 25 states and the Virgin Islands have borrowed more than $25 billion from the federal government to pay claims, not including extended benefits paid for by the federal government. New Jersey started borrowing in March and now owes more than $926 million. The biggest borrower, California, owes $5.9 billion. Michigan owes $3 billion and New York owes $2 billion. The states’ problems are not unprecedented. In the 1970s and ‘80s, states borrowed regularly from the federal government, but loans at that time were interest-free. This time around, loans are interest-free only though 2010
State lawmakers around the country are scrambling to deal with the problem.
New Hampshire, for example, has instituted a one-week waiting period to get benefits and increased the portion of salary taxed. Indiana in April saw thousands of union workers protesting cuts the governor there called “Rolls-Royce” benefits. And 10 states are already making employers pay their system’s highest tax rate, which is what New Jersey is scheduled to do.
New Jersey legislators disagree about how to solve the problem.
New Jersey has one of the highest weekly benefits — $584, compared with $405 in New York and $566 in Pennsylvania — and it will automatically increase to $600 for newly laid off workers who receive their first benefit check after the New Year.
It also is one of a handful of states to allow people to collect checks the first week they are unemployed — instead of waiting a week — and which allows increased benefits for people with children, according to the National Association of State Workforce Agencies. Advocates say this is because it costs so much to live here.
Still, some legislators say the state can’t afford to categorically leave out options.
“Everything should be on the table,” said Assemblyman Joseph Malone (R-Burlington), who said the solution to the fund’s problem needed to be worked out with a comprehensive approach to fixing the economy. “The decisions that are going to have to be made are going to anger people.”
The very suggestion has drawn sharp words from some legislators and advocates.
“Given the dire situation it’s just mean-spirited,” said state Sen. Barbara Buono (D-Middlesex.) “I think that it would be unconscionable, given the current state of affairs, to decrease benefits. We’re talking about people keeping a roof over their heads and keeping food on the table.”
An alternative approach, offered by state Sen. Stephen Sweeney (D-Gloucester), is to let the pot just replenish itself.
“These funds have to build up, and they can’t build up overnight,” he said.
To be sure, even the more generous features are not what caused the fund to fail. The major source of the problem, critics say, is not even the recession, but rather the $4.7 billion siphoned from the 1990s through 2006 by governors and legislators from both parties to pay for things such as health care for the poor.
“Unemployment wasn’t so long-term back then,” said Buono, who supported the diversions. “Given the set of alternatives that we had and the cuts that were made, this was not anything that any individual legislators wanted to do but … I think it was something that needed to be done at the time.”
The unemployment fund kept growing, reaching $3.1 billion by the end of 2001. But even after the balance slipped, plunging to $1.5 billion by the end of 2003, governors and legislators continued to scoop up money before it hit the fund, until Corzine stopped the practice in 2006.
The state has started to take steps to prevent that from happening again. In November, voters will decide on a constitutional amendment that would prevent the Legislature from diverting money.
As an employer, Stephen Fauer wouldn’t mind that his environmental services business needs to pay higher taxes to contribute to the state’s bankrupt unemployment fund.
“If someone puts their hand out and asks, ‘Help me,’ you don’t say, ‘No,’” said Fauer, who owns Environmental Strategies and Applications in Middlesex. “That’s the kind of tax I pay not necessarily with a smile on my face, but not with a heavy heart.”
What bothers Fauer is the reason he will likely have to pay more.
“It’s the irresponsibility of our politicians,” he said. “Doing things for expediency rather than things that are correct. You need to behave in a way that’s correct. You need to behave in a way that’s responsible.”
How it works
Employers and employees both contribute to the fund. But employees put in a small, fixed amount, whereas employers pay the lion’s share of the tax – and the amount they pay varies.
The system taxes employers based partially on how much money is in the fund, and partially based on their history of laying off workers.
But there’s another factor: All employers are affected by how much money is in the unemployment pot. If the balance sinks too low, taxes go up for everybody, which is happening this year.
Our Perspective:
Did you Know:
Unemployment is the 2nd highest US Government Employer Mandated Tax!!
Why is it, that something that is ranked so high, stirs so little questions?
Many employers just see it as a cost of doing business.
Did you know that the unemployment tax is the only tax that you can have a say as to what your rate is?
How do you know if your current unemployment rate is correct?
When is the last time you asked that question?
Did you know that the state of NJ has a 12% error rate in the payment of unemployment claims?
If they are paying claims incorrectly, that means they are taking too much money out of your account and that your rate may be incorrect!
Unemployment is a very basic concept:
Each company basically has a checking account with the state to pay for unemployment claims.
The state assigns a rate to each company, which determines what percentage of payroll is paid into this checking account to help pay for claims.
The state then notifies you how much money was taken out of your account to pay for claims that your company may have been liable for.
Would you give the state your personal check book?
You may say no!!!!!
But you have more $$$ in your unemployment account, then you will ever have in your personal checking account. Yet people still do not ask……
How much are we paying into unemployment?
Are you sure we are paying the correct amount?
Is your currenr nemployment Rate Correct?
Hutchinson Business Solutions has been dealing with this exact question for over 10 years. We offer a free service to determine if your rate is correct.
If we find there is an error, we will work with the state to get it corrected and take the necessary steps to file for a refund.
We will also work with you to help control unemployment cost and your future rate.
Should you like to know more email george@hbsadvantage.com or you may call 856-85-1230.
The Unknown Cost
January 25, 2010
The main topics being spun in Washington lately have been Health Care and the Bank bailout. What has been lost in the discussion is what must be done to get the economy moving and providing jobs for America. That seems to be the mantel that President Obama is just starting to pick up.
Every month the experts look to see the latest unemployment data; this proves to be a strong indicator on how and if a recovery is sustaining. Unfortunately, the unemployment report continues to be dismal. Just last week, I saw an article saying that layoffs were higher than expected in December 2009.
The unemployment rate is still over 10% and this will continue to play a large roll in supporting the economic recovery.
How does this all effect me?
Everyone reads about the rising unemployment, but have you ever stopped to think what this means for your company? You may say, “We have not had many layoffs, so it doesn’t really effect us.”
Don’t be too quick in making this assessment.
The unemployment is a state fund that all employers pay into. Each employer basically has a checking account with the state to help fund claims. The state assigns a rate to each employer, which determines what percentage of payroll is paid into the fund to pay for claims. The state will then notify each employer as to how much they have taken out of this account in payment of claims.
Seems simple enough!
Because of the high rate of unemployment, more dollars are being paid out in claims and there is not enough money in the fund to support these claims. We were lucky last year because part of the bailout went to funding this shortfall.
But, how does the state address this shortfall in funding?
If you look at the unemployment rating structure set up in New Jersey, you will see that there are six tables the state can use to fund unemployment. All they have to do is switch what table they use in assigning the rate and without notice you have just received a tax increase.
As an example: Suppose your company has a positive reserve ratio between 4% to 4.99%
In 2008 – the state assigned your unemployment rate from column A….. your unemployment rate would have been 2%.
In 2009 – the state started assigning your unemployment rate from column B…. your new unemployment rate would have been 2.6%.
A 30% increase and nothing really changed!
In 2010 – the state is now looking to fund unemployment from column E+10%, guess what your new rate will be?….. 4.1%
That is over a 57% increase from last year. The rate would have doubled since 2008!
Note: This is just not happening in New Jersey, every state is faced with the same dilemma………. How do we fund the higher claim levels?
What is your current rate?
When was the last time you validated that your unemployment rate is correct?
Now more than ever, it would be prudent to ask this question.
There may be a mistake in the calculation or we may offer options that may help to minimize the potential increases in the long term.
We offer a free analysis of your existing unemployment rate.
Would you like to know more? Email george@hbsadvantage.com or call 856-857-1230
Unemployment is the 2nd highest employer mandated tax on employers. It is the only tax that you have as an employer, have the opportunity to determine what your rate should be.
To learn more about how the unemployment tax effects your business, you may visit our website www.hutchinsonbusinesssolutions.com or feel free to contact us.
Unemployment Rises to 9.7 Percent; 216,000 Jobs Lost in August
September 4, 2009
Washington Post Staff Writer
Friday, September 4, 2009; 9:27 AM
The job market continued its long, steep decline in August, with the jobless rate soaring to 9.7 percent and employers continuing to shed jobs, albeit at a slower rate than expected.
Analysts generally believe that economic output began rising by late summer. But new Labor Department data released Friday morning shows that that improvement isn’t yet flowing through to the job market, as employers remain highly reluctant to add staff.
The rise in the unemployment rate rose to 9.7 percent in August, from 9.4 percent in July, resumed a steep upward path that has been only rarely interrupted since the recession began in December 2007. Employers shed 216,000 net jobs, significantly better than the revised 276,000 jobs lost in July and less than the 230,000 decline that forecasters expected.
The tally now stands at 6.9 million jobs lost since the beginning of the recession in December 2007. A broader measure of joblessness rose even more sharply than the headline unemployment rate. An expanded unemployment rate that includes people who have given up looking for a job out of frustration and who are working part time but want a full-time job rose to 16.8 percent, from 16.3 percent.
The rate of job losses has been declining, if haltingly, since winter. The August numbers, bad as they are, do offer hope that job losses will continue tapering off. Economists generally consider the job loss numbers to be a more reliable month-to-month barometer of the economy than the unemployment rate, and that measure indicated the slowest rate of job loss since August 2008.
The report also said that the average workweek was unchanged at 33.1 hours. Employers have cut back on hours in the current downturn, in addition to cutting jobs entirely, and are expected to have existing employees work longer hours before bringing new people onto their staffs. The hours-worked number confirms that employers have stopped cutting back hours but gives no evidence they are starting to expand hours yet.
Among the most positive signs in the report, average earnings for non-managerial workers rose 0.3 percent in August, the Labor Department said.
The job losses, though lower than in recent months, remained broad-based. The construction industry cut 65,000 jobs, in line with the recent trend. Manufacturing companies cut 63,000 jobs. The health-care sector, as it has throughout the recession, added jobs.
New Jersey Unemployment Insurance Benefits
September 3, 2009
Introduction to New Jersey Unemployment Insurance |
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| New Jersey unemployment benefits provide temporary compensation to those workers meeting the eligibility requirements of New Jersey law. The New Jersey Department of Labor and Workforce Development and each other state’s unemployment office administers its own unemployment insurance program within Federal guidelines. |
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| The value of unemployment benefits in New Jersey differs from that of other states because each state unemployment office applies its own formulas and limits when calculating the level of unemployment compensation. |
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| The duration of unemployment benefits in New Jersey may also differ from that of other states. |
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| You can compare state unemployment insurance programs, including eligibility, benefit amounts, and duration here. |
Eligibility for New Jersey Unemployment Benefits |
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| The basic requirements for collecting unemployment are: |
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| For complete details see the Unemployment Insurance section of the New Jersey Department of Labor and Workforce Development website. Or you can call the State of New Jersey Unemployment Insurance Claim for unemployment related questions from the number listed below. |
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| 1-888-795-6672 |
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Eligibility for Unemployment Benefits in Other States |
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| If you have recently worked or resided in states other than New Jersey, you may need to choose the state in which you file your claim. Compare benefits here, and visit the other state unemployment information pages by clicking on the state’s name below. |
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Filing for Unemployment in New Jersey |
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| Here are some tips for filing a correct and complete unemployment claim: |
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About Your Unemployment Benefit Check |
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| How much? In general, unemployment benefits are based on an individual’s earnings in the base period. As of December, 2008, NJ benefits ranged from $85 to $560. New Jersey state unemployment benefits are subject to Federal income taxes, and you may elect to have taxes withheld from your unemployment check. |
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| How soon? Across the United States, it generally takes two to three weeks to receive your first benefit check after you file your claim. Check with your state unemployment office for details. |
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| How long? As of December, 2008, The duration of NJ unemployment benefits was 1-26 weeks, but benefits can be extended by New Jersey during times of high unemployment or other special circumstances. |
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New Jersey Unemployment Rate Statistics |
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| How bad is it out there? Where is the grass greener? The US Bureau of Labor Statistics compiles official national, state, county, and metropolitan area unemployment statistics. To compare the unemployment rate between locations, click one of the links below. |
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Hutchinson Business Solutions 