Here Ye

July 23, 2015

Hear ye…. Hear ye… Hear ye……

This is to serve as notice

To all businesses in the State of New Jersey…..

Your new unemployment rates have just been mailed
By the State of New Jersey

You should be receiving your new rate notice….. Any day

Note:
All business owners have 30 days to question the new rates
you have been assigned

This is as good a time as any to verify…….

Is our new Unemployment Rate correct?

Unemployment…

Is the 2nd highest Employer Mandated Tax

By the US Government

 

Yet, people know so little about it

 

It is the only employer tax that can be controlled

 

Did you know that each claim can be worth up to $16,000????

 

Unemployment…..

Is like having a checking account with the State

 

Each year, at this time, the state sends you a notice

 

In NJ, it is called the

Employer Contribution Report

 

This report tells you…

How much money you had in your account at the beginning of the plan year

How much money you paid out in claims during the year

How much money you deposited into your account during the year

How much money is left in your account now….

 

It then goes thru a calculation based on the numbers listed above

 

As to what your new rate will be for the next 12 months

 

This new rate determines the funding level needed

To meet future claims

 

What is your rate????

 

Is your rate high or low????

 

Did your rate go up????

 

If so…You got a tax increase……

 

How do you know if your rate is correct????

 

That last question is the one question

All business owners should be asking

 

Especially if you have over 100 Employees

 

When there is a mistake in unemployment

The mistake is not on just 1 employee

It is the all factor

 

A mistake effect all your employees

 

That means the State may be taking more money

Out of your account than they should be taking

 

Remember….This is like a checking account

 

Would you miss money…..

If it was taken out of your personal checking account????

 

Who is holding the State accountable????

 

We are

 

HBS works with many established clients

Who took the time to ask the question

 

Is our rate correct????

 

Boy were they surprised…..

When we found there was a mistake

 

We went back to the State

 

Corrected the error

 

And our client received a refund

 

We are always asked how did you do that????

 

That is what separates HBS from all others

We know where to look

 

Many of the cost we work with

Most businesses take for granted

As the cost of doing business

 

Did you know……..

The state has over a 12% error rate

In the payment of unemployment claims

 

Once again…..

 

They are taking money out of your account

And they are not being held

Accountable

 

That is reason enough to ask the question….

 

Do you think you can look at our

Unemployment rate????

 

Is it correct??????

 

To learn more

Give us a call

 

We offer a free consultation

Did I ever tell you the story

 

About trying to renew

 

 

My NJ plumbing license seal

 

 

 

It was old and needed to be

 

 

Replaced.

 

 

 

Do you have about an hour?

 

 

 

It is wayyyy tooooooo long of a story

 

 

 

Without going into details

 

 

Let me just say

 

 

After many phone calls

 

 

 

 

It only took the State a year

 

 

To mail out my new

 

 

Plumbing seal

 

 

 

 

 

 

Now the State is treading on sacred ground

 

 

 

 

Each year in late July or early August

 

The State of New Jersey

 

Mails out the

 

 

 

New Jersey Employer Contribution Reports

 

 

 

To all New Jersey Employers

 

 

 

 

This form shows you how the State

 

 

Calculates your new

 

 

Unemployment Tax rate

 

 

For the next 12 months.

 

 

 

 

You have to stay with me here…..

 

 

 

 

The form shows how much

 

Your Company has paid

 

Into the unemployment fund

 

Since inception

 

 

 

It also shows the total amount of

 

Unemployment claim dollars

 

The Company has paid out

 

Since inception

 

 

 

 

Confused yet?

 

 

 

Keep reading

 

 

 

 

The bottom line

 

Shows your reserve balance

 

 

Or

 

 

How much money is left

 

 

In your account

 

To pay

 

 

Future claims

 

 

 

 

Alright….. take a breath

 

 

 

 

 

To determine your new rate

 

 

 

The State looks at your

 

Reserve balance

 

 

 

 

The State also looks at your

 

 

 

3 year taxable wage base

 

 

And your

 

 

 

5 year taxable wage base

 

 

 

 

 

 

Guess which Taxable Wage Base

 

 

The State picks?

 

 

 

 

 

If you said the higher number…..

 

 

 

 

You would be correct.

 

 

 

 

Well….

 

 

 

Guess what?

 

 

 

 

 

New Jersey will not be mailing out the

 

 

New Jersey Employer Contribution Reports

 

 

 

Any longer

 

 

 

 

You will now have to go online…

 

 

 

 

Set up an account…

 

 

 

And look up the information…..

 

 

 

 

Yourself

 

 

 

 

Did I miss that memo?

 

 

 

 

Did you miss that memo?

 

 

 

 

 

 

I bet you did not know that

 

 

 

 

Unemployment is the 2nd highest

 

 

Employer mandated tax by the government

 

 

 

 

It is the only tax

 

That you are able to manage

 

 

 

 

You do have the ability to manage

 

 

What rate your company is assigned

 

 

 

 

And

 

 

 

What dollar amount will be

 

Paid into the account

 

For the next 12 months

 

 

 

 

 

 

 

Did you know

 

 

That the national average

 

 

For the overpayment of an

 

Unemployment claim is

 

 

 

Over 10%

 

 

 

 

That means the State may be paying

 

The wrong amount for an unemployment claim

 

 

 

And the money is

 

Coming out of your account

 

 

 

How do you even know your

 

Unemployment Rate

 

Is correct?

 

 

 

How do you know if your

 

 

Reserve balance

 

Is correct?

 

 

 

 

This is one of the services

 

HBS provides

 

 

 

 

We serve as a public advocate for

 

Our clients

 

 

 

 

We hold the state responsible

 

 

 

 

We verify the assigned rate

 

Is correct

 

 

 

 

We manage the payment of claims coming

 

Out of your account

 

 

 

 

Auditing each claim payment

 

 

Verifying it is the correct amount

 

 

 

 

For companies with over 100 employees

 

 

The cost savings to

 

 

 

Manage your unemployment account

 

 

Can be seen within the first year

 

 

 

 

With the unemployment fund depleted

 

 

Now more than ever

 

 

Companies should be taking steps to

 

 

Manage their unemployment accounts

 

 

 

 

 

 

To learn more contact george@hbsadvantage.com

 

 

Visit us on the web www.hutchinsonbusinesssolutions.com

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.”


The state of New Jersey will soon be issuing the 2010/2011 unemployment tax rate notices.

 For those clients with over 100 employees, it is important to be aware how these new rates will affect your company.

 Once you receive your notice, please fax a copy along with a copy of last years notice to HBS @ 856-857-1233.

 Upon receipt, we will review the information with you and validate the numbers are correct or discuss what options may be available with you.

 There are times that a voluntary contribution may appear to be beneficial. This contribution will actually lower your rate.  We will advise you as to the amount of contribution, as well as the anticipated tax savings.

 Please take note, due to the high level of Unemployment Benefits paid out, the State of New Jersey requires a higher tax rating table to be imposed this year. As a result, Tax Schedule “C” is in effect this year, compared to Tax Schedule “B” which was in effect last year. Thus, most employers will receive a higher tax rating assignment this year than they did last year.

To illustrate how this works, if you compare the two tables (see below portion of the tables) you will see that a Reserve Ratio between 0.00% – 00.99% last year produced a 3.0% tax rate; however, this year the same ratio produces a 3.6% tax rate, creating a 0.6% tax increase

 Tax Rate Tax Rate    Reserve Ratio       2009/2010        2009/2010 Difference

2.00% – 2.99%                    2.8%                          3.3%                            +0.6%

1.00% – 1.99%                     2.9%                          3.4%                           +0.6%

0.00% – 0.99%                   3.0%                          3.6%                          +0.6%

Unemployment Costs are rising and Unemployment Cost Control is more important than ever. The high level of unemployment, along with anticipated legislation, is expected to continue the trend of increasing unemployment compensation costs.

 Employers should continue to be pro-active in contesting unwarranted unemployment claims.

 While this has always been our position, it is important to continue to be diligent in this area.

 If you previously chose not to actively contest unemployment claims you may want to reconsider this approach in the future, based on the tax information outlined above.

 The successful participation in all unemployment hearings, with the assistance of our strategic partner DCR as required, will continue to help maintain the lowest possible tax rate. The impact of a few weeks in Unemployment benefits paid out may now have an even a higher impact to your bottom line.

Take the time now to proactively maximize your position on minimizing the cost of future tax increases.

If you should have any questions concerning the new tax rate, or would like specific recommendations for your organization, please do not hesitate to call.

 Now more than ever, controlling the cost of unemployment is important for your company.

For more information email george@hbsadvantage.com or call 856-857-1230

Visit us on the web www.hutchinsonbusinesssolutions.com

New Jersey is set to release their new unemployment rates in August 2010.

There is one problem!

The state’s unemployment fund is vastly depleted and because of this they will be moving to a new column to calculate the rates. The current rates are being calculated from column B. The state currently has 6 columns to choose from in assigning rates. This year there is talk of moving to the furthest column, which will provide the maximum rates.

 Example:

If your current Employer Reserve ratio is between 4.00% and 5.00% you are currently paying 2.6% of your taxable wages into the unemployment fund over the last year. If your taxable wage base is $1,000,000 that would equate to $26,000. This ratio was chosen from column B.

Under the new proposed rating system if your Employer Reserve ratio is exactly the same, between 4.00% and 5.00%, your new rate could be chosen from column E+10. That would put your rate at 4.10%.

This is a 57% increase.

You will now be paying $41,000 into the unemployment reserve fund over the next year.

 Again, the actual table the state will be using has not been finalized but with the depletion of the current reserve balances, this option is being considered. Should they choose not to use the maximum rate, the next options could be:

Column C…3.1% ($31,000)

Column D..  3.4% ($34,000) 

Column E… 3.7% ($37,000).

Either way, your taxes are going up.

This would be a good time to validate if your current rate is correct!

Unemployment is the 2nd highest government mandated employer tax, yet no one seems to question it.

It is the only tax that you have the opportunity to control what amount you pay each year.

Is your rate correct?

The state of New Jersey has a 10% error rate in the payment of claims. This means that your rate may be incorrect.

The US Department of Labor states that if your company has been involved in a merger or acquisition in the last 3 years, there is a 50% chance that you have been assigned an incorrect rate.

We offer a free analysis of your current rate and we can also provide projections as to what your rate may be in the up coming tax year.

For more information email george@hbsadvantage or call 856-857-1230.

What’s your Rate?

We recently were notified that the State of New Jersey would be mailing out updated unemployment rates to all employers in New Jersey starting August 15th

Yawn!!!!

Why the announcement? No one looks at the notice.

So our rate may go up .1% from 2.3% to 2.4%, that’s the cost of doing business!

Wrong!!!!

 

How do you know your rate is calculated properly?

Unemployment is the 2nd highest employer mandated tax. It is like having a checking account with the state. They provide the rate, which tells you how much you must deposit into the account during the next year. They also provide a notice telling you how much they have taken out of your account.

Not Bad! Are you sure no one questions this?

 

Why publicize that employers may be overpaying payroll taxes? They do it willingly, without asking questions.

If your company employs over 150 employees, you should be looking at this rate. If there is a mistake it is not just with one employee, it is on your whole payroll.

Why will my rate be going up?

 Since the economy is been a bit shaky recently there are many individuals collectly unemployment and therefore the tax base supporting unemployment has been slowly depleted. In order to increase this revenue base the State of NJ will be moving to a new tax catagory which will automatically increase the revenues to support this base.

Without doing anything, your unemployment rate will be increased.

The State of New Jersey has over a 10% error rate in the payment of unemployment claims. That means they are taking too much money out of your account and that your rate is wrong!!

Been thru a merger, acquisition or restructuring?  The US Department of Labor statistics show there is close to a 50% chance the incorrect rate has been assigned to the new company. This stems from the governments inability to properly record these transactions.

Hutchinson Business Solutions has great success reviewing and validating if these unemployment rates are correct. Many of our clients are receiving refunds for overpayments! 

 

The state allows us to go back 3 years to verify if the current rate is correct. The state is not asking you to overpay taxes. The onus however is own you to provide the proper information.

What is your Rate?

 

What is your Reserve Balance?

How much have you paid out in claims?

 

Is your Rate correct?

Maybe today is the day to find out!

 

Call Hutchinson Business Solutions and ask about our no fee review of your current unemployment rate.

 

Our findings may surprise you.

 

You too may qualify for a refund!

 

Note:

This service available for companies with more than 150 employees.

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.

N.J. businesses’ unemployment taxes expected to skyrocket in next year

By Lisa Fleisher/Statehouse Bureau

December 30, 2009, 7:32PM

NJ-UNEMPLOYMENT-TRUST-FUND.jpgJames 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.

No need to tell Gilberto Ramos yesterday’s depressing statistics about the job market.”I’m a little upset now, because I’m actually experiencing it,” said Ramos, 44, of South Philadelphia.

On Aug. 29, Ramos became one of the 592,000 American workers added to the unemployment rolls last month, according to the dismal report from the U.S. Labor Department.

With 9.4 million now out of work, the unemployment rate rose to 6.1 percent – a five-year high – while the economy shed 84,000 jobs in August, the eighth straight month of job losses and more than analysts expected.

The bad news comes on the heels of two intense weeks of political convention activity as presidential candidates John McCain and Barack Obama kick their campaigns into high gear.

Standing in front of the state employment office in South Philadelphia, Ramos said the economy was at the top on his list of issues.

“I’m looking to vote Democrat,” he said, “because I think the Republican Party has taken care of their own and not the needy in America.”

Every unemployed person who walked out of the CareerLink office around lunchtime yesterday blamed the Bush administration for the state of the economy – and most said they were leaning toward Obama.

That’s not a surprise, political analysts said yesterday.

“Any bad economic news helps the Democrats,” said Ross Baker, a political science professor at Rutgers University in New Brunswick.

“I think that the emotional punch of unemployment figures is much more powerful than any other economic data,” he said.

Although there was hiring in health care and mining, jobs were lost in manufacturing, staffing, construction and retail, the report said.

“We’re losing jobs in all kinds of industries now,” said Roger Kubarych, chief U.S. economist at UniCredit Global Research in New York. “This is the clearest recessionary signal we’ve seen.”

Yesterday’s report brings the total decline in payrolls so far this year to 605,000. The economy created 1.1 million jobs in 2007.

The percentage of the unemployed still without jobs after six months rose to 19.5 percent, up from 17.4 percent a year ago.

And while the official unemployment rate is 6.1 percent, up from 5.7 percent last month and 4.7 percent a year ago, a larger group is also up. This group, which includes workers too discouraged to look for jobs and people who are working part time because they can’t find full-time positions, rose to 10.7 percent, up from 10.3 percent last month and 8.4 percent a year ago.

Also, the deteriorating labor market raises the likelihood the Federal Reserve will postpone any increase in interest rates until next year.

Yesterday’s figures increase the risk that President Bush will become the first president since Richard Nixon to oversee two recessions.

However, the Bush administration expressed optimism.

Commerce Secretary Carlos Gutierrez pointed to strong second-quarter growth to suggest that the economy was stronger than it appeared.

“The fact that we grew 3.3 percent in the second quarter is very different to the scenario that the really bleak forecasters would have you believe,” he said.

Outside the CareerLink office, there was ample evidence of what is known as the misery index – the sum of the unemployment and inflation rates.

It is 11.7 percent, the highest since 1991.

That was the last time Ramos had to look for a job.

Ramos said he had worked for his previous employer for 51/2 years when he was laid off. He said he believed his boss was bringing in less-expensive, immigrant workers to maintain the buildings. Immigration is an issue for him, along with the economy.

“I’m a family man, three kids. I have a newborn,” he said. His children are 6, 23 months and three weeks.

When his bosses laid him off, “I begged them” not to, he said.

He hasn’t had health insurance for four years. His fiancee, the mother of his three children, has insurance at work, and the children are covered through a government-funded program.

“Just the thought of having a toothache terrifies me,” he said.

Welder Stanley Michael Harrison, 51, lost his health insurance when he lost his job Aug. 10.

The company had been sold earlier, he said, and at first he was transferred internally, from a job paying $17 an hour to one paying $9.50.

“Nobody wants to pay,” he said.

Harrison blamed Bush and said the country couldn’t survive another four years with the Republicans.

“The whole country will go down,” Harrison said, his point echoed by Frank Dietrick, 55, a paralegal from South Philadelphia, out of work for a year.

Laid-off customer service representative Maria Jones, 51, of Southwest Philadelphia, lost her job in March, but just started looking now.

“I hope it is going to be easy,” she said, but given her age and the economy, she’s worried.

That’s why, for her as a voter, the economy and health care are the two top issues.

“At first, I was leaning toward Obama,” she said, “but I’m still listening.”

Our Perspective:

The economy still is the number one issue that is foremost in peoples mind. With a rising cost of living, (gas, utilities, food, health care being the hot button issues), the American people are focusing on who will provide the best leadership to turn this economy around.

Who is going to implement programs to reverse the tide of growing unemployment?

This is a very important presidential election. Be sure to familiarize yourself with both candidates views. Business as usual is no longer acceptable, for it has led us to this point. The new president must be able to think outside the box and implement programs that will restore confidence and jump start our economy.

Let us know your thoughts? Email george@hbsadvantage.com