General Question

JLeslie's avatar

If you lay off an employee do any costs go up for the owner?

Asked by JLeslie (52887points) 3 weeks ago from iPhone

I’m seriously thinking about changing a position in my company, which will likely mean laying off an employee.

I assume they will be entitled to unemployment. How does that all work from the employer’s end?

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14 Answers

SQUEEKY2's avatar

Well off the top of my head it will cost you more in labour as other employees have to make up the difference meaning more over time ect,ect.
If you are worried about them and unemployment benefits make sure they have enough hours to qualify for those benefits.

Tropical_Willie's avatar

Your payment to the unemployment will increase because of your history of laying off someone.

It is a history base payment in my state.

JLeslie's avatar

^^I was afraid of that. Maybe I can google some info.

@SQUEEKY2 I was only worrying about the unemployment payment issue actually. Existing employees won’t be doing more work, we would hire someone to do more work for the same wage hopefully. She is paid to be “on call” in a sense, so I am paying her for doing nothing too many hours of the day. Plus, she isn’t answering the phone enough, which is exactly her job. Answering phones and scheduling. Calls go to voicemail constantly, and we get some complaints from customers that they don’t always get calls back in a timely fashion. Even when we call she often doesn’t pick up.

We inherited her from the previous owner and I want to instead hire an admin here who can work part of time in my home/office and not only answer calls and schedule, but also enter the sales for the day. It will save me two hours of work a day, and hopefully cost me nothing.

I might initially just cut the current employee’s hours. Maybe she will quit. I have my doubts. If she was answering the phone as she should I would leave things alone, but she doesn’t.

Espiritus_Corvus's avatar

^^Your business, the news business, is extremely time sensitive. You need to get rid of her right away. She is costing you beaucoup bucks. I would set up a face-to-face, explain that the business is extremely competitive and time sensitive and that she alone is cheating the company out of money that could mean new hires and pay raises for other employees—and how unfair and irresponsible that is—then Let. Her. Go.

JLeslie's avatar

^^Not the news business. That’s all subcontractors. That’s not my business, I’m a subcontractor for that company also.

I’m talking about the business my husband and I own.

Espiritus_Corvus's avatar

My statement still stands. She is effectively closing the door to your shop when people want to do business with you. On a side note—and this is not why I recommend firing her—firing a person in the State of Florida does not affect your unemployment insurance payments because as a dismissed employee, she is ineligible to collect unemployment. She should have thought about that before she accepted a job that she didn’t intend on taking seriously.

Maybe you can wake her up to this by describing the situation she has put both of you in and give her another chance. You sound like the kind of person that would do that. Give it a shot. But remember—she is costing you more money than just her wages.

gorillapaws's avatar

If you terminate someone for cause they’re not eligible for unemployment (IANAL). Be sure to have good documentation because the employee can contest it. I would write her up (and have her sign the disciplinary action) for every infraction and have a paper trail you can point to if the If she tries to contest it. Have a documented policy for your companies employee manual that they’ve signed off on.

We eliminated a position in a similar situation and had many years of elevated state unemployment tax as a result. This is not legal advice, laws vary by state, you may wish to consult an employment lawyer in your state (or at least read up on the specifics for your state).

JLeslie's avatar

I know if I terminate for cause she won’t get unemployment, but she is one hour away. It’s difficult for me to really prove what’s going on. I am going to call my phone company and see if I can get in writing how many calls go into voicemail. One phone company I was with I could hear and see vmail online. I tried to search the website, but no luck. I can search the phone bills to see if she is making the marketing calls she is supposed to make every month.

I can call her every day and start recording it so I can formally write her up. If she did turn things around that would be great, because the customers like her. But, even still it would be better if we had someone local who could do some data entry.

I do think I’m losing business. We kept her initially because it was one less thing to deal with when first taking on the business. Now, we need to deal with it.

I’d much prefer she quit if it doesn’t turn around. First, if she quits it’s better for me. Although, if she does it before I’m ready that would suck. Second, if she quits, that likely means she has a job already lined up, which is better for her. I’m not angry enough at her that I’d be happy she’s unemployed. FL has crappy unemployment, I have no idea if loss of an income is a big financial burden for her.

Espiritus_Corvus's avatar

^^Yes. Do what you have to do. A great company is made of great people. She’s not great people.

You are in control of this. When you’re ready to take over, talk to her and confront her with the evidence.. Ask her point blank if that is fair to your family. Ask her what she would do if she was in your place. Most people walk at that point or promise they will get to work. At that point, you can either give her two weeks to get another job, or give her another chance under watchful probation.. Most people walk rather than be put under scrutiny. At that point you can either list it as a lay off so she can receive unemployment, or a termination where she can’t. It’s all up to you. You’re the boss.

JLeslie's avatar

^^If you deny someone unemployment they can challenge it and then you have prove your case. It’s not as simple as you just check a box.

Espiritus_Corvus's avatar

Very few people challenge unemployment office decisions. Appeals take forever. They just move on. But, just in case, that is why you must document everything and get hold of the telephone company as you said you would.

abcbill's avatar

JLeslie…I feel like I am getting about half the information I need—partly because we are on a what amounts to a listserv.

Here are some of the items needed to help you out…and, yes, I do have the background
1. Are you in the US and if so, which state? State laws vary..I’ve been an HR Manager/Director in 5 different states with offices in 3 others and employment laws vary widely.

2. Is she REALLY a contractor…or is that a “gentle fiction”. There are some very nasty regs on what constitutes a contractor relationship and from what I have read so far, she meets NONE of them. One simple question…do you issue her a 1099?

3. I don’t really understand your phone system. With the availability of “software”-driven phone systems, why are you going to a phone company?

4. If she lives an hour away, have you gone to her or had her come to you so you could properly instruct her…face to face…in her job responsibilities since you are now the owner of the business?

5. Are there “protected class” implications? Is your company large enough, by head count, to fall under either State or Federal EEO guidelines?

Here is my Linkedin profile URL…contact information is towards the bottom. Call me and we can discuss… https://www.linkedin.com/in/billwrighttf

JLeslie's avatar

@abcbill

She is an employee, not a contractor.

My business is so small (5 employees including my husband and me, that I don’t really have a protected class law to worry about, but I don’t think she is old enough to be protected anyway to answer your question, and her only minority status is she is a woman). Plus, this is an at will state. I am not worried about her suing me in general, it’s just a question about unemployment as stated in my original question.

We provide her a cell phone and she takes calls from customers who need appointments. Our scheduling system is online, so she simply enters the customer information online.

She knows the instructions. She’s been with the company since before I owned it. Her only instruction is answer the fucking phone! Once she does that she is very good with the customer, and overall very good at scheduling and entering necessary data.

I’m in Florida.

My husband is HR in his previous life, but he was Comp and Ben. Still, if he bothered he could easier than me get answers just through contacts, but even so I’d probably not completely trust anyone but the state anyway. Although, I do appreciate all the answers here, it prepares me and helps me think things through. I used to be a manager in a large company, and so I dealt with hiring and firing, but I just never knew if there was financial impact to the company when the employee received unemployment.

JLeslie's avatar

As I think this through more I think a formal writing up is in order. I need to see what my husband has done so far. If he has done any sort of annual review, that sort of thing. Initially, we really needed everyone to stay in place, we were new, learning, and didn’t want an employee to quit and leave us in chaos. For this reason we overlooked some things. I know my husband has said something about the phone to her more than once. This last time she said her phone is so old she thinks it has problems. It is very very old, but I don’t think that’s it. My husband told her that we bought a new phone for her. We wanted to do this anyway. The last owner really was cheap in some areas.

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