Unemployment Insurance

A couple of the money shows I have watched the last couple of days have brought up as part of the deficit reduction and improve business is to have individuals pay for their own unemployment insurance vs the company and government. At first I thought it was crazy then I just realize I have job insurance that I actually pay for out of pocket to protect me if/when I get taken out of service. It really isn't that expensive probably because it is unique.

It would lower the cost of doing business, possibly increasing your wages or an added benefit like health ins. It would save the states money, what is it Indiana owes 4 billion to it's unemployment fund. Saving the state money to pay for schools, highways, medicaid reimbursement etc.

What do you all think?

Interesting... I had to read about how unemployment insurance works.

So we would basically all buy AFLAC and then release our employers from the burden of paying their unemployment insurance. The only problem I would see is how would claims be contested etc... I think that the amount of claims against a business affects the overall amount they pay, in the same way that claims against your auto policy affect your premiums.

the other problem is, the employee would then pay 100% of their unimployment instead of the half they do now..even less take-home? those not picking up on their own unemployment would wind up getting other assistance with bills and housing etc..so i doubt it would be a state savings.

floridafun wrote:the other problem is, the employee would then pay 100% of their unimployment instead of the half they do now..even less take-home? those not picking up on their own unemployment would wind up getting other assistance with bills and housing etc..so i doubt it would be a state savings.

I know no place where you pay for your unemployment insurance that you get from the state. It is the company that is taxed for that fund, not the individual. As far those not picking up there own unemployment, just make it mandatory like they are health insurance.

I was looking at my check stub to find where I paid unemployment. I dont think I ever have... I'm (obviously) less informed on this than I thought.

Pez wrote:I was looking at my check stub to find where I paid unemployment. I dont think I ever have... I'm (obviously) less informed on this than I thought.

You don't pay it directly ... the employer pays FUTA and SUTA *Federal and State unemployment taxes" ... rates are based upon past experience of laying people off.

i may have been misinformed but i know i have been told the employee pays half as part of our taxes. maybe i was watching fox that day

floridafun wrote:i may have been misinformed but i know i have been told the employee pays half as part of our taxes. maybe i was watching fox that day

I dont think so... I think that's medicare or something.... I know that jcopetti is right, that it's based on an employer's record of laying people off/firing etc... and I read also that they can likely pay little or no unemployment tax at all. If it's based on a company's record for unemployment it would not seem very fair that an employer would pay half...

Employees pay nothing, all paid by the employer.

Costs are Truly Shared by Federal and State Government
Operating as a federal-state partnership, UC is based on federal law, but administered by the states. The UC program is unique among U.S. social insurance programs in that it is funded almost totally by either federal or state taxes paid by employers.

Currently, employers pay federal unemployment taxes of 6.2 percent on the first $7,000 earned by each of their employees during a calendar year. These federal taxes are used to cover the costs of administering the UC programs in all states. In addition, the federal UC taxes pay one-half of the cost of extended unemployment benefits (during periods of high unemployment) and provide for a fund from which states may borrow, if necessary, to pay benefits.

State UC tax rates vary from state-to-state. State UC taxes may be used only to pay benefits to unemployed workers. The state UC tax rate paid by employers is based on the state's current unemployment rate. As their unemployment rates go up, the states are required by federal law to raise the UC tax rate paid by employers.

Almost all wage and salary workers are now covered by the federal-state UC program. Railroad workers are covered by a separate federal program. Ex-service members with recent service in the Armed Forces and civilian federal employees are covered by a federal program, with the states paying benefits from federal funds as agents of the federal government.

http://usgovinfo.about.com/od/federalbenefitprograms/a/ucprogram.htm