Successful business owners have plenty on their plate; often too much. There are so many tasks that need to be done and processes that need to be managed that it becomes easy for certain things to fall through the cracks. One task that we see fall through the cracks too much is a business owner not managing their unemployment tax account. The most common mistake we see is that business owners simply don’t pay attention to their unemployment tax at all. Many business owners don’t even realize that their unemployment tax rate will increase (or decrease) based on their actions. There are a couple of steps that any business owner can take that could potentially save a significant amount of money.
The first step is to pay attention and take action. This might sound like a no brainer, but we see many businesses owners lose out on the opportunity to contest an unemployment claim because they did not respond in time. Sometimes they don’t even open their mail in time! If a separated employee files an unemployment claim (even if they voluntarily quit) the business owner has a very short window to contest the claim. Usually the response needs to come within 10 days of receipt, and if that deadline is not met, the ex-employee will be awarded unemployment benefits, and the business tax rate may increase accordingly. A proper response in a timely matter could save a business like this thousands of dollars.
The second step is to consider “pre-pay” options. Again, this requires the correspondence from the unemployment division to be responded to in a timely fashion. Many businesses will be offered the chance to “pre-pay” some of their unemployment tax in exchange for a reduced rate. In some situation the reduced rate can create significant saving. Each situation is unique and the “pre-pay” option is not always the best solution, but it should definitely be considered.
Finally, the most important piece of advice I could give is for businesses owners to pay close attention to any correspondence from the unemployment division. If you are not sure how to respond or if you should respond at all we are happy to help. Feel free to reach out to us at email@example.com. You can also find some helpful information directly from the source at http://www.mass.gov/lwd/unemployment-insur/resources/questions-and-answers/employers-and-businesses/unemployment-insurance.html.