Unemployment Law

I’ve worked for quite a few sleazy employers.  Now, I have a history of switching jobs too many times.  My last job was almost 2 years, but I had a lot of short-term stints before that.

One interviewer said “I’m concerned to hire you.  If we have to fire you, we may be on the hook for your unemployment claim.”

The employer pays unemployment taxes.  The tax is based on the amount of claims by ex-employees.  This provides a disincentive for employers to hire someone, because their unemployment tax might increase if they’re forced to fire someone.

Employers are taxed based on amount of claims.  There’s a flaw in this algorithm.

If you hire someone who was formerly receiving unemployment, you should receive a credit against your unemployment tax!  As far as I can tell, the law doesn’t provide for this.  The State is eager to tax, but the State rarely gives credit back.

Because my new employer hired me, they saved my ex-employer money in unemployment claims.  Technically, my new employer should get a credit, because they saved the State unemployment money paid out.

My new employer is paying me less than my old employer, *BUT* they are paying me just barely enough that I would have lost my unemployment benefit if I refused the job.  That was amusing.  I would have taken it anyway, even if it was a little less.  (The law in NY is that you must take any job offer that’s at least 80% of your last job, or you lose eligibility.  They offered me 81% of my last salary.)

That is an amusing quirk of State law.  If you hire someone who was formerly receiving unemployment benefits, you should get a tax credit!  The unemployment tax is a disincentive for hiring someone.  The State will raise your taxes if you hire someone and then fire them, which penalizes companies who ambitiously hire people.  In the UK and Europe it’s far worse than in the USA, but there are also taxes on hiring in the USA also.

4 Responses to Unemployment Law

  1. I would be more offended that the New York law seems to encourage a potential employer to underpay you. If the potential employer was going to offer the same amount you were making before for the position, but knew if he offered 82% of what you were making that you would be forced to take it, I would think many employers would choose to pay the lesser amount, even if they were willing to pay more before finding out about your umeployment history. I mean why not? You can’t say no…

    • I could refuse the job, but then I’d lose my unemployment benefit.

      The risk of underpaying me is that I might find a better job. However, switching jobs isn’t easy. Quite frankly, nobody wants to hire someone who’s older than them, more experienced than them, and smarter than them. My options are severely limited. I don’t have much negotiating leverage.

      Hopefully, they’ll start making more money from their website in a few months, and will be able to pay me more. In this case, I sincerely believe that their limitation is “We don’t have the cashflow to justify a high salary!”

  2. I’ve had some sleazy employers before.

    In fact the last two companies I worked for still owe me money!

    The very last company I worked for are real scumbags and I avoid them like dog dirt in the street. The owner wrapped himself up in a tissue of lies and I’m sure told different sets of lies to different people at different times. Not a nice character to have to deal with.

    The second last company I worked for also owes me money. They are getting a bad reputation with former staff openly saying bad things about them. However they are not total scum. I did write to them saying by law they owe me money. From memory it is between one to two thousand dollars. They ignored my letter.

    My work history might be a bit better that yours – apart from my current self-employment which I’m sure counts against me! I have a collection of early jobs that lasted a year, but more recently have stayed much longer in jobs. However the reason I stayed so long in my last job (a real scummy horrible place) was simply because if I resigned I knew every new employer would complain about my work history.

    My regret is now that I didn’t leave sooner. The owner was a psychopath and I have suffered mentally for staying so long.

  3. I wonder if a US company fires a h1b non-immigrant worker that they don’t have to pay extra employment tax, as h1b non-immigrant workers are not entitled to any unemployment benefits if their job ends.

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