Understanding the California State Unemployment Insurance tax rates can help you manage your costs.
As a business owner, unemployment insurance is a virtually unavoidable cost. Even though there is no way to completely avoid paying for the policy, there are steps that you can take to help reduce the tax rate by decreasing the number of claims that are filed.
Unemployment is funded by taxes that are paid by employers on the amount of the wages that they pay their employees. The tax rate for each employer is slightly different. An employer’s tax rate is influenced by the number of unemployment benefits claims that have been made in the past against the employer. The more claims that have been filed, the higher the tax rate will be for the employer. Employees’ wages in California are never deducted from in order to finance unemployment.
When an employee files a claim for unemployment, a Notice of Unemployment Insurance Claim Filed will be sent by the Employment Development Department (EDD). If an employer wants to contest the claim, they will have 10 days to do so. The employer will have to be written and include all material and relevant facts that show why the employee is not eligible for unemployment benefits. The most common way that an employer can dispute an employee’s eligibility for unemployment benefits is to show that the employee was discharged or terminated through no fault of their own. In other words, an employer will need to argue that the misconduct of the employee was the cause of the unemployment.
For more information on California state unemployment insurance, and to invest in a policy to protect your company, contact Purves & Associates Insurance Services. Serving Davis, Sacramento, and surrounding Northern California areas, we can help with all of your business insurance needs to keep your company protected.