As a nonprofit employer, state unemployment taxes are one of the few costs you can directly control. Unfortunately, layoffs and the ups and downs of the economy can directly affect your tax rate, leaving you with higher operating costs and less funding to go toward your mission.
But, you can directly impact your bottom line with a few strategic approaches to reducing your unemployment costs.
Tip 1: Document Everything.
Effective documentation is absolutely crucial to reducing your unemployment costs because, as the employer, you will often carry the “burden of proof” with the state.
Although good documentation can also help in matters related to the EEOC and employment litigation, documentation for discharges and voluntary quit situations is different. Namely you want to be extremely careful of the language you use in documenting a voluntary separation or discharge because the state has specific legal definitions of terms such as “unsatisfactory” work. And you will want to be careful that you are protesting claims that do not constitute good cause in a voluntary quit. These could include quits to attend school, get married, change careers, staying at home with children, or job abandonment.
Also, make sure that your organization is keeping good records. Whenever you provide policies and documentation to employees, be sure to obtain a signed acknowledgement of policies and changes to policies, and keep the receipt for at least 18 months.