A pretty interesting piece in Jay Goltz’s “You’re the Boss” blog on how unemployment tax is paid for (in Illinois, an employer can pay up to $1.48 per dollar that a former employee collects in unemployment benefits). Goltz argues that this creates a disincentive for employers to hire, knowing that a prospective employee who turns out to be a failure will cost the company in time lost and extra unemployment tax.
Speaking of which, there’s this amusing nugget of a negligent employee who almost cost Goltz’s company that incremental tax, despite “working” for 21 days:
I have recently learned that you can be charged with a claim even if youâ€™ve employed someone for less than 30 days. We fired someone after three weeks because she was text-messaging her friends all day. After we told her twice that she had to work during the day and stop texting, she put her phone away. We then noticed she was leaving her desk drawer open and looking into it a lot. She was now texting out of the drawer.
Now is a good time to refer to my colleagues Jeff Larson and Olga Pierce’s fantastic work in documenting the crisis in states’ unemployment insurance funds. Jeff devised a pretty smart way to scrape the information, and he and Olga came up with a formula to accurately predict whether states’ funds were in the red (see their nerdy formula page here).
Incidentally, Illinois, Goltz’s state of business (he owns five small Chicago businesses), is in the shitter for its unemployment funds, so to speak, according to ProPublica’s Unemployment Insurance Tracker.
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