Enough of the history lesson, you say? Well, fine, I was getting a little tired of talking about the past too. Let’s talk about the future! How you plan to become a better employer and a more successful business in the year 2007. Believe it or not, unemployment insurance can help you do just that.
For starters, if you were having a dry run in 2006, and had to let go some of your employees in this bad spell, unemployment insurance means that many of these employees will still be available come 2007 when your luck turns around, those work orders start coming in, and you need your full work force back again. That is one of the main reasons for unemployment insurance in the first place—to have a skilled work force that will stick around the community even when there is an economic downturn. I know, I know. I am back on the history lesson again!
Another way that unemployment insurance can benefit you and your business is that it can keep your company and human resource department organized. Now, hear me out on this one. It is a logical argument to say that, because you are required to report on your wages to the state of Vermont every quarter, that you would have to keep more accurate books in order to comply with the law.
By keeping up to date and full personnel files—complete with exit interview forms, employee separation forms, absence reports, and disciplinary action reports—you can also help the Vermont unemployment insurance system track down when former employees should not be receiving benefits. How do I come up with this stuff? Actually, I got this info directly from the Vermont Unemployment Insurance Program folks. They think organized employers are the greatest as well.
In order to determine whether an employer is required to provide unemployment insurance coverage to an individual, the department utilizes an employment “test”. This test is expressed in simple terms in Vermont Unemployment Insurance posters.
Under statute and case law, an “employment” relationship will exist unless and until the employer is able to demonstrate that all three parts of the so-called “ABC Test” are met. Those tests are:
A. Such individual has been and will continue to be free from control or direction over the performance of such services, both under his contract of service and in fact; and
B. Such service is either outside the usual course of the business for which such service is performed or that such service is performed outside of all the places of business of the enterprise for which such service is performed; and
C. Such individual is customarily engaged in an independently established trade, occupation, profession or business.
The Vermont Legislature chose to use the ABC test, which is much more inclusive than other employment “tests”, in order to ensure broad unemployment insurance coverage. There has been significant case law developed over the years that helps define situations where unemployment coverage must be provided.
The Vermont Supreme Court has made it clear that direction and control will exist where the employer has the “right” to provide direction and control, regardless of whether such direction and control is actually exercised. The employer’s usual course of business is any business activity the employer chooses to engage in. Likewise, the employer’s place of business is all places where the employer conducts its business, not just the main location or office from which the employer conducts its business. All business locations, not just the main office also need to post Vermont Unemployment Insurance posters so that employees and other workers can view them.
Finally, being independently established means being established in a similar type of occupation or trade as the one being examined, and generally the individual must have some history of providing similar services for others in order for the “C” part of the test to be met.
Employers should understand that the department will follow Vermont law and use the ABC Test to determine if a worker is an employee for unemployment insurance purposes, and will be liable to report wages paid to and pay taxes on those wages unless all 3 parts of the ABC test are met. This is true even if the IRS “Evidentiary Factors” Test has a different outcome. Since misclassification of employees is the single most common problem with regard to the proper reporting of individuals for unemployment insurance purposes, it is imperative that you understand the rules and provide the correct education to your employees by posting Vermont Unemployment Insurance posters.
I found that when it comes to Unemployment Insurance Law, each state has its unique set of rules and guidelines that it puts forth. These rules and guidelines are built around Federal regulations and standards in order to govern how employers handle unemployment insurance.
If an employer in Vermont has more than 4 employees, then it is mandated that the employer have unemployment insurance. This unemployment insurance is a small fee that the employer pays so that in the event that an employee of his company loses his job, the employee will have a cushion until he is able to find a new job.
One common mistake amongst employers and employees is that unemployment is an entitlement to all residents of a state because the residents pay taxes. In actuality, unlike income tax and social security tax, unemployment benefits are paid entirely by the employer and the insurance company. As such, employees and residents of Vermont are not entitled to receive unemployment benefits.
However, a resident of Vermont may qualify to receive benefits. In order to qualify, the employee has to have first been employed by an organization for a base period of time, during which period the employee needs to have earned a base rate of pay. If the employee can prove that he or she has, in fact, been employed, then the employee must prove that he or she is unemployed through no fault of his or her own. In most cases, the employee will have been laid off or the job will have been eliminated in order to the candidate to qualify. If the candidate simply quits employment, then he or she may not qualify to receive unemployment benefits.
Next, the candidate may receive some unemployment benefits as long as he or she has no other full time employment and as long as the recipient continues to search for work. The candidate may find part time work and still receive benefits of unemployment.