Do not get me started on unemployment benefits. Someone, and we do not know who as it was before our time, collected over $12k in unemployment insurance from this business. As we are a successor to that orignal business, that $12k is still on the books as far as the state is concerned. We pay the highest possible premiums every month because, guess what business owners, YOU are required to pay that back if you are in an overage situation. Being as no one here makes a salary except the PT summer help it will take approximately 50 years to pay it back, $15/paycheck.
Keep that in mind if you are buying an existing business..
Okay... sometimes I'm really clueless when it comes to the US and I guess this is one of those cases... isn't unemployment an insurance and therefore not collectable?
Premiums in Canada are the same for everyone and every company. And the system is entirely self financed. In fact, it's often been responsible for surpluses. We pay 1.78% of insurable income, if we qualify (I don't, since I'm self-employed). Employers pay 1.4X that amount, so 2.492%. There are no contributions from government at all and the rates don't change from business to business.
.
The unemployment 'insurance' payment is made to the gov't that then disburses the payments as former employees make claims. Although it sounds like it's an 'insurance policy' that anyone could claim on, if you have few employess and a big draw (say you lay off half your employees after they've only worked for a year, and they all file a claim) you end up in the minus as far as the gov't is concerned. You have used more than you put in and you have to pay higher rates until all that money is paid back.
Other people besides AI have mentioned this one before. I don't understand it either but it sounds expensive.
It appears that if you have a lot of employees, you'll probably never end up in the minus and it's not something you need to think about. It's more of a very small business problem.
It's another reason businesses are told to list jobs as 'seasonal' or 'temporary' so the employee knows the job will end and there are no unemployment benefits to be garnered at the end of the employment period.
.