I also have my doubts about this program. Employers are humans, and humans never associate "quality" with "discount".

Right now, the people who are unemployed face the real risk of exiting the economy altogether, along with their knowhow, and this will cost the economy as a whole in the long term.

Meanwhile, businesses are not going to hire if the consumers aren't there.

The problem with trying to restart the economy with government stimulus is that people are maxed out on their debt. The debt is acting like a sponge, sucking out any additional money that come from the government. The NPR Planet Money talked about how Japan's economy entered its longest growth period post the crash when the PM forced the banks to clean up its bad loans and recapitalize. Subsequently, government stimulus started to take effect. The government has been reluctant to do this, and it will cost the US in terms of its economic dominance as competing countries race ahead on its capital.

I believe any government money is better spent not trying to put people back in employment through incentives, but instead keep these people "engaged" in the economy. Be it through reimbursement of expenses in attending job interviews - fuel is expensive when you are out of work; Making the pool of "consultants" and "contractors" that you allude to more visible.

The mainstay of jobs post crash is going to be a small pool of permanently employed plus casualized, short term contract work. The sooner the government recognizes this, the better.

What could possibly go wrong?

Can you elaborate on this? It's something I've long heard and failed to grok. How can an employer, as normal business practice, have to still pay a fired employee any amount?

Every year you have to pay a percentage of your total payroll as a tax, called Unemployment Insurance. If someone is fired or laid off, its from this pool their unemployment checks are drawn.

The percentage each company pay is based off a table. On this table there's 2 rates listed for each business size (its tiered, bigger businesses pay more). Rates last year for my company were around 1.7% and 3.2%, IIRC.

So, if you fired >=1 person in that year, you have to pay the higher rate. If you fired nobody, you pay the lower rate.

Note: if you fired 1 or 10 people it doesn't matter - you're paying the higher rate.

That makes the cost of a replacement employee higher because you're paying for the cost of prior employees' unemployment claims when you are making unemployment contributions for the new employee.

For more details, go to the source: http://www.irs.gov/businesses/small/article/0,,id=99921,00.h...

Edit: talk to your own attorney though.

In other countries where employee protections are better there is usually an actual written contract in place that says employment must continue up to two months after notice is given from either party.

And yes, that does make contractors more practical but that's good because it pushes contract rates up.

http://www.irs.gov/pub/irs-pdf/p15.pdf

If you are in the lower rate, i.e 0.6% of the first $7000 in wages, the FUTA tax is... a whopping $42

If so why?

1. Lack of experience 2. You did a start-up for long time & having trouble finding regular work (that's me). 3. Something else?

I hate being unemployed and feel working on my start-up for over four years alone in my garage has handicapped me professionally. Since the investment money ran out for my start-up, I have had two front-end dev jobs. Both positions were at local digital web agencies and both lasted under a year. Since getting laid off from the last job Ive had a hell of time getting my next job. I have 22 months of professional experience and 3 years of coding for my start-up.

I wonder if there are similar stories and experiences fellow members here faced? Also, what did you do to land your next coding job or what are you doing now?

Where do you think that the money to pay unemployment comes from?

I'd like to hire people for some long term work, but cumulative BS like this makes me not bother.

Also, if you are paying for their unemployment, why is unemployment being deducted from their paycheck too?

That's just how it works. It's not how it's written, and it's not how it's supposed to work, but it's how it works.

36% won. So 2/3rds of the time (read: most of the time), employee wins.

By all means, still appeal. But odds are not fantastic. Plan on having to pay out some unemployment that you shouldn't have to. A written employee handbook and records showing when policies were violated will save you some money sometimes, but don't count on it. You can fire employees, for cause, and still see your insurance go up, even with an appeal.

Like you said, these are appeals - not initial claims. That means they're cases in which the court has already reviewed the fairly clear-cut criteria for awarding benefits, determined that they are justified, and has proceed accordingly. Indeed, a court that reverses itself 36% of the time seems remarkably open to appeal by employers.

As far as the 64% of appeals that are rejected are concerned, it IS flat out wrong to say that these are all justified dismissals that they employer had to pay for anyway. After all, this figure also includes cases where employees quit for cause (e.g. flagrantly abusive work environments, failure to pay wages in full and on time, efforts to avoid paying unemployment claims by radically demoting or cutting hours instead of laying off, etc.), as well as cases in which the termination was wrongful, and likely to do lasting damage to the employee (e.g. by way of demonstrably slanderous performance reviews, for refusing to engage in abusive or deceptive practices on behalf of the employer, etc.)

You're also disregarding the way incentives function here. Since the employer is on the hook for damages - and the cost of an appeal is trivial - they have a strong incentive to fight, even in cases where they are monstrously in the wrong. Indeed, HR people will tell you that they automatically appealing everything, no matter what, as a matter of standard operating procedure. The idea is that by developing a reputation for reflexive fighting, they can use the notoriously slow pace of justice to delay payments for the better part of a year. Accordingly, people with limited savings who simply want to get the hell out of a truly unbearable situation can't count on unemployment insurance to finance their job search. Instead, they have to line up their next job before they quit their current one, rendering the question of unemployment moot.

If you are fired "with cause" (i.e. you did something wrong) you aren't eligible for unemployment. If you quit you are not eligible for unemployment. Only if you are fired "without cause" are you eligible for unemployment payments.

Let's be careful about this. It depends on the reason you quit. If you were being harassed and the company did nothing about it, or you had unsafe working conditions, etc, you can still collect.

It's better to say that if you quit for reasons that have nothing to do with the employer, you cannot collect unemployment.

I had a co-worker who quit because the raise he was promised (in writing) at hiring time never materialized. The company had to pay unemployment while he looked for work.

I understand that no-one likes to do the business-overhead side of things in small businesses. But either the costs of paying (undue) unemployment aren't that big of a problem, or the employer has no-one to blame but themselves for not documenting cause.

If you have an equivalent recipe for a marginally performing software developer that doesn't cost more to implement than just paying the unemployment : I'd love to hear it.

Also consider team morale. Waiting for several phases of failure to "document" your case is a great way to lose your top performers and lose a customer. I think it's less expensive just to fire -- ideally /w severance in exchange for unemployment, if your state permits it.

Yes and no. The basics are the same: you need to document responsibilities, goals and performance. Document performance that doesn't meet the goals. Document some sort of plan by which you try to help the underperforming employee meet their goals and then document their continuing performance.

Is it potentially cheaper to just pay a modest severance or unemployment insurance? Quite possibly.

But documenting performance is not voodoo and the fact that just paying a modest severance or unemployment is cheaper than documenting performance rather undercuts the assertion that unemployment costs are onerous.

Not everyone is a self-starter or "rockstar". Failing to document clear responsibilities and goals and then measure performance against those goals shortchanges you and them.

This may be an unpopular sentiment around HN circles, but just expecting every employee to "get it" and not having a consistent process to deal with underperformance (which can have many different and often addressable causes) is a crappy way to treat employees in my view.

From this country? That matters much more than whether they'd be contract or full-time.