Another glaring problem with the Indiana Unemployment system
Posted by Mike Sylvester - 4/20/09 @ 7:30 am - Filed Under Uncategorized
In my earlier posts about the Indiana unemployment system I had several “seasonal workers” post comments telling me that seasonal workers “deserve” unemployment benefits.
Let’s consider my business. My wife and I run a public accounting business here in Fort Wayne called Small Business Services CPA Group; SBS CPA Group for short.
We provide a lot of services including bookkeeping, tax planning and preparation for individuals and small businesses, QuickBooks support and training, Assurance services including compilations, reviews, and audits, and Business Valuations.
We employ three CPA’s year around and hired two interns from IPFW who worked for us part time this year during our busy season. This year our busy season ran for the first 15 weeks of the year. Now we will slow down and we will work a lot less hours. Our three CPA’s worked an averageof 61 hours per week the first fifteen weeks of the year.
In summary the three of us worked about 2750 hours the first 15 weeks of the year. The next 37 weeks of the year we will likely work about the same number of hours; however, they will be relatively evenly split over those 37 weeks. We currently plan on having one of us work an average of 32 hours a week, one 24 hours a week, and one 16 hours a week.
By any definition we run a seasonal business.
My wife and I are the owners and I plan on working 24 hours a week the rest of the year and she plans on working 16 hours a week the rest of the year. This will allow us to not have our children in daycare the rest of the year; I get the kids each Tuesday and Thursday and Karena gets them the rest of the week!
Per the current rules in place by the Indiana Department of Workforce Development I am almost certain the I could “lay my wife off” and she could actually draw unemployment for the rest of the year.
If we went this route Karena could likely draw about $400 a week in Unemployment benefits and I could cover all of her hours at our business. This means she would likely draw about $15,000 in Unemployment benefits if she qualified for the program for 37 weeks (Which I am pretty sure she could).
Based on the rules currently in place I believe that we could do this every year and that in most years she could draw unemployment benefits for at least six months!
This is 100% absurd and is one of the fundamental problems with the Indiana Unemployment system.
In my example Karena could draw $15,000 this year in Unemployment benefits and it would not cost us another dime in Unemployment taxes this year. Next year our rate would increase and eventually we would hit the maximum rate. Once we did we would pay in an extra almost $1000 a year in unemployment taxes.
We own and operate a public accounting firm. We work a lot of hours the first 15 weeks of the year and do not have to work as hard the rest of the year because our work slows down after the tax filing deadline of April 15th.
I think it would be wrong for us to lay Karena off and for her to collect Unemployment benefits.
What do you think?
P.S. We obviously are not going to draw unemployment benefits; however, I am curious how many of your think that we SHOULD be able to draw them!
Comments
28 Responses to “Another glaring problem with the Indiana Unemployment system”
Leave a Reply
Mike,
As you know I am opposed to companies that game the system in this way. It is 100% unfair for companies to use the unemployment system to subsidize their workers’ salaries at the expense of everyone else.
And that’s exactly what’s going on when businesses are shutting down for a month (or longer) every year. It’s scheduled and they know their employees will draw unemployment and it won’t cost them nearly as much in unemployment taxes.
They are paying in much less than their employees are taking out and it isn’t because of some hardship - it’s by design
That is unsustainable and is why we are where we are…
I don’t think it would work for the employees that you hire for just 15 weeks. The way I read the rules, you have to work 7.5 months out of a 12 month periond in order to collect unemployment. I guess technically you could do that with multiple employers, but that seems unlikely to me. I bet you are right about your wife for the first year, but after that I think it would become more difficult.
Justin,
I did not include my interens in the example for the reasons you mentioned…
Why would it be more difficult in future years, because of the 7.5 month rule maybe?
In that case I could bring her back for 7.5 months and lay her off for 4.5 months…
This has got to be changed.
Mike
I’ve got another twist on the unemployment issue. The Census Bureau is hiring and training now in preparation for the 2010 census. I know two people, who I have told about the census work, who said they have no intention of applying because they would be hired, and lose their unemployment. They see the unemployment check as *FREE* money, and there is no reason to go get a job when they can sit home and collect a check without having to work at all. Then they can run around town doing whatever they want, including driving to Hoosier Park to play slot machines. They even joked to me one day that I needed to work some overtime so they could get a bigger assistance check (though that isn’t really how the system works). It just irks me that these lazy a$$es are gaming the sytem, and getting away with it!
The unemployment office should match these jerks with Work One or some other jobs organization in order to get them off their butts and back to work!
I have one better for you. Talk about our messed up unemployment system. I know a person who is retired receives a check everymonth and works for a seasonal tax office from Jan 1 Until April 15. He collects the maximum unemployment after he is done with his seasonal work at the tax company. He was even intitled to an extension last year.
There are people out there like you who don’t milk the system Then there are people who do. No wonder our country is in the shape it is in.
Morality is stupidity; at least in terms of business. In your line of work surely you are aware that only a fine line separates tax avoidance (legal) and tax evasion (illegal). Would you advise a client to take advantage of federal tax law that helps him avoid a substantial amount of tax every year even if the client thought the law was morally dubious at best? If not, you have to ask yourself how well you are serving your clients’ best interests. If so, then why wouldn’t you take advantage of similar laws when they benefit you?
Secondly, you are making an assumption that the legislature was too dumb to foresee this problem and legislate around it. That is certainly a possibility, but it is not necessarily a concrete fact. I fully support your right to use the legislative process to get any unsustainable laws changed to better suit your politics. In this case, I more than likely agree with you. But why would you let your perception of Indianapolis politics color your otherwise sound personal financial outlook?
Cheers,
Steve
Without this system to get roads paved it would cost the taxpayer 75 dollars an hour per worker instead of 40, it would cost people 10k for landscaping instead of 5k. It’s fundamentally wrong but so is China owning 1/8 of the U.S.
Maybe I’m just a laymen but you can’t enjoy $600 flat screens and want them built in the U.S. by folks that make 30 dollars and hour.
With the major issues that surround the extensive problem with unemployment benefits, I think energy should be spent on the big cracks and not the small ones. You would be smart to get your wife on unemployment, you’re either along for the ride or pushing the cart.
Well here is the best of all…. I had an employee voluntarily quit and sign documents that she quit and then told the the unemployment office she got laid off… and i fought it for 6 months and lost. And I was on vacation when she quit, So how did I lay her off if I was on vacation? And she sat at home for a year and Half hanging at the pool, and collecting her $426.00 a week,
Lisa,
That is absurd and helps illustrate the problem. The system is broke!
Mike
“And she sat at home for a year and Half hanging at the pool, and collecting her $426.00 a week,”
Holy crap, I gotta fire myself or lay myself off.
I thought Indiana’s max weekly gift was $390?
William,
I think the Feds increased it by at least $25 a month…
Mike
How about the fact that non-union workers are discriminated against? I’m an electrician, I went through an apprenticeship and four years of schooling to become one. Because I’m not in the union I have to take any job offered to me regardless of pay rate or the field of work it’s in. However, if you’re in the union, you are exempt from all the work search requirements. You can basically collect as long as you have benefits available, getting whatever federal extensions you can, without ever looking for work.
So now, I’m going to have to take a job out of my field, making less money, and then quit it in a few weeks when I go back to work. I’m not saying I shouldn’t have to look for other work, I guess I’m saying why should someone doing the exact same job NOT have to look for work just because they’re in a union?
Mikhail, I agree with you. Union member should not have any privilege that is not afforded anyone else. I believe the Federal Extension though requires all to look for a job. Only the first 26 weeks paid for by the state is up to the state to decide who looks and who does not. If I am wrong on this, please let me know.
You really need to learn the rules. You can not work three months a year and earn the max unemployment benefit in indiana. And i say , SHUT UP, this system is there for those that need it and if you don’t, then leave it alone, and good for you.
Thank you nameless critic! I would bet I have a better understanding of the rules than you do, but that’s neither here nor there. I’ve actually collected a grand total of about 18 months of unemployment over the last 22 years, and only 8 months of that has been while working in the construction industry.
I didn’t get my unemployment this week, the website went down yesterday and now I have to find an open office (The hours posted online are incorrect for almost all offices) and take my work search info in to be faxed to the central office. As far as the federal extension, you can be exempt from work search on it too as long as you’re in a union and you’re union dues are paid. What I find interesting about this is that it’s not at all what the state law says.
I wrote the governors office about all the problems I was having with unemployment and they were kind enough to send me the pertinent sections of the code. Pay attention to the wording, it never mentions unions at all. I brought this up this morning with the rude person I finally got through to, and was basically told that it doesn’t matter, all they accept is union membership.
In accordance with Indiana Code (IC) 22-4-14-2, the Department will excuse compliance with the reporting requirement when an individual is: (1) enrolled in training or retraining approved by the Department; (2) a job-attached worker with a specific recall date that is not more than 60 days from the date the claimant was separated from employment; or (3) using a hiring service, referral service, or other job placement service.
If I’m not “mistaken”, the union is a hiring service, referral service,and job placement service.
Mikhail,
I had no idea there was a difference between union workers and non union workers.
That is wrong and it isnews to me.
Mike
Learn the Rules,
Rather than post ignorant comments you should get up off the couch and get a job. Next you should use your real name instead of cower… Third you should learn the rules because you have no idea what you are talking about.
There is no doubt that my wife could do exactly what I posted and draw the maximum unemployment benefits.
For example this year on April 16th my wife could claim unemployment benefits and she would clearly get the maximum state benefit for 26 weeks. She would get this because she worked all of 2010 and then the first 15 weeks of 2011…
Further if my wife and I took turns and laid each other off every other year then for example she could claim unemployment in 2011, then I could claim it in 2012 and she could work and then we could switch again.
We could play the system and one of us could claim unemploymkent every year after April 16th…
If we were like “learn the rules” we would do exactly that. Luckily other employers in Indiana are not forced to pay these extra taxes so my wife and I can claim them because we do not believe in “gaming” the system.
Mike
You are not “mistaken,” you’re exactly right. You obviously know the definition of a few words, and have managed to find the quotation marks! Now we’ll work on your reading comprehension.
I never said the union didn’t fit that description, that wasn’t the point at all. The point was that many other things fit that description: temp. services, the DWD itself, Indianacarrerconnect.com, they are all hiring or referral services.
My issue is that the ONLY one accepted by dwd is a union hiring hall, even though many different agencies/companies also fit the same description. Once again, I just think either everyone should be exempt from work searches, or everyone should have to do them.
Hopefully you can make sense of that, maybe sound the words out slowly? I apologize if I come off somewhat snarky, but that’s how I interpreted your comment, so I replied in kind.
Slamming the union is not what you want to do here. The only union that obviously exploits all the systems is the UAW! FYI, I didn’t get my unemployment either. Can you tell me why? I’m in the union. Maybe it is not a union thing. May you need to work on your comprehension skills.
Jerry,
We’re still having some communication problems here, so let’s star over and drop all the sarcasm and snide comments (I’m including myself in that statement.
I wasn’t slamming the union, although I do agree with you about the UAW. The skilled trade unions are not a bad thing at all, and it worries me the way the state is moving away from all state funded jobs being prevailing wage. If that continues to happen the unions will have trouble competing and that will do nothing but drive wages down for everyone.
My problem isn’t with the unions, it’s with the preferential treatment of unions over regular workers doing the same job by the dwd. If they are going to be exempt from work searches, so should anyone else registered in an apprenticeship program or holding a journeyman’s card. Or, nobody should be exempt.
As far as not getting unemployment, I don’t ever recall there being problems like there are now before the state started contracting out parts of the process to private companies, that’s something that should concern both union and non-union workers.
These companies come in and take over and the only options state employees have (Their collective bargaining rights were abolished by the state) is to sign on with the private company for a significant cut in pay and benefits, or quit.
I’m still trying to get my unemployment for this week, but nobody at workone or at the state office seems to know what’s going on. All I can say is that if you’re going to file, file at 12:01 am Sunday morning and beat the rush that overloads and crashes the system almost every Sunday.
Ok, truce. It seems my unemployment was held up this week because last week I recieved a letter from them stating that they needed a copy of my updated union card. I guess it takes a week for them to process this information. There has been nobody screwed over more by the dwd than I have been. When I was an apprentice they started the program where we could draw unemployment during the week that we were in school, I never recieved any of that the whole time I was in school. They,the dwd, always had a reason that I didn’t meet the criteria to get it. Even though I met everything that the school said I needed. It’s one of those games that is their game.
Hey Mikhail. I am a firm believer in the UAW and in fact I have been steward for near 20 years. Although I am having doubts in your actual knowledge of how things “really” work in the world. You are probably one of those lazy people that just complain all the time about themselves but never lift a hammer.
Secondly I know unemployment could be tough, but the big picture is that you need to get out there and get a job. Quit standing on my generations coat tails too.
I am pro work and believe unemployment insurance makes Everyone lazy. I am a sheetmetal worker and my rate is $23 an hour. I am currently getting laid off after 10 months of straight 40 hours of back breaking work. My take home pay is around 670 a week after taxes and union dues. Thats not including my 400 mile a week commute about $80 in gas. When i heard im getting laid off i (for a month) heard vacation. I have never drawn or needed to draw unemployment. But if i can make 420 a week doin absolutely nothing im gonna take advantage of it. This system is flawed. DO NOT FEED THE ANIMALS. If u feed a bird at a park, the bird becomes dependent on not working for its food. If government feeds us unemployment, americans have no desire to work for their money. We are only hurting ourselves.
I agree that the system is a bit flawed. Too many people look to take advantage of it. Like you said, you think of vacation. A lot of people feel the same I’m sure. But in my case, I work in asphalt. Once it gets cold, our season is over. Not our choice, its the companies choice and just the nature of the job. I don’t make that much but I work as hard and as often as I can. 75-85 hours a week is not uncommon for me during half of the year. But once the season is over, I now have to find a new job every year from December to April? I have no control over the inability to do my job, but I feel that we are being punished because of freeloaders and lazy people. I personally don’t feel that is fair. Without unemployment I couldn’t survive in the winter. I am.registered at work one and career connect but neither have ever informed me.of a job opportunity in three.years and no one will hire me because the only.thing I’ve ever done is asphalt. I have no work experience and I can’t pay my bills on a McDonald’s paycheck. Just saying, not everyone who draws unemployment is lazy.
“I don’t make that much but I work as hard and as often as I can. 75-85 hours a week is not uncommon for me during half of the year.”
Anything over 40 hours per week is time and a half. Assuming you work the lower end of 75 hours per week for half a year, you are being paid the equivalent of 2,405 hours per year. There are 2,080 work hours in a year. In simple terms you are working the same number of hours as a worker who gets eleven paid holidays, two weeks vacation and 17% OT. You are working a full year so why should you get unemployment?
You then have an opportunity to work at another job. Most people work one job, 40 hours a week. However, you have chosen an occupation that works long hours for a half a year. To me unemployment compensation is paid for work when a person is unemployed due to unforseen reasons. Your work is cyclical.
For an unemployment insurance program to pay benefits to cyclical work, then the program needs to base its unemployment insurance premium rate based on history, payout and wages subjected to the tax and the benefit.
I hope you do not expect those who work in non cyclical occupations to subsidize you.
I appologize I should have specified. By half of the year, i meant haly of MY work season. Generally it works out to be 3 1/2 to 4 months. I work from April to late November. From June to august we see a surge in work and hours, assuming it doesnt rain and assuming the workload is there. Most of the rest of the year, im lucky to see 40 hours a week. so, my actual average work hours for last year, come to about 2000. That is not including such luxuries as paid vacations, holidays, or insurance for that matter, of which i recieve none. I made 20,030 last year gross, which is well below a non-cyclical, or normal job. So tell me then, how it benefits a business to hire an employee they know will only be there a short time? Whereas they could hire someone else who has no job to go back to? Someone that could actually benefit from the opportunity?Companies refrain from hiring seasonal workers because they know they wont last. If they wanted temps, they would use a temp service.
Also, there would not be enough jobs if all the construction workers in the state (minus union) had to have another job during the winter. there are 200 people in my company alone. Like i said, i have no skills other than what i do, and ive been doing it for 8 years. with the job market as it is, especially as competitive as the low level job market is, it is almost impossible for me. Im sorry that i am uneducated and have a menial job, but this life is what gives roads for you to drive on and places to park when you shop. I will turn in as many applications as you can aquire places for me to put them in my area come december, and i guarantee you i will not be hired at a job making at least $350 a week, if you like to show me how easy it is.
I did not come here to banter though, i only posted to try and shed another light on the subject. Apparently you feel like I WANT to be supported by people such as yourself, which is not the case. I was merely trying to demonstrate that not everyone who draws unemployment is lazy. And by forcing me into a second job, a hard working person, you further grant another one of those “lazy couch potatoes” another 4 months to sit and collect unepmloyment. And when i go back to work, they will still be sitting there… They are the ones that need these restirctions. Completely unemployed persons, not seasonal workers. I would not be upset if the situation were reversed.