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What is unemployment insurance? Is an organization required to pay unemployment benefits to all dismissed employees?...

What is unemployment insurance? Is an organization required to pay unemployment benefits to all dismissed employees? Explain how you would go about minimizing your organization’s unemployment insurance tax. Refer to chapter 13 pages 416-448 Question on page 442. Managerial Economics 3rd Edition, Gary Dessler.

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Answer #1

Unemployment insurance pays a sum of money to the unemployed person if that person is unable to find work for no fault of his. The laws do not require that all dismissed personnel or employees who have been terminated on valid disciplinary grounds be provided with unemployment benefits.

In order to reduce the unemployment tax liability of an organization, the manager should keep a record of all the notices that have been served by him to the employees regarding warnings on performance and discipline. This would help the organization in establishing that proper opportunity was provided to the employee to improve his behavior and then a checklist can be used to prove that the dismissal was a result of the employee’s own lackluster behavior.

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