The major challenges and massive uncertainties for small and medium-sized businesses in 2020 will lead to major rate hikes in 2021 and beyond.
How can businesses navigate the complexities and reduce the impact of these coming increases?
When it comes to taxes and benefit rate increases due to layoffs, employers do have some choices to make around how they separate from employees and for how long. Furloughing, salary reductions, unpaid leave, and short term compensation with partial pay or benefits are all ways employers might be able to avoid unemployment applications that could drive up rates.
You will also want to check with your legal advisors to ensure there are no risks or adverse impact from your layoff choices—arising from EEOC or ADA guidelines— that could open you up to costly legal action.
Some companies may decide to restructure their organization by combining accounts or through upcoming merger and acquisition activities.
An even better risk management strategy is to work with a Outsourced HR Provider. Outsourced HR Providers aggregate multiple businesses together which can help you in several important ways:
· We can help to navigate the complexities of unemployment insurance, reviewing, tracking and following up on or appealing claims for you.
· We can move your employees to our entity that can bring your costs down immediately, as we bear the costs of unemployment insurance tax increases for 2021 and beyond.
· Working with us will also help mitigate and offset future rate increases in worker’s compensation.
· Working with Odyssey Partners will help to insulate your business against potential legal actions.
· We have the infrastructure to better answer employee concerns and manage cases, lifting that burden from your HR team.
And remember, whatever decisions you make to try to control the impact of rising rates must be done quickly. The trigger date will be the 1st of January, 2021, as the new year begins, so you should have these decisions in place before the end of the year.