StudentShare solutions
Triangle menu
  • Home
  • Subjects
  • Miscellaneous
  • The Burden of the Current Unemployment Insurance Program on Small Businesses and Possible Alternatives

The Burden of the Current Unemployment Insurance Program on Small Businesses and Possible Alternatives - Essay Example

Nobody downloaded yet

Extract of sample
The Burden of the Current Unemployment Insurance Program on Small Businesses and Possible Alternatives

Instead, they want to pay more for the employees' salaries and wage protection. The business cost rising from the payment of tax towards unemployment compensation will have to recoup by the business firm through its business and actually the consumers bear the tax burden of the firm. The tax rate of unemployment insurance is based on the stability in working of the firms. A company with stable employment history will get deduction in tax rate. An employer is held liable for paying towards unemployment insurance in case he has quarterly payroll of $1500 or more in a calendar year.
"The tax rate for new employers is .0270 (2.7 percent). The first $7,000 in wages paid to each employee during a calendar year is taxable. Any amount over $7,000 for the year is excess wages and is not subject to tax. Excess wages can never be greater than gross wages."1
According to the Federal Unemployment Tax Act establishment and administration of the Unemployment Compensation Program is carried on mutually by the state and federal governments. Thus there exist dual system of state and federal in the tax program and the, payments of the employer towards payroll taxes is levied by both the state and federal governments. The rate of payment towards unemployment taxes by employees is on the basis of established tax rates and the history of employers work stability. Thus employers having a history of greater unemployed workers would have to pay more towards the unemployment compensation tax. In case the business owner is compelled to lay off his business for military service, the resulted unemployment to workers would lead to count as a higher unemployment rate in the firm and thus the tax rate payable by the employer will be higher. Similarly if the employees took leave from their jobs for military service then also firms work history will be shown as higher unemployment rate and thus also the tax rate will be increased.
In case workers who refrain from job for joining with their transferred military spouse have the legal right to receive unemployment compensation. Thus the employer wants to pay for their non working employees even though job is exist there. In some states the employers are not chargeable for the workers' leave for military service and thus it does not taken for calculating its tax rate. However the workers have the right to receive unemployment compensation and this is charged from the unemployment compensation fund of the state. Thus the actual cost of workers compensation is paid by the employer as a socialized cost and this will lead to increase the overall state unemployment tax rate. 2
Complicated tax regulations is causing firms to indulge in unnecessary law suits with high cost and this will always prevent establishing new business. Along with this higher rate of workers compensation and unemployment insurance has lead to increasing the labor cost of firms. In Florida there employ tort reform for reducing the burden of employers. Joint and several liability rate reductions are followed in workers unemployment compensation insurance.
Small businesses are seriously affected by the workers compensation insurance. Majority of the burden of the rising tax rate is always comes to small businesses. Due to shortfalls in state regulation relating to compensation insurance the small business are required to bear a major portion of the UC fund. The working cost such as regulatory costs and tax payments are always becoming ...Show more


Florida unemployment compensation law provides wage protection (partial and temporary income) to the jobless workers. For the creation of unemployment insurance fund, the employers are held liable to pay. This is done by way of tax towards Florida revenue department…
Author : trishatorp
The Burden of the Current Unemployment Insurance Program on Small Businesses and Possible Alternatives essay example
Read Text Preview
Save Your Time for More Important Things
Let us write or edit the essay on your topic
"The Burden of the Current Unemployment Insurance Program on Small Businesses and Possible Alternatives"
with a personal 20% discount.
Grab the best paper

Check these samples - they also fit your topic

Marketing research insurance program
There are a number of insurance plans and policies for retired people but not many with embedded future engagements. There are a number of people under NTUC insurance and with an innovative initiative of insuring the life of people along with engaging them in certain acts.
5 pages (1250 words) Essay
Small Businesses
This paper addresses the importance of small scale businesses in contemporary market contexts and explains whether it would be worthwhile to set up a new small scale business. The major opportunities, problems and challenges that a business man may face in setting up a small business will be detailed and the ways to overcome the issues will be highlighted in the paper.
13 pages (3250 words) Essay
Small Businesses are Entrepreneurship
Without any doubts, entrepreneurs and small businesses play an important role in strengthening the economy of any country. They create jobs, contribute significantly to the GDP, induce investment, and spur consumer spending. However, this paper will not explore these above-mentioned aspects but it is an attempt to explore the proposition that “small businesses are indeed examples of entrepreneurship”.
8 pages (2000 words) Essay
State Childrens Health Insurance Program
The S-CHIP (State Children’s Health Insurance Program) is a US based program that is undertaken through the assistance of department of health and human services. Having been established by the balanced budget act of 1997, the program is aimed at providing health cover to children who are unable to afford Medicaid.
5 pages (1250 words) Essay
How globalization affect small businesses
A small business is a business that is privately owned and has a small number of employees. Globally, globalization ahs affected the operation of many small businesses as they have made the m to change their operations and venture into markets (Go?gl, Hans-Joachim & Clemens 67).
5 pages (1250 words) Essay
What characteristics define small businesses
Sources of funding are classified as either debt or equity. Utilisation of these primary funding sources depends upon the amount of capital required, nature of proposed investment and other terms that materially
7 pages (1750 words) Essay
Effects of employment insurance on unemployment (Canada)
which provides a maximum of 53 weeks period of income benefits to Canadian citizens who are unemployed. The application for Employment Insurance is renewable depending on each individual’s progress on job applications. The main objective of
4 pages (1000 words) Essay
New business venture, small businesses
ll business environment that helps them to reach and penetrate the market but despite their crucial significance, they have often not been made the headlines despite carrying significant risk and considerable number of failures. (Osborn, 1951). Small businesses are largely run
10 pages (2500 words) Essay
How Globalization Affects small businesses
Example: To introduce a topic to the reader on globalization and its effects on small businesses, the issue can be posed as a question in this form, “Is
2 pages (500 words) Essay
Should government invest in small businesses
Small businesses play an important role in the development of United Kingdom’s economy. About 52 percent of the United Kingdom’s GDP has been directly contributed by small businesses. It also contributes in generation of 58 percent private sector workforce. Small businesses lead to entrepreneurship as well as new innovations.
3 pages (750 words) Essay
Hire a pro to write
a paper under your requirements!
Win a special DISCOUNT!
Put in your e-mail and click the button with your lucky finger
Your email
Comments (0)
Click to create a comment
Contact Us