When an employee finds themselves out of work, then under certain circumstances, they can collect unemployment benefits. The state disburses these funds to the individual on behalf of their previous employer. So who pays for this unemployment insurance? Do you need to purchase an unemployment insurance policy? As a small business owner, what do you need to do to cover your employees? In this article, we will seek to clear up a few things regarding unemployment insurance.
Who Pays for Unemployment Insurance?
The law requires business owners to pay for several types of benefits insurance. Two of those are Workers’ Compensation and Unemployment Insurance. The first, Workers’ Comp, is purchased by a business through private insurance. However, Unemployment Insurance is funded partially by the company and partially by the worker.
A portion of the payroll taxes paid by employers goes towards funding unemployment insurance. The rate is dependent on the number of claims, how long you have been doing business, and the wages earned by your employees.
Which Types of Benefit Insurance Do Companies Purchase?
Apart from Unemployment Insurance and Workers’ Compensation, many companies also supply additional benefits to their employees. In some cases workers pay the cost for these policies, and in others, the companies subsidize the cost.
- Individual Life Insurance
- Group Medical Insurance
- Disability Insurance
- Dental Insurance
Offering benefits to employees provides an incentive for people to stay with your company. You’re also helping your employees protect their health, their savings and everything they’ve worked so hard to achieve. As a bonus, offering benefits lowers your payroll taxes with each enrolled employee.
How Can You Find Out More About Benefits Insurance?
Commercial insurance coverage can be a bit overwhelming. Knowing which types of coverage you need to purchase and those you don’t, such as unemployment insurance, is something your insurance agent can help you with.
© Copyright 2020. All rights reserved. This content is strictly for informational purposes and although experts have prepared it, the reader should not substitute this information for professional insurance advice. If you have any questions, please consult your insurance professional before acting on any information presented. Read more.
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