Accepting Unemployment insurance compensation

[DavidOdden]

My employer is, by default, obligated to pay me after he fires me, if I don't find work.

Where does this obligation come from? It is certainly not part of any employment contract, since it is not a condition that the employer voluntarily agreed to, and if a person does not voluntarily agree to a condition, it is not part of an agreement (thus not part of a contract). In fact, it's clear that the law does not view unemployment payments as a contractual obligation imposed on the employer. A simple way to test this is to try to sue an employer who does not pay you the amount you claim you are owed. The case will be thrown out summarily, because you don't have even a hint of a contractual right to post-firing compensation.

It strikes me that there is a very important underlying principle at stake here, where it would be too easy to make the wrong identification of principle based on the scholarship / taxation relationship that Rand identified. Let me name the wrong principle: "If the government makes it legally possible to initiate force / contribute to the initiation of force, then it is morally acceptable to take advantage of such government permission, as long as you oppose the program". Were that indeed a moral principle, then we could conclude that if there were a government program requiring an employer to preferentially hire females, Hispanics or the mentally disabled over the most qualified candidate (in the employer's judgment), it is moral to file a legal procedure with the government to force an employer to hire you as a retarded Hispanic woman. An employer knows that there is this law, but we cannot conclude that he agrees that this is a proper law, and he would not comply with such a term were it not for the fact that the government will use force to get him to comply. Furthermore, the government will not use such force unless you as a supposedly "aggrieved" individual initiate the legal process of using force to gain what you want and cannot obtain through voluntary means.

The situation that Rand identifies in the scholarship essay pertains to a person recovering the money taken from all people by governmental force, sua sponte. As victim and potential recipient of government money, you have no choice as too whether force will be initiated. Your receipt of a scholarship does not count or directly cause as a tax obligation on some other person. With unemployment payments, on the other hand you have the right to not pursue such payments, which you know will in fact be funded by the employer if and only if you file for payments.

If I did have the right to avoid this law, by contract, I would. But since I don't, allowing myself to be penalized by it while I'm employed, but not benefiting while I'm not, would be wrong.

Since unemployment payments are not part of a contract between you and an employer and since you are not "penalized" while employed, this argument falls apart. (Since you live in a much more communist country, perhaps this is a valid argument for the UK, so YMMV).

[smyjpmu]

Okay, so a thief robs you of $1000. That thief later offers you $100 back, but tells you that if you take the money, he will rob your employer of $100.

Do you accept the $100?

[flatlander]

Okay, so a thief robs you of $1000. That thief later offers you $100 back, but tells you that if you take the money, he will rob your employer of $100.

Do you accept the $100?

But I think that in this case, the thief is more likely to say that he will continue to rob your employer of $100 on a regular basis, unless your employer begins to make too much money in which case he will steal $450. You take back your $100 as partial restitution.

The thief is still a thief, and you are not guilty for his actions, in spite of the fact that he gave you the illusion of choice.

[~Sophia~]

Unemployment is not generic taxation, it is directly caused by your former employees filing claims, and by filing a claim, you are directly causing the government to take money from an employer which it would not otherwise take.

How does it work?

I always thought (mistakenly it seems) that in US employers must pay employment insurance regardless of claims.

[Andrew Grathwohl]

I don't claim a right to post-termination compensation per se; I claim a right to compensation for the wealth taken from me by government by any legal means possible.

But, in this context, legal ≠ moral.

I think David is spot-on here. Unemployment compensation is taken from your previous employer if - and only if - you file a valid unemployment claim. Therefore, you - and only you - are able to prevent the government from looting that employer. You file the claim; you initiate the force.

[DavidOdden]

How does it work?

You should get the testimony of an employer who has to pay for details, but basically the employer's payroll is taxed at a certain rate (the state will tell you), which is a function of the number of claims filed by your former employees.

It is probably true that you cannot reduce your tax to zero if there are no claims for decades, if for no other reason than the fact that the state will still be monitoring your actions and those tax revenues also go to maintaining the bureaucracy. Claims then increase the rate of government theft.

[smyjpmu]

How does it work?

I always thought (mistakenly it seems) that in US employers must pay employment insurance regardless of claims.

Here in Florida there's a minimum rate (currently 0.0036 or 0.36%), a maximum rate (currently 0.0540 or 5.4%) and an initial rate (currently 0.0270 or 2.7%). After 10 quarters your rate is determined (between the minimum and maximum) by a formula which takes into account how much has been paid out in claims to employees you've laid off. I think the idea is that between the min and the max you wind up paying back what was paid out in claims, but I'm not sure of the exact details of the formula.

Federally, there's a flat minimum rate, unless you're in a certain state whose unemployment fund was insolvent, which is 0.0080 or 0.8%.

In both cases the rate is only charged on the first $7000 of annual wages per employee.

Personally, my employer is most likely at the 5.4% rate, so making a claim would actually not cause their rate to go up (it would instead, in aggregate with everyone else's claims, cause the minimum rate to go up). Not that I think that makes a difference from a moral perspective. I am not the one imposing the unemployment tax, the State of Florida is.

Edited May 27, 2010 by smyjpmu

[SapereAude]

Here's how it works for me.

I have never had a claim filed against my business.

I pay 3.4% of total gross wages to unemployment.

If you go 10 quarters without having any payments go out to claims the rate goes down.

If any claims are made the rate goes up.

In the US employees do not pay anything in (unlike say, social security)

So, when you file you are directly responsible for more money being stolen from me.

[smyjpmu]

In the US employees do not pay anything in (unlike say, social security)

Depends on the state. New Jersey and California at least have state unemployment insurance contributions taken out of employee paychecks.

Unemployment programs are run by the individual states. In addition, the federal government has a fund which the states can access if their state unemployment trust fund goes bust. This happened to New York back in the early 2000s (dot com bust and 9/11 being the major factors), and New York businesses paid a higher federal unemployment rate for the next few years as a result. The federal program is a flat rate for every business in a state. Google "Form 940" if you want to see how it's calculated.

Edited May 27, 2010 by smyjpmu

[softwareNerd]

In the US employees do not pay anything in (unlike say, social security)

Depends on the state. New Jersey and California at least have state unemployment insurance contributions taken out of employee paychecks.

Both methods amount to the same thing. It is part of the cost of employing a person. For instance, in the long run, the customer is the one who pays. A real (still bad) alternative system would be to take a payroll tax that varied with the individual's job history, and which would raise the individual's rate after a claim.

In addition to the rates varying by employer's past history (claims filed by people who were employed by the employer compared to the total amount the employer is paying in), in some states it also varies from year to year based on how much total money has been paid in and given out across the state (i.e. the size of the "fund" balance).

Essentially, the system is an attempt mimic the way private unemployment insurance if purchased by an employer, (by varying the rate based on the employer's history and the state-wide history), except that employers are being forced to "buy" this insurance. That, of course, changes everything.

[smyjpmu]

Unemployment compensation is taken from your previous employer if - and only if - you file a valid unemployment claim. Therefore, you - and only you - are able to prevent the government from looting that employer. You file the claim; you initiate the force.

Ignoring the fact that this is not exactly accurate, I still don't agree with that analysis. There is an intervening cause between your filing of the claim and the government collection of unemployment taxes.

Do you deny that there is an intervening cause, or do you claim that an intervening cause does not relieve one of responsibility?