Rhode Island is trying to figure out how to best handle it’s unemployment tax. Many companies will hire an employee and lay them off for a season when their business is slower. They will then rehire them after a period of time once business picks up again and there is a need for more workers. Rhode Island’s unemployment tax is the highest in the nation, as well, which is what is causing much of this new questioning.
“They point to a pattern that suggests some businesses, despite the high costs, are finding the tax to be a real bargain. These businesses lay off on a regular basis, which raises their tax bills. But even with the extra money they pay in, the return on investment is bigger. That is, their contributions fall short of what the fund pays out to their laid-off employees.” (Providence Journal)
What is your take on this new policy? Do you think it will help businesses?