Best Practices

Unemployment Tax Is High Enough, Don't Make it Worse

No one likes to fire an employee but sometimes they leave you with no other option. However, one of the risks of cutting someone from your team is they may file for unemployment benefits and if successful, your state unemployment tax rate could go up.

While not exhaustive, here are a few suggestions that may help you to be better prepared to contest and win restaurant unemployment claims of ex-employees:

1. Discharge sooner rather than later. Anyone can make a hiring mistake. If it becomes obvious that a new worker is not keeping their end of the employment bargain by not performing up to your standards, don't put it off. Failing to act in a timely manner may be interpreted as accepting the low level of performance.
2. Document, document, document. Keep 'written' records whenever an employee is warned or counseled about their behavior or job performance. Even verbal warnings need to be documented in writing and should include the basic facts surrounding the situation. If possible, have another manager observe counseling sessions. This could be important later if the worker gives a different version of the meeting in a restaurant unemployment claim hearing.
3. Try to obtain the worker's signature on a written warning. If they refuse, have another manager sign the notice as "Witnessed by (name) on (date)." Have the employee explain, in their handwriting, on the back of the document, why they chose not to sign. This will serve as proof they were notified of the problem.

The situation is often made worse by not solving problems quickly.
– Steven Redhead

4. Treat everyone the same. Failing to reprimand everyone fairly, even your best workers, for rule violations, can weaken your case. You must be able to show that your behavior and performance standards are consistently enforced. Never, ever play favorites. Everyone should be held accountable to the same standards, even your superstar bartender or server.

Your unemployment tax rates are already high enough. Don't risk having your payroll taxes go even higher by making it harder to justify legitimate employment terminations.

Visit RestaurantOwner.com for useful resources on how to effectively resolve difficult personnel issues:

How to Fire: A Fair & Effective Process to Resolve Difficult Personnel Issues: A comprehensive guide to handling the sensitive process of terminating an employee. It outlines a fair and structured approach that helps restaurant managers navigate difficult personnel issues effectively.

Employee Corrective Action Notice: A downloadable template for an Employee Corrective Action Notice, designed to help managers document performance issues and communicate expectations clearly.

Have a profitable week!

The RestaurantOwner.com Team