08/08/2007
CONTACT: Melissa Sharp, 202-554-9000
WASHINGTON, D.C.--American small-business owners, challenged to locate workers during today's tight labor market, are emphasizing employee retention. According to a National Federation of Independent Business Small-Business Poll released today on unemployment compensation, nearly half of all small businesses, 49 percent, experienced no employee turnover during the past 12 months.
Quitting a job is the most frequent reason employees leave a small business, the study determined, yet 59 percent of small employers had no workers voluntarily depart during the same period. Another 13 percent experienced only one willing departure. Over those months, nearly three-fourths, 73 percent, of the small firms fired no one, and 87 percent were not forced to lay anyone off for economic reasons.
Among those who did fire one or more workers, 22 percent did so in response to unsafe work practices; 2 percent took the action to deal with some form of harassment.
Twenty-two percent of all small firms – 41 percent of those that had an employee leave for any reason – were the object of unemployment claims. But owners of small firms are no shrinking violets when it comes to challenging unemployment claims they think are unjustified: 53 percent said they did not think the last claim filed against them was justified, and 51 percent took formal action to oppose the claim.
More than three-fourths, 78 percent, presented their challenges in writing and about one in 10 took the effort to appear, or send a designate, to the hearing. Five percent brought in lawyers to represent them.
Slightly more than half said they challenged an unemployment claim when a worker was fired for cause. The second most common reason for bringing a challenge, 36 percent noted, was that an employee voluntarily quit. Seven in 10 made no challenge to claims they felt were justified.
Small-business owners are woefully uninformed about the Federal Unemployment Tax Act payments they are required to make, according to the poll. Two-thirds could not or would not estimate the amount of FUTA taxes they pay per employee each year, and about half admitted that they had no general idea about how those levies were calculated.
They do, however, take action that either directly or indirectly minimizes their experience-based FUTA payments. For example, 59 percent of small employers annually verified their unemployment compensation accounts to ensure accuracy; 36 percent got resignation letters from workers who left voluntarily; 59 percent examined each claim whether challenged or not, and 67 percent kept records of events or circumstances concerning employee termination.
"Typically, larger small firms have explicitly written employment policies that are available to employees, but in smaller businesses the employer is usually available to answer questions,” said William J. Dennis, NFIB's senior research fellow.
Still, more than half, 56 percent, have one or more policies in writing.
"This is highly related to the number of employees working for a small business: 94 percent employing 20 or more workers have a written policy, while less than half of those that have nine or fewer workers do," Dennis said.
Trade-union representation in small businesses is minimal; just 3 percent have any unionized employees. And while it does not appear that a concerted effort to unionize such employees is currently underway, it should be noted that organized labor is seeking to change the basic certification rules that could, if enacted, have a significant impact on the nation's small firms.
The study concluded that while small employers do hold the idea that their actions matter in unemployment compensation outcomes and take some steps to reduce their liability, they could benefit by broader and more frequent action.
To access the complete poll please visit www.nfib.com/page/researchFoundation.
