A well-known manufacturer with a national brand switched to NSN after working with another unemployment service. This employer closes its plants two times each year for maintenance, and the employees are required to take their available vacation during these shutdown periods.
The first shutdown is in the summer, and traditionally only a few unemployment claims are filed. The second shutdown is in December. At this time most employees would routinely file for unemployment and each winter the employer paid out benefits for many unwarranted claims.
This employer has a stable workforce with many long-term employees who have vacation available to use during the winter shutdown. These employees should not be eligible for benefits. NSN recognized the ‘double dipping,’ and began protesting those claims which were not warranted during the winter shutdown. With NSN’s proactive involvement this employer’s tax rate was reduced by more than 2.5 percent resulting in tax savings of almost $500,000.
In subsequent years the number of unwarranted claims decreased significantly. Employees who are eligible for unemployment still do collect benefits at both shut-downs.
Significant tax savings after NSN analyzed company reorganization
Consider the case of a large national manufacturing company that split into six new companies. The state assumed a successor relationship and assigned the maximum rate to one of the six new entities for their unemployment taxes.
NSN’s analysis revealed that there was no true predecessor or successor relationship as defined by the state. Therefore the state’s assigned rate for that company was not valid. NSN protested the new rate assigned to that company.
As a result of NSN’s efforts, the state realized that the company was actually a new employer, and that the new employer rate was the correct basis for establishing the unemployment tax rate. The client saved $508,340 on its unemployment taxes in the first year, and it saved $823,699 over three years.