6 ms·

I've gone through a number of these company bust-ups. The first one was fairly traumatic for a lot of people, but I'd only been there 3 months. 2001, In my inte

by malbs 13y ago

I've gone through a number of these company bust-ups. The first one was fairly traumatic for a lot of people, but I'd only been there 3 months. 2001, In my interview, when I was asked "Is there anything you'd like to ask us" I said, "look this is awkward, but I've seen the company mentioned on fuckedcompany.com a number of times, and it's all bad news, is there any concern?" and I received the answer "Oh that's our American parent company, we'll be unaffected". 3 months later, gone gone gone. I watched people who'd worked there/started the company get turfed out, and crying. I had barely been in the office (working offsite) so I didn't even really feel any attachment at all, so it was all quite surreal. Next job I worked for a small company where the two directors ended up being unable to pay staff, so they put everything on their credit cards, and convinced everyone to resign and sign up as contractors. It was only years later that it dawned on me, that by resigning they didn't have to pay severance packages. We were young and trusting.

lotsofpulp 13y ago
As far as I know, in the US, there is no legal mandate to pay severance. However, getting their employees to resign probably saved them a lot of money on their unemployment insurance by making the employees ineligible for unemployment benefits (that's why I try to get my employees to resign) and/or they may have gotten their employees to sign release forms for liability from wrongful termination or discrimination or those kinds of liabilities.
- gknoy 13y ago
  > making the employees ineligible for unemployment benefits (that's why I try to get my employees to resign) Am I the only one that finds this utterly and totally horrific? Why would you do that? What do you gain by someone who leaves being unable to collect unemployment benefits? Does it directly affect you? I thought that was something that all taxpayers put money into. It reads like "I take pleasure in ensuring that ex-employees are totally screwed" -- please tell me I'm wrong.
  - crdoconnor 13y ago
    I guess he has to pay for those benefits on the payroll tax, although it is horrific, no doubt about it.
  - jcater 13y ago
    Unemployment insurance doesn't work like you think it does, at least in the states I've run companies in. He could be 100% liable for unemployment benefits made against his company in the form of increased benefit charges. Here's a quote from Georgia's handbook: "Experience rating is a system which relates employer taxes to the cost of providing unemployment benefits to its employees. Lower rates are earned by employers whose unemployment experience costs are less, and higher rates are assigned to employers whose experience indicates greater costs. "Under experience rating, benefits paid are charged to the claimant's separating/most recent employer, provided the employer has paid wages of at least 10 times the claimant's weekly benefit amount and the separation was under allowable conditions as defined by the Employment Security Law. The employer most directly related to the claimant's unemployment will be charged for benefits paid and thus reflect a true experience rating. This system helps to maintain an adequate reserve fund from which future benefit payments will be made. "No employer's account will be charged more than the amount of wages that employer paid the claimant and the employer will pay only for the period of unemployment attributable to the separation from his employ." Employers directly pay for state unemployment benefits; it does not come from the public tax pool.
  - lotsofpulp 13y ago
    If I am getting rid of someone, it's usually for cause. However, if I terminate someone, then they can file for benefits, then I have to fight to say that the employee was fired for cause, prove my case, yada yada yada. It's much more time efficient for me if the employee just resigns, as all I have to show is the resignation letter. Unemployment insurance is paid for by employers, and the more former employees that collect unemployment, the higher the employer's unemployment insurance premiums. I save a ton of money by making sure my former employees do not get unemployment benefits. This is also why a resignation is important, in that it gives me assurance my premiums won't rise. I haven't had to let anyone go simply because I didn't have enough work for them, so I can't say I've screwed anyone out of unemployment benefits. I'm just making sure my costs stay down when I do need to get rid of someone. However, this is also why companies may offer severance. They can either pay increased unemployment insurance premiums to the government, or they can win goodwill from employees by giving them some cash and also releasing the employer from some additional liabilities.
greenyoda 13y ago
"I said, "look this is awkward, but I've seen the company mentioned on fuckedcompany.com a number of times, and it's all bad news, is there any concern?"" Ah, fuckedcompany.com! I miss that site. It really offered some good insights into what was happening during the internet bubble. For those who missed it (it went away in 2007), here's a description: https://en.wikipedia.org/wiki/Fucked_Company https://en.wikipedia.org/wiki/Fucked_Company And here's a random snapshot from 2001: http://web.archive.org/web/20011201061308/http://fuckedcompany.com http://web.archive.org/web/20011201061308/http://fuckedcompa...
- malbs 13y ago
  fuckedcompany was an important resource at the time - I should have paid more attention to the commentary!
vacri 13y ago
I had barely been in the office (working offsite) so I didn't even really feel any attachment at all, so it was all quite surreal. Starbucks came to Australia... and failed hard. In the news following the closure of three-quarters of its stores, they interviewed one young man who was absolutely distraught, devastated at the loss of his 'family'. He was 18, and had worked there for a whole three months. Welcome to the world, lad.

by malbs 13y ago

lotsofpulp 13y ago

As far as I know, in the US, there is no legal mandate to pay severance. However, getting their employees to resign probably saved them a lot of money on their unemployment insurance by making the employees ineligible for unemployment benefits (that's why I try to get my employees to resign) and/or they may have gotten their employees to sign release forms for liability from wrongful termination or discrimination or those kinds of liabilities.

gknoy 13y ago
> making the employees ineligible for unemployment benefits (that's why I try to get my employees to resign) Am I the only one that finds this utterly and totally horrific? Why would you do that? What do you gain by someone who leaves being unable to collect unemployment benefits? Does it directly affect you? I thought that was something that all taxpayers put money into. It reads like "I take pleasure in ensuring that ex-employees are totally screwed" -- please tell me I'm wrong.
- crdoconnor 13y ago
  I guess he has to pay for those benefits on the payroll tax, although it is horrific, no doubt about it.
- jcater 13y ago
  Unemployment insurance doesn't work like you think it does, at least in the states I've run companies in. He could be 100% liable for unemployment benefits made against his company in the form of increased benefit charges. Here's a quote from Georgia's handbook: "Experience rating is a system which relates employer taxes to the cost of providing unemployment benefits to its employees. Lower rates are earned by employers whose unemployment experience costs are less, and higher rates are assigned to employers whose experience indicates greater costs. "Under experience rating, benefits paid are charged to the claimant's separating/most recent employer, provided the employer has paid wages of at least 10 times the claimant's weekly benefit amount and the separation was under allowable conditions as defined by the Employment Security Law. The employer most directly related to the claimant's unemployment will be charged for benefits paid and thus reflect a true experience rating. This system helps to maintain an adequate reserve fund from which future benefit payments will be made. "No employer's account will be charged more than the amount of wages that employer paid the claimant and the employer will pay only for the period of unemployment attributable to the separation from his employ." Employers directly pay for state unemployment benefits; it does not come from the public tax pool.
- lotsofpulp 13y ago
  If I am getting rid of someone, it's usually for cause. However, if I terminate someone, then they can file for benefits, then I have to fight to say that the employee was fired for cause, prove my case, yada yada yada. It's much more time efficient for me if the employee just resigns, as all I have to show is the resignation letter. Unemployment insurance is paid for by employers, and the more former employees that collect unemployment, the higher the employer's unemployment insurance premiums. I save a ton of money by making sure my former employees do not get unemployment benefits. This is also why a resignation is important, in that it gives me assurance my premiums won't rise. I haven't had to let anyone go simply because I didn't have enough work for them, so I can't say I've screwed anyone out of unemployment benefits. I'm just making sure my costs stay down when I do need to get rid of someone. However, this is also why companies may offer severance. They can either pay increased unemployment insurance premiums to the government, or they can win goodwill from employees by giving them some cash and also releasing the employer from some additional liabilities.

greenyoda 13y ago

"I said, "look this is awkward, but I've seen the company mentioned on fuckedcompany.com a number of times, and it's all bad news, is there any concern?"" Ah, fuckedcompany.com! I miss that site. It really offered some good insights into what was happening during the internet bubble. For those who missed it (it went away in 2007), here's a description: https://en.wikipedia.org/wiki/Fucked_Company https://en.wikipedia.org/wiki/Fucked_Company And here's a random snapshot from 2001: http://web.archive.org/web/20011201061308/http://fuckedcompany.com http://web.archive.org/web/20011201061308/http://fuckedcompa...

malbs 13y ago
fuckedcompany was an important resource at the time - I should have paid more attention to the commentary!

vacri 13y ago

I had barely been in the office (working offsite) so I didn't even really feel any attachment at all, so it was all quite surreal. Starbucks came to Australia... and failed hard. In the news following the closure of three-quarters of its stores, they interviewed one young man who was absolutely distraught, devastated at the loss of his 'family'. He was 18, and had worked there for a whole three months. Welcome to the world, lad.