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Of all the things that can happen in a workplace, violence is the most destructive and worrisome. Even incidents that don’t result in serious physical harm indicate a major problem with staff behavior and organizational culture. And the impact on morale, productivity, and retention and hiring can be severe and lasting. For all these reasons and more, employers must proactively address workplace violence prevention in ways both subtle and direct.

Recognizing the financial impact

To be sure, the biggest danger associated with workplace violence is its potential to inflict physical harm and mental health repercussions on employees, customers and anyone else affected by incidents.

But there’s typically a negative financial impact on employers as well. Following incidents of violence, employers usually incur high legal costs and often need to invest more heavily in security. Workplace violence also can lead to reduced productivity, elevated turnover, higher health care costs, and inflated workers’ compensation and disability insurance premiums.

Identifying every possibility 

As you’re no doubt aware, the federal Occupational Safety and Health Act requires employers to provide a workplace free from hazards that could cause harm or death — including violence. Some states and localities have related laws.

Thus, your organization’s leadership needs to continuously look for and identify threats most likely to affect your workplace. Remember that perpetrators aren’t always current employees. Violence might be committed by others who have a current or past relationship with your company — for example, contractors, customers or former employees. Or it may occur in conjunction with another criminal act, such as theft or vandalism.

Violent behavior can also be directed toward one of your workers by someone unassociated with your organization but whom they know, such as an angry spouse, or a current or former romantic partner.

Fortifying your defenses

Among the best ways to manage the risk of workplace violence is to regularly conduct threat assessments. If your organization lacks the resources to do this, consider engaging a qualified security consultant. The right consultant can complete a comprehensive, formal threat assessment, as well as work with you to identify and undertake specific steps to minimize situations that typically lead to violence.

For instance, you might need to upgrade physical security systems. This may include installing locks and fences, deploying guards, and implementing ID badges to stop those looking to inflict harm from gaining access. In addition, if you haven’t already, you could install web-based cameras and let everyone on premises know that their actions won’t go unobserved or unrecorded.

Whether or not you work with a security consultant, you should implement a workplace violence prevention policy that includes employee training and ways to report toxic behavior and potentially violent situations. The policy should prohibit weapons in the workplace and clarify that you reserve the right to search workspaces, lockers and other areas.

Just as important are hiring processes that better ensure a nonhostile work environment. Start by screening job candidates and running background checks to identify those with histories of violence and other criminal activity. (Work with your attorney to ensure background checks and employment verifications comply with applicable laws.)

Finally, explore fringe benefits that can help lower the likelihood that stress, conflicts and outside pressures drive employees to commit violence. Many employers are investing more heavily in well-being benefits such as Employee Assistance Programs, flexible paid time off policies, and training related to mental health and financial literacy.

Staying vigilant

Workplace violence is a worst-case scenario for employers. By staying vigilant, you can address high-risk situations more readily. Contact us for help identifying and managing all the costs associated with maintaining a safe working environment.

© 2024
TopLine Content Marketing Team

It’s been a running joke for years that employees often look at their pay stubs and wonder, “What the heck is FUTA?” If your organization has been up and running for a while, you’re no doubt familiar with this payroll tax obligation — so familiar that you may not expend much thought on what it is or why it exists.

But whether in the context of explaining FUTA to curious staff members or managing your organization’s liability, it’s important to keep certain fundamental facts in mind.

Funding mechanism

First things first, FUTA stands for the Federal Unemployment Tax Act. Under this law, the FUTA tax was created to fund a program that helps individual states pay unemployment benefits for eligible individuals who have been terminated from their jobs without “just cause” — but not those who have voluntarily quit.

On the federal level, the program funds benefits to employees who have been terminated or laid off through no fault of their own, including because of illness or disability. Currently, benefits may be paid out for up to 26 weeks or until former employees find new jobs or become self-sufficient. Traditionally, extensions have been allowed under special circumstances, such as during the pandemic.

Employers that pay wages of $1,500 or more in any calendar quarter of the preceding or current tax year must pay FUTA annually. While FUTA is administered and collected by the IRS, state unemployment tax is a separate obligation paid to the applicable state authority.

Each state operates under its own unemployment tax laws to determine the amounts that should go toward state unemployment insurance. Eligibility for unemployment benefits also generally differs by state. Thus, along with managing their FUTA obligations, employers need to keep tabs on their respective state unemployment tax rules.

Claiming the credit

FUTA tax rates and thresholds have remained the same for decades. In 2024, FUTA is applied at a 6% rate to the first $7,000 of wages an employee earns. Therefore, the maximum tax is $420 per employee (6% of $7,000). If, for example, an organization employs 50 workers, the FUTA tax would max out at $21,000 (50 × $420).

However, perhaps the most important FUTA fundamental of all is most employers qualify for a credit of up to 5.4% — so long as they pay into their state unemployment insurance fund. In other words, the effective tax rate for employers in most states is only 0.6%. This can make a substantial difference in the amount of FUTA owed.

Returning to the previous example, if an employer has 50 employees earning $7,000 or more for the year, the beginning FUTA tax liability is $21,000. But assuming the 5.4% credit is available, the employer’s rate is reduced to 0.6% or $42 per worker. In this case, the employer’s total FUTA liability is only $2,100 (50 × $42), or $18,900 less ($21,000 – $2,100) than it would owe without the credit.

Note: States are allowed to take federal Unemployment Trust Fund loans from the federal government if they lack funds to pay unemployment benefits. If your state fails to repay a federal unemployment loan within two years, your organization’s credit is reduced by 0.3% each year until the state’s loan is repaid. Therefore, employers in “credit reduction” states must pay more FUTA. According to the U.S. Department of Labor, as of January 1, 2024, California, Connecticut and New York were subject to credit reduction.

Addressing your challenges

Once you’ve explained FUTA to an employee, a common follow-up question is, “OK, now what’s FICA?” But that’s a subject for another article. We can help you develop strategies to address your organization’s distinctive payroll tax challenges.

© 2024
TopLine Content Marketing Team