How Much Will Layoffs Cost You?
Strategic direction, market forces, and merger and acquisition activity all drive often difficult decisions to transition a workforce to a more competitive business model. With today's hyper-competitive business climate these changes are not only commonplace but necessary.
Thinking Outside the Severance Box
The concept of severance pay has remained the same for over one hundred years. What more companies are discovering however, is that by tying the receipt of severance pay to state unemployment insurance benefits, that same severance pay can put an additional 7.65% in their pocket, while costing the company 7.65% less. In addition, you can incentivize finding re-employment and further reduce severance costs. Supplemental Unemployment Benefit ("SUB-Pay") Plans are a proven approach that TMS has successfully deployed and administrated for decades.
Have you also thought about?
- SUB-Pay Plans can save companies 7.65% - 45% over traditional severance plans
- SUB-Pay Plans allow the cost of severance to be rolled in to the total layoff expense
- SUB-Pay Plans promote better outcomes for employers and employees
- SUB-Pay Plans are exempt from Social Security, Medicare, FUTA, and SUTA Taxes
- SUB-Pay Plans are a standard part of existing IRS codes and Revenue Rulings and were originally conceived by the Department of Labor, the Treasury Department and private sector employers
- Integrating severance pay with state unemployment insurance benefits significantly reduces restructuring expenses
- Employees can still receive their pre-layoff wage plus a FICA tax gain of 7.65%
- Savings generated can be used to provide greater benefits, extend benefits, and reduce size or need of future layoffs
- Incentivizing the search for full-time employment and providing dedicated resources encourages better outcomes
Key Facts to Consider When Planning for Layoffs
- Save 45%+ over traditional severance programs – just by better understanding the options available to your company
- Give 7.65%+ back to employees transitioning to new employment – at no cost to the employer
- Since the 1950s SUB-Pay Plans have helped many businesses and hundreds of thousands of employees