Employers Should Review Wages to Rival Unemployment Benefits

June 22, 2010 - PRLog -- EATONTOWN, NJ – With unemployment hovering around the 10% mark, employers instinctively think it should be easy to find quality candidates to hire. Additionally, hiring managers believe they can offer lower pay because so many people are competing for positions. Snelling Staffing – The Wyckoff Group (TWG) is reporting the opposite effect is taking place: many displaced workers are receiving better compensation through Unemployment Benefits and are choosing to remain unemployed as a result.

“I’m not exaggerating when I say that 50% of the people I offer opportunities to choose unemployment,” expresses Heather Araneo, a Branch Manager for Snelling Staffing – TWG who interviews and places candidates in available positions every day. “Between unemployment benefits and the long length until their expiration, a lot of people profit more by refusing work.”

According to Congressional Law and the New Jersey Department of Labor and Workforce Development, individuals can now receive unemployment benefits for 99 weeks (almost two years), as well as extra money for dependents and partial funds for COBRA benefits. Additionally, workers with children save money on childcare because they’re unemployed and can watch their children themselves.

Consider the following scenario: a woman with two young children, earning $40,000 annually is laid off. She has elected to COBRA her health benefits (an estimated standard family plan of $1300 / month). Using an average of 4.3 weeks / month:

•   If our candidate remains unemployed, her Weekly Benefit Rate (WBR) is 60% of her salary before termination plus 7% for her first dependent and 4% for her second dependent of her WBR: $2,203 / month for herself and two children. The government pays 65% of her COBRA reducing her monthly payment to $455. Her total net monthly income is $1748.
•   If our candidate returns to work as a temporary employee receiving $19.23 / hour (equivalent to her $40,000 annual salary) and works 40 hours / week, she is paid $3308 for the month. She must now pay 100% of her COBRA costing her $1300. Added to the estimated cost of childcare of $860 / month, her net monthly income is $1148.

Therefore, if our candidate decides to leave her unemployment benefits to go back to work, she would actually earn $600 less every month. The results make many people question why they would return to employment in order to make less.

“Hiring all-star employees is important for businesses during a recovering economy,” says Araneo. “If employers want quality candidates during this crucial time period, they should review the wages they’re offering.”

Local businesses use Snelling Staffing to contract qualified people in a diverse range of positions, including Administrative, Clerical, Light Industrial, Accounting & Finance, Legal and Biopharmaceutical work. Businesses from almost every industry use Snelling to find talented and qualified employees for both temporary and career positions. The Wyckoff Group consists of New Jersey offices in Eatontown, East Brunswick, Freehold and Lakewood as well as King of Prussia, Pennsylvania, Brunswick, Georgia and Ft. Lauderdale, Florida.

For more information about Snelling Staffing - TWG, please visit www.snellingnj.com or call 732.389.0300.

About Snelling Staffing Services

Snelling Staffing - The Wyckoff Group is a full service staffing firm offering Temporary, Temp-to-Hire, Career Placement, Executive Recruiting and Consulting Services. Local businesses use Snelling to contract qualified individuals in a diverse range of positions including Administrative, Clerical, Light Industrial, Accounting & Finance, Legal and Biopharmaceutical work. The Wyckoff Group is a family of Snelling branches serving the following areas: New Jersey, Florida, Illinois and Pennsylvania. We have the people, expertise, network and resources to help you meet your business, professional and career goals. For more information, please call 732.389.0300 or visit www.snellingnj.com.

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Snelling Staffing - The Wyckoff Group is a full service staffing firm offering Temporary, Temp-to-Hire, Career Placement, Executive Recruiting and Consulting Services. The Wyckoff Group is a family of 7 Snelling locations in NJ, PA, FL, GA, MI and IL.