26 Jun A. SHOULD COLLEGE STOP HIRING TEMPORARY EMPLOYEES AND ASK ITS FULL-TIME WORKERS TO WORK OVERTIME
The College Credit Card Services has a significant increase in business each spring due to a large increase in new applicants from graduating college students. Subsequently, each spring 40 temporary workers are hired for a 12-week period, working 40 hours per week at $10 per hour and then they are laid off. Colleges permanent employment total is 350 workers. Because of these yearly layoffs, Colleges state unemployment merit tax rate is 9%. If the number of layoffs could be reduced, the merit tax rate could be reduced to 4.1%. As the payroll specialist for College, you have been asked to evaluate the following and determine the pros/cons of each decision:
a. Should College stop hiring temporary employees and ask its full-time workers to work overtime to handle the extra load?
b. Should College get its temporary employees from a temporary employment agency and therefore not be subject to the extra taxes?
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