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Is there a way to structure the employment agreement so employees are not filing for unemployment when the business closes for days off?

I manage a small (8 employees) medical practice that closes when the employer/physician is on vacation. This year, for the first time, the employees have been filing unemployment during these closed days (even part-time employees). This is going to cause a significant increase in SUTA taxes next year. The number of days open vs. closed has remained relatively constant for the past 5 years. Is there a way to structure employment contracts to have employees take vacation when the employer does, and to agree to the number of days open (the schedule is made over 1 year in advance, so everyone knows work days vs. closed days) as part of accepting or continuing with the job. The office is well-run and the physician is easy to work for/with. This has been a real kick in the gut for the employer who offers higher than average compensation + yearly bonus and a generous benefits package with medical, retirement, vacation, etc. Thank you for your input.


Len Green
Title: Performance Improvement Consultant and E..
Company: Haygarth Consulting LLC
LinkedIn Profile
(Performance Improvement Consultant and ERP Strategist, Haygarth Consulting LLC) |


A few things come to mind:
1. Consult an HR attorney/expert in your state first. I'd want to know if the medical practice is viewed as a seasonal employer vs what the physician thinks is a full time employer, and how that affects employees' legal rights to claim UI. Plus you'll learn what other legal labor implications need to be considered when restructuring employment agreements.
2. Consider the human relations aspect of this from both sides. Is it really a kick in the gut or is it both sides misunderstanding the situation or something else? Make sure your decision making is not based (or communicated to staff as the main reason) on a few dollars of SUTA that could undermine employee productivity, longevity and practice efficiency.
3. Then consider options before deciding. And plan your communications carefully.

Topic Expert
Malak Kazan
Title: VP, Special Projects
Company: ERI Economic Research Institute
(VP, Special Projects, ERI Economic Research Institute) |

I concur with Len and would pose the following for you to probe/consider:

Is the treatment of their pay communicate in a policy/handbook in advance?
To address the likely "personal cash flow" issue, explore feasibility of spreading the annualized pay equally over the year including the time the office is closed.
The treatment of pay for exempt vs non-exempt overtime eligible employees are distinct in this circumstance (exempt will likely have to be paid whereas non-exempt you can avoid paying for time not-worked) depending on the FLSA classification (depending on facts & circumstance & State regs)

Hope this helps.


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