The College Credit Card Services Has a Significant Increase in Business

Essay

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.College's permanent employment total is 350 workers.Because of these yearly layoffs,College's 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:
1.Should College stop hiring temporary employees and ask its full-time workers to work overtime to handle the extra load?
2.Should College get its temporary employees from a temporary employment agency and therefore not be subject to the extra taxes?