Guide To Unemployment Compensation
Rates and Eligibility Requirements for a Rate Based on Experience
Employer contribution rates are established
on a calendar year basis. Qualification for a rate based on experience (the
ratio of chargeable benefit payments to taxable payroll) requires that an
employer's "experience account" be chargeable with benefits for at least one
full year ending June 30th of the year preceding the year during which the
rate will be in effect.
Employers chargeable with benefits for two
full "experience years" are rated on the basis of those two years; employers
chargeable for three or more years are rated on the basis of the most recent
three years only.
Rate for Newly Liable Employers
If an employer's exposure to benefit charges
commences on or before July 1st of a given year, the employer does not qualify
for an experience rate for that calendar year or the year which follows. If
chargeability begins after July 1st, the employer will not qualify for that
calendar year and the two years which follow.
If the employer's account has not been
chargeable with benefits for a sufficient period of time to be experience
rated, his rate is the higher of 1% or the state's five‑year benefit cost
rate. That rate is computed annually by dividing the total benefits paid to
claimants during the five consecutive calendar years preceding the computation
date by the total amount of taxable wages for the same period.
Contribution Rate Statements (Form UC‑54A)
are issued to all employers during the first quarter of each year, including
those with insufficient experience to be experience rated.
Five‑year benefit cost rates for recent years
are as follows:
Employers' experience rates are computed by dividing the total benefits charged
to an employer's experience account for the experience period (one to three
years) ended the previous June 30th by the employer's taxable wages for the same
period which have been reported by the employer on or before the following
September 30th. This figure is the employer's "Benefit Ratio" which, rounded to
the next highest one tenth of one percent, is the employer's "charged rate."
Fund Balance Tax Rate
This rate is added to the charged rate and is
established to maintain a balance in the Unemployment Compensation Trust Fund
equal to eight tenths of one percent of total wages paid to workers by
contributing employers during the years ending the last preceding June 30th .
The Fund Balance Tax Rate is determined as of December 30th each year and ranges
from 0% or to 1.4% .
The contribution rate consists of a percentage
which is the sum of:
1. The individual employer's charged
2. The Fund Balance (solvency) tax rate.
provides for the mandatory transfer of experience of one or more employers to an
employer who acquires "substantially all of the assets, organization, trade or
business" of a covered employer(s). Employers who acquire less than
"substantially all" may acquire a portion of the predecessor's experience,
provided that payroll records have been so maintained that the employment
experience of the portion acquired may be readily identified and separated for
experience rating purpose.
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