All posts by Wayne Rottger

Experian Employer Services works extensively with states and has seen how technology has changed and improved this industry. Sometimes that is a positive change such as the State Information Data Exchange System (SIDES).

Read on to learn more about ways UI can affect your business and what actions to take to achieve compliance and safeguard your experience rating.

With the UAW on strike in three states, it's crucial to review how strike-related unemployment affects unemployment benefits for employers and employees.

18 states and the Virgin Islands are set to receive funding to modernize their state unemployment insurance systems. Here's how that affects employers.

Connecticut passed Public Acts 21-200 & 22-67 to help with repayment of a Title XII advance and shore up its unemployment trust fund.

Employers and third-party agents operating in Colorado have a new portal to manage their unemployment accounts.

NASWA has several recommendations for employers to maintain compliance while managing unemployment claims related to Maui wildfires.

Improve your understanding of unemployment insurance tax rates to responsibly control the costs associated with this payroll tax.

Unemployment insurance (UI) is a type of insurance that provides money to individuals on a weekly basis when they lose their job and meet certain eligibility requirements. Those who voluntarily quit or were fired for a just cause are usually not eligible for UI. However, someone separated from their job due to a lack of available work and at no fault of their own usually qualifies for unemployment benefits.Each state administers its own UI program, despite it being federal law. Unemployment benefits are primarily paid out by state governments and funded by specific payroll taxes collected for that purpose. States are free to determine the level of employer tax, the benefit level and their duration, as well as the eligibility criteria. While the U.S. Department of Labor oversees the program and ensures compliance within each state, employers need to understand different aspects of the UI program as well as the requirements for employer liability and employee eligibility. This overview will cover Washington State UI to help employers with local operations better understand the requirements. Washington State UI Tax Employers in Washington state are required to pay state unemployment taxes, administered by the Employee Security Department (ESD). Unlike the Federal Unemployment Tax Act (FUTA) demanding employers to pay unemployment taxes for employees who earned more than $1,500, employers need to pay Washington state UI tax for an employee regardless of their wages. The Engrossed Substitute Senate Bill (ESSB) 5061 was passed in February 2021 to help provide unemployment tax relief for businesses through 2025. The Washington state UI tax rate varies from company to company. The ESD usually sends out a tax rate notice in December for the following year and there are two factors that go into assigning the Washington state UI tax rate: Experience-based tax based on employers’ experience of paying unemployment benefits over the past four years; andThe social-cost tax covering the unemployment tax that cannot be recovered from a specific corporation, such as a company that went out of business. In 2022, the average Washington state UI tax rate was 1.36%. The experience tax rate has been capped at 5.4% while social tax is currently capped at 0.75% and will increase annually until it reaches 0.90% in 2025. Employers must pay Washington state UI tax on the first $62,500 of each employee’s wages, in addition to FUTA taxes. When it comes to filing and paying quarterly Washington state UI tax, employers can file online through the ESD portal, Employer Account Management Services (EAMS), SecureAccess Washington (SAW) account, or by mailing one of their original forms. Paper forms must be obtained through the ESD and cannot be copied due to a unique link used to scan information. To pay online, employers may choose to use EAMS or the ESD ePay portal. They can also pay by mail by requesting a payment voucher from the ESD. Washington state UI tax payments and reports are due every quarter by the last day of the month following the last day of each quarter. In other words: April 30;July 31;October 31; and January 31. Payments can be postmarked by the following business day if the due date falls on a weekend or holiday. Washington State UI Employee Eligibility In addition to determining employer liability for Washington state UI, ESD handles unemployment benefits and establishes eligibility on a case-by-case basis. Applicants must meet the following criteria to qualify for unemployment benefits: They must have lost employment through no fault of their own;They must have worked at least 680 hours during the base period or the first 12 months of the 15 months prior to filing a claim;They must be unemployed or partially employed and earning less than their weekly unemployment insurance benefits; andThey must be able, available and actively seeking work. To determine if workers are eligible for unemployment benefits ESD also examines the reason why they are unemployed or not working full time. As part of this process, ESD considers if applicants: Were laid off or discharged;Quit their job;Were discharged from the military;Are involved in a strike or labor dispute;Are on a leave of absence; orAre still working. Finally, ESD examines applicants’ availability for work for the weeks they claim. Workers cannot apply for unemployment benefits in Washington or file weekly claims if they did not work in this state during the past 18 months. The only exceptions are if they were in the military or worked for the federal government. Meeting UI Tax Requirements in Different States Many people mistakenly believe that unemployment benefits come from a fund paid into by employees, like Social Security or Medicare. However, employers almost entirely fund unemployment. Only three states, Alaska, New Jersey and Pennsylvania, assess unemployment taxes on employees, and it is a small portion of the overall cost. Each state has its own financing method and its own calculation to determine the tax rate employers pay, making the calculation of their organization’s unemployment tax rate a puzzle. This is especially true if an organization operates in multiple states with multiple tax finance methods. Given that higher tax rates have a long-term impact on employers, it is necessary to establish proactive measures to keep unemployment costs low. In addition to smart and prudent hiring, careful documentation, specific, actionable feedback given to employees and contesting unemployment claims, employers need to understand both federal and state requirements, including Washington state UI. To simplify this process, employers can rely on automated unemployment claims software and simplify UI claims management. As a result, they can reduce administrative burden, stay compliant with the necessary regulations and optimize state unemployment insurance tax savings.

Learn about effective ways to manage your unemployment insurance cost, improve employee retention and upgrade your human resource practices.

Learn how unemployment insurance affects employers across the country and what you can do to avoid UI overpayments and minimize costs.

States are notifying employers of new unemployment tax rates for 2023. Learn how this may affect your taxes, and steps you can take to reduce your rate.

Learn about different aspects of Pennsylvania unemployment compensation to stay compliant, and control UI costs in a more effective way.

This guide to UI employer liability and employee eligibility can help you reduce your Ohio unemployment employer tax risk and maintain compliance.

Learn more about UI employer liability and employee eligibility in Illinois to stay compliant with both state and federal regulations and reduce unnecessary costs.

This webinar provides best practices for projecting your future UI tax rate and how to adapt to a new tax landscape changed by the COVID-19 pandemic.

A FUTA credit reduction is imminent in these states for 2023, which would mean higher taxes for employers operating in these jurisdictions.

State governments primarily pay out unemployment benefits funded by specific taxes collected for that purpose. Given that navigating through state unemployment programs presents many challenges, we have created a blog series outlining some of the specifics, such as employer liability, employee eligibility, benefit levels and duration in different states. Unemployment Insurance in Texas The Texas Workforce Commission (TWC) administers the UI program in Texas. The Texas Unemployment Tax Act (TUCA) establishes the provisions of the UI system in Texas, defines employment and establishes which types of employers participate in the unemployment tax system. Employers who meet requirements for UI employer liability in Texas are required by law to participate in the Texas state unemployment tax program. Liable employers must report employee wages and pay the unemployment tax based on the TUCA. Employers covered by UI employer liability in Texas include: Sole proprietorships; Partnerships; Limited Liability Companies (LLC); Professional Limited Liability Companies (PLLC); Limited Partnerships (LP); Limited Liability Partnerships (LLP); Professional Corporations (PC); Professional Associations (PA); corporations and foundations; Associations; Trusts; Estates; Banking institutions; Political subdivisions; and Government agencies. UI employer liability in Texas differs for different types of employment and TWC uses three employment categories: regular, domestic and agricultural. Regular Employment Under any of the following circumstances, employers meet requirements for UI employer liability in Texas if they: Have Texas employees and are subject to the Federal Unemployment Tax Act (FUTA) in Texas or another state; Pay at least $1,500 in total gross wages to employees in any calendar quarter; Pay at least one employee for a minimum of one hour a day during 20 different weeks in a calendar year; Have been designated as a 501(c)(3) organization by the IRS and have at least four full- or part-time employees for 20 different weeks in a calendar year; or Acquire or take over, through any means, the total or partial assets of a business, trade, organization or workforce that is liable for the UI tax. Domestic Employers Under any of the following circumstances, employers meet requirements for UI employer liability in Texas if they: Pay $1,000 or more in total gross wages in a calendar quarter; or Take over the domestic employees from another household that is liable for the UI tax. Agricultural Employment Under any of the following circumstances, employers meet requirements for UI employer liability in Texas if they: Employ at least three employees for a minimum of one hour a day for 20 weeks in a calendar year; Pay at least $6,250 in total gross cash wages to employees in a calendar quarter; Employ a seasonal worker on a truck farm, orchard or vineyard; Employ a migrant or seasonal worker who works for a farmer, ranch operator or labor agent; or Acquire or take over, through any means, the total or partial assets of the business, trade, organization or workforce that is liable for the UI tax. UI Employee Eligibility in Texas TWC evaluates eligibility for unemployment benefits claim based on: Past wages; Job separation; and Ongoing eligibility requirements. To qualify for UI employee eligibility in Texas, employees have to meet requirements in each of these three areas. Past Wages Past wages are one of the requirements for UI employee eligibility in Texas that also serves as the basis of potential unemployment benefit amounts. TWC uses the taxable wages, earned in Texas, that employers have reported during the base period to calculate unemployment benefits. The base period is the first four of the last five completed calendar quarters before the effective date of the initial claim. To have a payable claim, employees must meet the following requirements: They have wages in more than one of the four base period calendar quarters; Their total base period wages are at least 37 times their weekly benefit amount; and If they qualified for benefits on a prior claim, they must have earned six times their new weekly benefit amount since that time. Job Separation To meet the requirements for UI employee eligibility in Texas based on job separation, employees must be either unemployed or working reduced hours through no fault of their own. Examples include layoff, reduction in hours or wages not related to misconduct, being fired for reasons other than misconduct, or quitting with good cause related to work. Ongoing Eligibility Requirements In addition to the past wages and job separation, there are requirements for UI employee eligibility in Texas that employees must continue to meet. To do so, employees must be totally or partially unemployed and meet all of the following conditions: Meet all work search requirements, unless TWC exempts employees from work search; Request payment for weeks of unemployment, when scheduled; Be physically and mentally able to work; Be available for full-time work; Participate in reemployment activities as required; and Respond to requests from TWC or a Workforce Solutions office as instructed. Reducing Unemployment Costs Employers have several things to keep in mind when it comes to paying taxes. Understanding unemployment insurance and how unemployment claims can affect their tax rates is one of many challenges that employers have to overcome. Given that each claim assessed to an employer’s account can lead to a tax rate increase in future years, they should take all the necessary steps to reduce their unemployment costs. While determining whether former employees are eligible for unemployment benefits or going through the hassle of fighting unemployment claims is complex and time-consuming, employers need to prevent UI benefit charges to keep their unemployment tax rate low. To simplify this process and reduce the overall expenses, employers can use an efficient software tool to manage their unemployment costs. This allows them to significantly improve every aspect of managing unemployment claims, consolidate relevant UI information for better decision making, gain access to more accurate and timely data to improve business processes, work with knowledgeable unemployment tax professionals and rely on their expertise. To simplify this process and reduce the overall expenses, employers can use an efficient software tool to manage their unemployment costs. This allows them to significantly improve every aspect of managing unemployment claims, consolidate relevant UI information for better decision making, gain access to more accurate and timely data to improve business processes, work with knowledgeable unemployment tax professionals and rely on their expertise.