Who pays to finance State Unemployment Insurance Benefits?
Employers provide 100% of the funds required to finance Unemployment Insurance Benefits paid to Claimants.

Can an employer "control" the SUI Tax?
Yes! Unemployment Insurance is the only controllable employer payroll tax. If an employer manages its Unemployment Program effectively (or employs a third-party administrator to do so) it can substantially control and reduce the amount of Unemployment Taxes it pays.

Do employees "pay into" Unemployment?
With the exception of a small employee tax in Alaska, Pennsylvania and New Jersey, employers pay 100% to finance Unemployment Insurance Benefits.

Can ex-employees collect Unemployment if they quit a job?
Yes, depending on the reason for the voluntary resignation. The specific laws vary from state to state. Generally, a "compelling, work-related reason" must exist for voluntarily leaving employment in order to collect unemployment benefits. Some states, California and New York for example, do not require the "compelling reason" to be work-related. Always, Claimants must show that they made every reasonable effort to retain employment before leaving.

How long can ex-employees collect Unemployment?
A maximum of 26 weeks (WA and MA, 30 weeks). Benefits are extended when the Unemployment Rate within a state reaches a specified level. The Federal-State Extended Unemployment Compensation Act of 1970 established a second layer of benefits for claimants who exhaust their regular entitlement during periods of relatively high unemployment in the state. An additional 13 weeks of benefits are provided, financed 50% by the Federal Government, and 50% by the state.

Can an ex-employee collect Unemployment Benefits if they are "disabled"?
Generally, no. Unemployment Insurance is intended for individuals who are able, available, and actively seeking employment.

What's the "base period"?
Generally, the 1st four of the last five completed calendar quarters. It is used to determine whether or not a Claimant has sufficient historical earnings to qualify for Unemployment Benefits, the Claimant's weekly benefit amount, and the "chargeable employer(s)" for a given claim.

Example (Claim filed 2nd Quarter 2005 = A Base Period of January-December 2004)

How much can an ex-employee collect in Unemployment Benefits?
Every state has its own minimum and maximum Weekly Benefit Amount. The lowest minimum Weekly Benefit Amount in the nation is $5.00 (Hawaii). The highest maximum Weekly Benefit Amount in the nation is $766.00 (including dependant allowance) in Massachusetts.

What is the "Weekly Benefit Amount" based on?
The weekly benefit amount is directly related to the individual's usual wage. The benefit amount should represent generally a 50% wage replacement (up to the maximum amount allowed in the state.)

What is the "waiting period for Unemployment Benefits?
One (1) week after the filing of the claim with the exception of AL, CT, DE, GA, IA, KY, MD, MI, NV, NH, NJ, VT, and WI which have no waiting period.

Is an Unemployment Hearing a "trial"?
An Unemployment Hearing is a "minor" judicial proceeding. Testimony is taken under oath or affirmation and is recorded on public record. The Rules of Evidence are far more lenient than in a courtroom.

Do I need a lawyer to attend an Unemployment Hearing?
No. It is not common for parties at an unemployment insurance hearing to be represented by an attorney. In fact, most parties who wish to be represented employ "Hearing Representatives" who are not attorneys. Often, employers (and claimants) represent themselves. However, several states require that if a party is represented by "counsel," that individual must be an attorney.

What states only allow attorneys to represent parties in an unemployment insurance hearing?
AZ, MO, NJ, NC, SC, SD, and WV. *This list of states is subject to change.

How is an employer's SUI Tax Rate established?
Each state's employer SUI tax rate is calculated in a different (but similar) manner. The employer's "experience" (or history) is used to calculate the tax rate. The critical experience factors are payroll history (which indicates employee count and turnover) and Benefit Charge history (which is a record of Unemployment Benefit Charges an employer has had to "pay" for ex-employee's Unemployment Claims.) The fewer claims an employer has experienced the lower the SUI Tax Rate will be. The SUI Tax Rate is a percentage of "Taxable Payroll" (not total payroll).

What is "Taxable Payroll"?
Taxable Payroll is the amount of wages paid to employees that is subject to SUI Taxes. The amount is capped to the first "X" amount of dollars paid to each employee in wages. Each state has its own "Taxable Wage Base." See the attached SUI Tax Rate Table.

What is the Minimum and Maximum SUI Tax Rate?
Please visit the ADP Tax & Financial Services web site for the most current SUI tax information.

What's the difference between FUTA and SUI tax?
The Federal Unemployment Tax Act (F.U.T.A.) is a non-controllable tax paid to the Federal Government. The Federal Taxable Wage Base is $7,000. Employers pay 0.8% of the first $7,000 that each employee earns (a maximum of $56.00 per employee.) The SUI tax varies for each employer based upon their individual experience.

Are employers notified as to whose Unemployment Benefits they are being held liable for?
Yes. On either a weekly, quarterly, or annual basis (depending upon the state) the State Agency issues a Benefit Charge Statement. Also, if a claim is protested in a timely manner, the state agency will immediately issue a "determination" indicating whether or not the claimant is eligible for benefits and/or whether or not the employer is liable for the claim.

Are the state agencies against employers in assessing Benefit Charges? No! The US Department of Labor reported that in Calendar Year 2003, on average, 9.3% of all Unemployment Insurance Benefits paid to Claimants were paid in error (and hence, employers were erroneously charged). The Benefit Charge Statement should be audited by the employer (or the employer's Third Party Administrator) to ensure accuracy. Some common errors include charging an employer for:

an employee's benefits who never worked for the company for benefits paid when "relief of charges" has been granted for benefits paid in excess of the employer's liability