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Citation preview
Ross E Henderson Emptech1045am ndash 1215pm Friday October 9 2015
Meet Your Presenter
Ross E Hendersonrhendersonemptechcom
COO EmptechPresident Association of Unemployment Tax Organizations (ldquoAUTOrdquo)
Advisory Board Member HRcom (Core HR Payroll) APA GRTF Unemployment Insurance Subcommittee
wwwemptechcom | 18005183874 | infoemptechcom
Emptech Solutions
wwwemptechcom | 18005183874 | infoemptechcom
Cloud-based HR Technology and Skilled Consulting
Compliance Efficiency amp Bottom Line Benefit
bull Applicant Tracking Systembull Efficient Onboarding amp HR ToolsTalent Management
bull Integrated E-Verifybull Easy-to-use High Compliance PlatformElectronic I-9
bull Verification of Income amp Employmentbull Employee satisfaction with 247 serviceIncome Verification
bull Claims administration amp appeals representationbull UI Cost Control
UI Claims Management
bull Hiring Based Credits WOTCbull Retrospective Research and $$$ Refund RecoveryCredits amp Refunds
bull Mergers amp Acquisition Employment Taxbull Compliance amp Tax $avingsTax Consulting
Agenda
wwwemptechcom | 18005183874 | infoemptechcom
I Macro Economic Overview
II Federal FICA amp FUTA
III State UI
IV State Spotlights CA CT NJ NY
V UI Legislation amp Enforcement
VI Tax Optimization Tips
Fun Gifts
Audience Questions
wwwemptechcom | 18005183874 | infoemptechcom
bull Company Structure
bull Payroll Structure
bull Employment Tax Structures
bull Employment Tax Challenges
Job Growth amp Unemployment
wwwemptechcom | 18005183874 | infoemptechcom
August 2015 ndash 51 Unemployment Rate
Source Bureau of Labor Statistics
FICA Overview
wwwemptechcom | 18005183874 | infoemptechcom
bull Federal Insurance Contributions Act (ldquoFICArdquo) codified under USC Title 26 Chap 21
bull Entire FICA remains 153 (SS tax 124 + Medicare 29) equally shared between Employer ldquoERrdquo and Employee ldquoEErdquo ERs must withhold additional 09 from EErsquos wages in excess of $200K (no ER matching contribution)
bull Supreme Court rules FICA tax due on severance pay
bull Social Security Wage Baseo 2015 = $118500 (max $7347 SS tax)o 2014 = $117000 (max $7254 SS tax)o 2013 = $113700 2012 = $110100
FICA ndash IRS Notice 2015-15
wwwemptechcom | 18005183874 | infoemptechcom
bull Potential change of FICA refund rules o EE consent used to support a claim for refund under
sect 6402 of IRC and sect 316402(a)-2 of ETR for overpaid taxes under FICA and RRTA
bull Proposedo EE consent must identify basis of the claim for refund
and be signed under penalties of perjuryo Defines ldquoreasonable effortsrdquoo Would permit but not require EE consent to be
requested furnished retained electronically
bull IRS currently evaluating position
FICA Changes ndash APA
wwwemptechcom | 18005183874 | infoemptechcom
APA response to IRS on the FICA
- affirming all except certain ER-side only filings
FUTA Overview
wwwemptechcom | 18005183874 | infoemptechcom
bull Federal Unemployment Tax (FUTA) designed to help fund UI Admin ndash codified under USC Title 26 Chap 32
bull 6 rate with fixed $7000 taxable wage base effective rate after applying 54 credit is 06
bull Due to state needs to borrow Title XII loans from Fed to fund their State UI programs many states triggered FUTA Credit Reductions ndash involuntary repayment
bull States with Title XII loans for 5 years trigger additional reduction via Benefit Cost Reduction (BCR) factor
State by State Trust Fund
wwwemptechcom | 18005183874 | infoemptechcom
Red = borrowing as of 8415 Brown = using ER-financed bonds to repay Title XII loansYellow = less than 6 mos of positive balances Green = more than 6 mos of benefits
State Trust Fund Solvency as of August 2015 Map taken from July 2015 SUCAP Report based on US DOL UI data quarterly summary charts amp SUCAP Reports
State Solvency Health Update
wwwemptechcom | 18005183874 | infoemptechcom
US DOL ETA UI Actuary Report (July 2015)
bull Projected 2015 FUTA Rates ndash ldquopotentialrdquo BCR add-ons for 8 states
bull State Trust Fund Solvency vs US DOL Guidelines ndash only 17 states meet guidelines
bull In 2010 $196B of $42B in state UI debt (466) was private market
bull By 2014 $892B of (then) total $23B (3878) was private market
bull In 2015 new federal standards eliminate interest free loans to states with outstanding debts
Obama FY 2016 Budget
wwwemptechcom | 18005183874 | infoemptechcom
The FY 2016 Budget Key Pointsbull Increase FUTA tax rate from 06 to 08 in CY 2016
(effectively increases base from $42 to $56 per EE for 2016 in all states - 3333 increase)
bull States would be required to increase unemployment tax bases from as little as $7000 to $40000 (471 increase) Forces states to dramatically cut contribution rates or pass astronomical UI tax increase to ERs
bull In 2017 States would be reqrsquod to have a min tax equiv to 0175 on a $40000 tax base ($70 per EE) that would increase indefinitely based on avg wage increases
UI Tax Rate Trends
wwwemptechcom | 18005183874 | infoemptechcom
but average taxable wage bases continue to increase (up over $17K in 2014)
Source DOL
FUTA Credit Reduction amp ldquoBCRrdquo
wwwemptechcom | 18005183874 | infoemptechcom
Potential 2015 FUTA Credit Reductions from US DOL (July 2015)
UTax
These states had Title XII advance balances on Jan 1 2015 and are potentially subject to a reduction in FUTA credit on their IRS Form 940 for 2015 if the outstanding advance is not repaid by Nov 10 2015
2015 Potential Applied ForCredit Reduction 2015 Potential 2015 Potential 2015 Potential Total FUTA Credit Reduction
State(1) Due to Outstanding Advance(2) 27 add-on (3) BCR add-on(4) Credit Reduction(5) Relief (6)
California 15 00 14 29 BCR WaiverConnecticut 15 00 06 21Indiana 18 00 09 27 BCR WaiverKentucky 15 00 06 21 BCR Waiver FUTA CapNew York 15 00 00 15North Carolina 15 00 08 23Ohio 15 00 11 26 BCR WaiverSouth Carolina 18 00 03 21Virgin Islands 15 00 16 31 BCR Waiver
(1) These states have passed at least two consecutive January 1s with an outstanding Federal advance and are therefore subject to a FUTA credit reduction
(2) For each Jan 1 a state passes with an outstanding advance following the second one ERs in the state are subject to an additional 03 reduction in FUTA credit
(3) Following their third Jan 1 with an outstanding advance states are subject to an additional FUTA credit reduction called the 27 Add-on A description of this add-on is in FUTA 3302(c)(2)(B)
(4) These states are also potentially subject to the Benefit Cost Rate (BCR) additional credit reduction formula for having passed five consecutive Jan 1s with an outstanding Federal advance- FUTA section 3302 (c) (2)
(5) The FUTA credit reduction for 2015 is calculated by adding the credit reduction due to having an outstanding advance plus the reduction from the 27 add-on or the BCR add-on which if it is zero is replaced by the 27 add-on
(6) A state may apply for relief from a reduction in its FUTA credit under section FUTA 3302 The deadline for application of relief for all types was July 1 2015
(7) Final determination of the FUTA credit reduction will not be made until following the Nov 10 2015 repayment deadline
UI Tax Rate Determination
wwwemptechcom | 18005183874 | infoemptechcom
bull Primary Determination methodso Reserve Ratio (UI reserve balance avg taxable payroll)o Benefit Ratio (UI benefit charges taxable payroll)
bull New Employer UI Rate
bull Min ndash Max UI rateso Max UI rate no less than 54
bull SuccessionbullUI Transfer of Experience
bullState Rate Schedule adjustmentso Varies by overall UI trust fund balance
bull UI Voluntary Contributions
The Empire State (NY) UI Overview
wwwemptechcom | 18005183874 | infoemptechcom
bull Unemployment Rate (July 2015) 55
bull Trust Fund Positive Balance (July 2015) $8074000
bull rsquo15 Taxable Wage Base $10500 (and rising)
bull lsquo15 UI Tax Rates 21 min ndash 99 maxo 41 New ER UI
bull Paid back Title XII Federal UI loans
bull lsquo15 MinMax Weekly Benefit $100$420 (and rising)
bull State Information Data Exchange System (ldquoSIDESrdquo) UP
bull Voluntary Contribution state
The Garden State (NJ) UI Overview
wwwemptechcom | 18005183874 | infoemptechcom
bull Unemployment Rate (July 2015) 61
bull Trust Fund Positive Balance (July 2015) $255988000
bull lsquo15 Taxable Wage Base $32000
bull FY16 UI Tax Rates 12 min ndash 7 maxo New ER UI rate 34
bull lsquo15 Min Max Weekly Benefit $99-646
bull Voluntary Contribution state
The Garden State (NJ) UI Updates
wwwemptechcom | 18005183874 | infoemptechcom
Signed legislation 2014 thru July 2015
bull NJ AB3812 - requires electronic notification of death record to Dept to reduce UI fraud
bull NJ AB4189 - modifies short-time unemployment benefit lawbull NJ SB3097 - permits employee leasing companies to use ELC
experience rate or that of member companiesbull NJ SB1622 - withholding of state payments to vendors for delinquent
UI and disability taxesbull NJ SB2414 - amends DOLWD personnel access to UI claims receipt
and processing systembull NJ SB2082 - amends UI eligibility when claimant leaves work amp
subsequently laid off from work
The Constitution State (CT) UI Overview
wwwemptechcom | 18005183874 | infoemptechcom
bull Unemployment Rate (July 2015) 57
bull Trust Fund Loan Balance (Sept 2015) -$102M
bull rsquo15 Taxable Wage Base $15000
bull lsquo15 Tax Rates 19 min ndash 68 maxo New ER UI Rate 49
bull lsquo15 Potential FUTA Tax rate 21o 15 Basic FCR + 06 BCR add-ono Potential total FUTA cost per EE $189
bull rsquo15 MinMax Weekly Benefit $15 - 669
The Constitution State (CT) UI Updates
wwwemptechcom | 18005183874 | infoemptechcom
bullCT HB6707 Signed by Governor 7215 prevents ERrsquos base period account from being charged for unemployment benefits if claimant has been discharged or suspended because claimant lost their operatorrsquos license as a result of failing a drug alcohol test while off duty
bull CT is the only state subject to BCR add on (06) that has not applied for a waiver
o This is the second year CT has neglected to request a waiver
The Golden State (CA) UI Overview
wwwemptechcom | 18005183874 | infoemptechcom
bull Unemployment Rate (July 2015) 63
bull Trust Fund Loan Balance (Sept 2015) - $58B
bull lsquo15 Taxable Wage Base $7000
bull lsquo15 Tax Rates 15 min ndash 62 max o Schedule ldquoF+rdquo o 34 New ER rate
bull lsquo15 Potential FUTA Tax Rate 29o 15 Basic FCR + 14 BCR add ono $203 addtrsquol FUTA cost due to credit reduction and BCR
bull lsquo15 MinMax Weekly Benefit $40-450
The Golden State (CA) UI Updates
wwwemptechcom | 18005183874 | infoemptechcom
bull California is subject to the BCR add-on but has applied for a waivero Estimated BCR add on for 2015 is 14 o If the BCR waiver is approved the net cost is potentially $147 per
EE otherwise it could be $245 per EEo Final determination will be made by DOL after Nov 10 2015
bull Uber amp Lyft decisions on worker classification o EE vs independent contractor
bull UI appeals hearings ndash SB 1314 enacted extends deadline to file appeals
bull Administrative changes to law on UI Transfer of Experience when assets are acquired
bull SB 1131 enacted - members of LLC are not employees
The Buckeye State (OH) UI Overview
wwwemptechcom | 18005183874 | infoemptechcom
bull Unemployment Rate (July 2015) 5
bull Trust Fund Loan Balance (Sept 2015) - $875M
bull lsquo15 Taxable Wage Base $9000
bull lsquo15 Tax Rates 3 min ndash 108 max o New ER UI Tax Rate 27
bull lsquo15 Potential FUTA Tax Rate 26o 15 Basic FCR + 11 BCR add ono $182 addtrsquol FUTA cost due to credit reduction and BCR rsquo15
bull Voluntary Contribution state
Key Federal UI Legislation
wwwemptechcom | 18005183874 | infoemptechcom
bull 2004 SUTA Dumping Act
bull 2011 TAAE UI Integrity Act (Sec 252)
bull 2012 ATRAbull EE SS tax rate return to normal
Audience Questions
wwwemptechcom | 18005183874 | infoemptechcom
bull Changes in ET Structure
bull MampA Activity
2004 SUTA Dumping Prevention Act
wwwemptechcom | 18005183874 | infoemptechcom
bull SUTA Dumping (aka ldquounemployment tax avoidancerdquo) occurs by shifting EEs to a less-taxed entity to avoid paying a higher UI tax rate
bull Migration of EEs between legal entities (MampA consolidation etc) may trigger time-sensitive mandatory compliance reporting ndash misunderstood amp often missed
bull Penalties for missing or incorrect reporting can include max UI ratings civil ampor criminal penaltiesbull SUTA Dumping Detection Software for enforcement
bull Read Employerrsquos MampA ldquoTo Dordquo List
2011 Federal Act ndash UI Integrity
wwwemptechcom | 18005183874 | infoemptechcom
bull Follow on to 2009 Executive Order to reduce improper UI payments
bull Under UI Integrity rules states must not relieve employers of charges when they fail to respond timely or adequately to UI claims related agency requests bull Pattern of Failure as little as two instances
bull Employers cannot collude with employee to misuse unemployment claim system
bull Each state has unique rules method of enforcement being formulated
ldquoPattern of Failurerdquo Financial Impact Example
wwwemptechcom | 18005183874 | infoemptechcom
Case Study
bull ER With 100 SeparationsYr ldquoPattern of Failurerdquo classification bull Benefit$ paid to claimant prior to successful Appeal by ER
FACTORS FIGURESWeekly benefit amount Assume $300
Time to appeal 8 weeks
of claims lost on initial determination amp won by ER on Appeal
10 (out of 100 total separations)
Charge to ER UI account $24000 ($2400 x 10 claims) now NON-RECOVERABLE due to ldquoPattern of Failurerdquo
Additional Exposure Negative Impact bull May raise AUDIT RISK for other UI areas
bull May elevate ER experience rating
ldquoPattern of Failurerdquo Example Letter
wwwemptechcom | 18005183874 | infoemptechcom
Compliance amp Enforcement UI Integrity
wwwemptechcom | 18005183874 | infoemptechcom
bull Unemployment Claims ldquoTriggerrdquondash Claims filings from an EE associated with a MampA event may
trigger an ldquoevaluationrdquo of the succession reporting due to confusion surrounded which ER responsible for benefit charge
bull ldquoSDDSrdquo (SUTA Dumping Detection Software) ndash Many States using SDDS to ldquocatchrdquo EE migrations ndash Flags accounts for review to see if UI succession reporting
completed
bull ldquoQETPrdquo (Questionable Employment Tax Practices)ndash Under QETP IRS and 37 states sharing information and
specifically focusing on ET for auditsndash As of mid-2012 QETP has resulted in audits of 11000
employers
Audit Alert Inter-Agency Info Sharing
wwwemptechcom | 18005183874 | infoemptechcom
bull Questionable Employment Tax Practices ldquoQETPrdquo Initiativebull 37 States amp IRSbull 12000+ business examined thru lsquo12
bull Fed amp state info sharing data mining amp cross-agency task forces
bull Significant focus on worker classification
bull Significant incentives to states to aggressively audit
UI Tax Optimization Focus
wwwemptechcom | 18005183874 | infoemptechcom
bull UI Cost Control
bull UI Retrospective Review
UI Benefit Charges Material Expense
wwwemptechcom | 18005183874 | infoemptechcom
UTax
UI Integrity Oversight Plan
wwwemptechcom | 18005183874 | infoemptechcom
UTax
Designate a Person or Team
Total UI Claims (also by
statelocation)Which claims failed to be
timely adequate
Why Who
Track winloss for protests For
losses why WhoTrack winloss for
appeals Why Who
Impact on experience
rating Calculate cost
to organization
Find amp fix areas of organizational
weakness
UI Integrity Oversight Plan
wwwemptechcom | 18005183874 | infoemptechcom
UTax
ldquoACTrdquoProvide information to UI
agencies that isAccurateComplete
Timely
Best Practices
UI Claims Admin Reporting
wwwemptechcom | 18005183874 | infoemptechcom
ldquoFloat like a butterfly sting like a bee You cannot hit what you cannot seerdquo
Muhammad AliPeriodicReports
Separations
Claims
Win LoseBy Location
Liability Charges
Retro UI Review
wwwemptechcom | 18005183874 | infoemptechcom
General Evaluationbull Contact ALL UI jurisdictions
bull Perform account balancing (per state records) ndash QTR by QTR rearward review
bull Determine what credits found eligible for refund amp if debits found if correct
bull Research for any missing incomplete or untimely reporting on the account
bull Review all MampA past 3 years
bull Help reduce source of potential penalty or increased UI tax expense
Photo credit motone
UI Resources
wwwemptechcom | 18005183874 | infoemptechcom
bull 10 Questions for Internal SUTA Dumping Assessmentbull How Nonprofit Employers Can Reduce UI Costs bull FAQs on Employment Tax Compliance amp Savings in MampA
Go here to download three pages of UI Tips from Emptech
EmptechrsquosUI Tips
Download this one page checklist to assess the state of your UI Claims Administration
Is Your UCM
Broken
Get them here
Get our Top 15 Tips for MampA Tax Treatment
EmptechBlog
Go here to see the latest news on HR Payroll and Employment Tax topics
Thank You
wwwemptechcom | 18005183874 | infoemptechcom
Questions
Contact (203) 738-0545 rhendersonemptechcom
- Employment Tax Consulting- UI Claims Management- Credits- Talent Management- Electronic I-9- Verification of Employment
Meet Your Presenter
Ross E Hendersonrhendersonemptechcom
COO EmptechPresident Association of Unemployment Tax Organizations (ldquoAUTOrdquo)
Advisory Board Member HRcom (Core HR Payroll) APA GRTF Unemployment Insurance Subcommittee
wwwemptechcom | 18005183874 | infoemptechcom
Emptech Solutions
wwwemptechcom | 18005183874 | infoemptechcom
Cloud-based HR Technology and Skilled Consulting
Compliance Efficiency amp Bottom Line Benefit
bull Applicant Tracking Systembull Efficient Onboarding amp HR ToolsTalent Management
bull Integrated E-Verifybull Easy-to-use High Compliance PlatformElectronic I-9
bull Verification of Income amp Employmentbull Employee satisfaction with 247 serviceIncome Verification
bull Claims administration amp appeals representationbull UI Cost Control
UI Claims Management
bull Hiring Based Credits WOTCbull Retrospective Research and $$$ Refund RecoveryCredits amp Refunds
bull Mergers amp Acquisition Employment Taxbull Compliance amp Tax $avingsTax Consulting
Agenda
wwwemptechcom | 18005183874 | infoemptechcom
I Macro Economic Overview
II Federal FICA amp FUTA
III State UI
IV State Spotlights CA CT NJ NY
V UI Legislation amp Enforcement
VI Tax Optimization Tips
Fun Gifts
Audience Questions
wwwemptechcom | 18005183874 | infoemptechcom
bull Company Structure
bull Payroll Structure
bull Employment Tax Structures
bull Employment Tax Challenges
Job Growth amp Unemployment
wwwemptechcom | 18005183874 | infoemptechcom
August 2015 ndash 51 Unemployment Rate
Source Bureau of Labor Statistics
FICA Overview
wwwemptechcom | 18005183874 | infoemptechcom
bull Federal Insurance Contributions Act (ldquoFICArdquo) codified under USC Title 26 Chap 21
bull Entire FICA remains 153 (SS tax 124 + Medicare 29) equally shared between Employer ldquoERrdquo and Employee ldquoEErdquo ERs must withhold additional 09 from EErsquos wages in excess of $200K (no ER matching contribution)
bull Supreme Court rules FICA tax due on severance pay
bull Social Security Wage Baseo 2015 = $118500 (max $7347 SS tax)o 2014 = $117000 (max $7254 SS tax)o 2013 = $113700 2012 = $110100
FICA ndash IRS Notice 2015-15
wwwemptechcom | 18005183874 | infoemptechcom
bull Potential change of FICA refund rules o EE consent used to support a claim for refund under
sect 6402 of IRC and sect 316402(a)-2 of ETR for overpaid taxes under FICA and RRTA
bull Proposedo EE consent must identify basis of the claim for refund
and be signed under penalties of perjuryo Defines ldquoreasonable effortsrdquoo Would permit but not require EE consent to be
requested furnished retained electronically
bull IRS currently evaluating position
FICA Changes ndash APA
wwwemptechcom | 18005183874 | infoemptechcom
APA response to IRS on the FICA
- affirming all except certain ER-side only filings
FUTA Overview
wwwemptechcom | 18005183874 | infoemptechcom
bull Federal Unemployment Tax (FUTA) designed to help fund UI Admin ndash codified under USC Title 26 Chap 32
bull 6 rate with fixed $7000 taxable wage base effective rate after applying 54 credit is 06
bull Due to state needs to borrow Title XII loans from Fed to fund their State UI programs many states triggered FUTA Credit Reductions ndash involuntary repayment
bull States with Title XII loans for 5 years trigger additional reduction via Benefit Cost Reduction (BCR) factor
State by State Trust Fund
wwwemptechcom | 18005183874 | infoemptechcom
Red = borrowing as of 8415 Brown = using ER-financed bonds to repay Title XII loansYellow = less than 6 mos of positive balances Green = more than 6 mos of benefits
State Trust Fund Solvency as of August 2015 Map taken from July 2015 SUCAP Report based on US DOL UI data quarterly summary charts amp SUCAP Reports
State Solvency Health Update
wwwemptechcom | 18005183874 | infoemptechcom
US DOL ETA UI Actuary Report (July 2015)
bull Projected 2015 FUTA Rates ndash ldquopotentialrdquo BCR add-ons for 8 states
bull State Trust Fund Solvency vs US DOL Guidelines ndash only 17 states meet guidelines
bull In 2010 $196B of $42B in state UI debt (466) was private market
bull By 2014 $892B of (then) total $23B (3878) was private market
bull In 2015 new federal standards eliminate interest free loans to states with outstanding debts
Obama FY 2016 Budget
wwwemptechcom | 18005183874 | infoemptechcom
The FY 2016 Budget Key Pointsbull Increase FUTA tax rate from 06 to 08 in CY 2016
(effectively increases base from $42 to $56 per EE for 2016 in all states - 3333 increase)
bull States would be required to increase unemployment tax bases from as little as $7000 to $40000 (471 increase) Forces states to dramatically cut contribution rates or pass astronomical UI tax increase to ERs
bull In 2017 States would be reqrsquod to have a min tax equiv to 0175 on a $40000 tax base ($70 per EE) that would increase indefinitely based on avg wage increases
UI Tax Rate Trends
wwwemptechcom | 18005183874 | infoemptechcom
but average taxable wage bases continue to increase (up over $17K in 2014)
Source DOL
FUTA Credit Reduction amp ldquoBCRrdquo
wwwemptechcom | 18005183874 | infoemptechcom
Potential 2015 FUTA Credit Reductions from US DOL (July 2015)
UTax
These states had Title XII advance balances on Jan 1 2015 and are potentially subject to a reduction in FUTA credit on their IRS Form 940 for 2015 if the outstanding advance is not repaid by Nov 10 2015
2015 Potential Applied ForCredit Reduction 2015 Potential 2015 Potential 2015 Potential Total FUTA Credit Reduction
State(1) Due to Outstanding Advance(2) 27 add-on (3) BCR add-on(4) Credit Reduction(5) Relief (6)
California 15 00 14 29 BCR WaiverConnecticut 15 00 06 21Indiana 18 00 09 27 BCR WaiverKentucky 15 00 06 21 BCR Waiver FUTA CapNew York 15 00 00 15North Carolina 15 00 08 23Ohio 15 00 11 26 BCR WaiverSouth Carolina 18 00 03 21Virgin Islands 15 00 16 31 BCR Waiver
(1) These states have passed at least two consecutive January 1s with an outstanding Federal advance and are therefore subject to a FUTA credit reduction
(2) For each Jan 1 a state passes with an outstanding advance following the second one ERs in the state are subject to an additional 03 reduction in FUTA credit
(3) Following their third Jan 1 with an outstanding advance states are subject to an additional FUTA credit reduction called the 27 Add-on A description of this add-on is in FUTA 3302(c)(2)(B)
(4) These states are also potentially subject to the Benefit Cost Rate (BCR) additional credit reduction formula for having passed five consecutive Jan 1s with an outstanding Federal advance- FUTA section 3302 (c) (2)
(5) The FUTA credit reduction for 2015 is calculated by adding the credit reduction due to having an outstanding advance plus the reduction from the 27 add-on or the BCR add-on which if it is zero is replaced by the 27 add-on
(6) A state may apply for relief from a reduction in its FUTA credit under section FUTA 3302 The deadline for application of relief for all types was July 1 2015
(7) Final determination of the FUTA credit reduction will not be made until following the Nov 10 2015 repayment deadline
UI Tax Rate Determination
wwwemptechcom | 18005183874 | infoemptechcom
bull Primary Determination methodso Reserve Ratio (UI reserve balance avg taxable payroll)o Benefit Ratio (UI benefit charges taxable payroll)
bull New Employer UI Rate
bull Min ndash Max UI rateso Max UI rate no less than 54
bull SuccessionbullUI Transfer of Experience
bullState Rate Schedule adjustmentso Varies by overall UI trust fund balance
bull UI Voluntary Contributions
The Empire State (NY) UI Overview
wwwemptechcom | 18005183874 | infoemptechcom
bull Unemployment Rate (July 2015) 55
bull Trust Fund Positive Balance (July 2015) $8074000
bull rsquo15 Taxable Wage Base $10500 (and rising)
bull lsquo15 UI Tax Rates 21 min ndash 99 maxo 41 New ER UI
bull Paid back Title XII Federal UI loans
bull lsquo15 MinMax Weekly Benefit $100$420 (and rising)
bull State Information Data Exchange System (ldquoSIDESrdquo) UP
bull Voluntary Contribution state
The Garden State (NJ) UI Overview
wwwemptechcom | 18005183874 | infoemptechcom
bull Unemployment Rate (July 2015) 61
bull Trust Fund Positive Balance (July 2015) $255988000
bull lsquo15 Taxable Wage Base $32000
bull FY16 UI Tax Rates 12 min ndash 7 maxo New ER UI rate 34
bull lsquo15 Min Max Weekly Benefit $99-646
bull Voluntary Contribution state
The Garden State (NJ) UI Updates
wwwemptechcom | 18005183874 | infoemptechcom
Signed legislation 2014 thru July 2015
bull NJ AB3812 - requires electronic notification of death record to Dept to reduce UI fraud
bull NJ AB4189 - modifies short-time unemployment benefit lawbull NJ SB3097 - permits employee leasing companies to use ELC
experience rate or that of member companiesbull NJ SB1622 - withholding of state payments to vendors for delinquent
UI and disability taxesbull NJ SB2414 - amends DOLWD personnel access to UI claims receipt
and processing systembull NJ SB2082 - amends UI eligibility when claimant leaves work amp
subsequently laid off from work
The Constitution State (CT) UI Overview
wwwemptechcom | 18005183874 | infoemptechcom
bull Unemployment Rate (July 2015) 57
bull Trust Fund Loan Balance (Sept 2015) -$102M
bull rsquo15 Taxable Wage Base $15000
bull lsquo15 Tax Rates 19 min ndash 68 maxo New ER UI Rate 49
bull lsquo15 Potential FUTA Tax rate 21o 15 Basic FCR + 06 BCR add-ono Potential total FUTA cost per EE $189
bull rsquo15 MinMax Weekly Benefit $15 - 669
The Constitution State (CT) UI Updates
wwwemptechcom | 18005183874 | infoemptechcom
bullCT HB6707 Signed by Governor 7215 prevents ERrsquos base period account from being charged for unemployment benefits if claimant has been discharged or suspended because claimant lost their operatorrsquos license as a result of failing a drug alcohol test while off duty
bull CT is the only state subject to BCR add on (06) that has not applied for a waiver
o This is the second year CT has neglected to request a waiver
The Golden State (CA) UI Overview
wwwemptechcom | 18005183874 | infoemptechcom
bull Unemployment Rate (July 2015) 63
bull Trust Fund Loan Balance (Sept 2015) - $58B
bull lsquo15 Taxable Wage Base $7000
bull lsquo15 Tax Rates 15 min ndash 62 max o Schedule ldquoF+rdquo o 34 New ER rate
bull lsquo15 Potential FUTA Tax Rate 29o 15 Basic FCR + 14 BCR add ono $203 addtrsquol FUTA cost due to credit reduction and BCR
bull lsquo15 MinMax Weekly Benefit $40-450
The Golden State (CA) UI Updates
wwwemptechcom | 18005183874 | infoemptechcom
bull California is subject to the BCR add-on but has applied for a waivero Estimated BCR add on for 2015 is 14 o If the BCR waiver is approved the net cost is potentially $147 per
EE otherwise it could be $245 per EEo Final determination will be made by DOL after Nov 10 2015
bull Uber amp Lyft decisions on worker classification o EE vs independent contractor
bull UI appeals hearings ndash SB 1314 enacted extends deadline to file appeals
bull Administrative changes to law on UI Transfer of Experience when assets are acquired
bull SB 1131 enacted - members of LLC are not employees
The Buckeye State (OH) UI Overview
wwwemptechcom | 18005183874 | infoemptechcom
bull Unemployment Rate (July 2015) 5
bull Trust Fund Loan Balance (Sept 2015) - $875M
bull lsquo15 Taxable Wage Base $9000
bull lsquo15 Tax Rates 3 min ndash 108 max o New ER UI Tax Rate 27
bull lsquo15 Potential FUTA Tax Rate 26o 15 Basic FCR + 11 BCR add ono $182 addtrsquol FUTA cost due to credit reduction and BCR rsquo15
bull Voluntary Contribution state
Key Federal UI Legislation
wwwemptechcom | 18005183874 | infoemptechcom
bull 2004 SUTA Dumping Act
bull 2011 TAAE UI Integrity Act (Sec 252)
bull 2012 ATRAbull EE SS tax rate return to normal
Audience Questions
wwwemptechcom | 18005183874 | infoemptechcom
bull Changes in ET Structure
bull MampA Activity
2004 SUTA Dumping Prevention Act
wwwemptechcom | 18005183874 | infoemptechcom
bull SUTA Dumping (aka ldquounemployment tax avoidancerdquo) occurs by shifting EEs to a less-taxed entity to avoid paying a higher UI tax rate
bull Migration of EEs between legal entities (MampA consolidation etc) may trigger time-sensitive mandatory compliance reporting ndash misunderstood amp often missed
bull Penalties for missing or incorrect reporting can include max UI ratings civil ampor criminal penaltiesbull SUTA Dumping Detection Software for enforcement
bull Read Employerrsquos MampA ldquoTo Dordquo List
2011 Federal Act ndash UI Integrity
wwwemptechcom | 18005183874 | infoemptechcom
bull Follow on to 2009 Executive Order to reduce improper UI payments
bull Under UI Integrity rules states must not relieve employers of charges when they fail to respond timely or adequately to UI claims related agency requests bull Pattern of Failure as little as two instances
bull Employers cannot collude with employee to misuse unemployment claim system
bull Each state has unique rules method of enforcement being formulated
ldquoPattern of Failurerdquo Financial Impact Example
wwwemptechcom | 18005183874 | infoemptechcom
Case Study
bull ER With 100 SeparationsYr ldquoPattern of Failurerdquo classification bull Benefit$ paid to claimant prior to successful Appeal by ER
FACTORS FIGURESWeekly benefit amount Assume $300
Time to appeal 8 weeks
of claims lost on initial determination amp won by ER on Appeal
10 (out of 100 total separations)
Charge to ER UI account $24000 ($2400 x 10 claims) now NON-RECOVERABLE due to ldquoPattern of Failurerdquo
Additional Exposure Negative Impact bull May raise AUDIT RISK for other UI areas
bull May elevate ER experience rating
ldquoPattern of Failurerdquo Example Letter
wwwemptechcom | 18005183874 | infoemptechcom
Compliance amp Enforcement UI Integrity
wwwemptechcom | 18005183874 | infoemptechcom
bull Unemployment Claims ldquoTriggerrdquondash Claims filings from an EE associated with a MampA event may
trigger an ldquoevaluationrdquo of the succession reporting due to confusion surrounded which ER responsible for benefit charge
bull ldquoSDDSrdquo (SUTA Dumping Detection Software) ndash Many States using SDDS to ldquocatchrdquo EE migrations ndash Flags accounts for review to see if UI succession reporting
completed
bull ldquoQETPrdquo (Questionable Employment Tax Practices)ndash Under QETP IRS and 37 states sharing information and
specifically focusing on ET for auditsndash As of mid-2012 QETP has resulted in audits of 11000
employers
Audit Alert Inter-Agency Info Sharing
wwwemptechcom | 18005183874 | infoemptechcom
bull Questionable Employment Tax Practices ldquoQETPrdquo Initiativebull 37 States amp IRSbull 12000+ business examined thru lsquo12
bull Fed amp state info sharing data mining amp cross-agency task forces
bull Significant focus on worker classification
bull Significant incentives to states to aggressively audit
UI Tax Optimization Focus
wwwemptechcom | 18005183874 | infoemptechcom
bull UI Cost Control
bull UI Retrospective Review
UI Benefit Charges Material Expense
wwwemptechcom | 18005183874 | infoemptechcom
UTax
UI Integrity Oversight Plan
wwwemptechcom | 18005183874 | infoemptechcom
UTax
Designate a Person or Team
Total UI Claims (also by
statelocation)Which claims failed to be
timely adequate
Why Who
Track winloss for protests For
losses why WhoTrack winloss for
appeals Why Who
Impact on experience
rating Calculate cost
to organization
Find amp fix areas of organizational
weakness
UI Integrity Oversight Plan
wwwemptechcom | 18005183874 | infoemptechcom
UTax
ldquoACTrdquoProvide information to UI
agencies that isAccurateComplete
Timely
Best Practices
UI Claims Admin Reporting
wwwemptechcom | 18005183874 | infoemptechcom
ldquoFloat like a butterfly sting like a bee You cannot hit what you cannot seerdquo
Muhammad AliPeriodicReports
Separations
Claims
Win LoseBy Location
Liability Charges
Retro UI Review
wwwemptechcom | 18005183874 | infoemptechcom
General Evaluationbull Contact ALL UI jurisdictions
bull Perform account balancing (per state records) ndash QTR by QTR rearward review
bull Determine what credits found eligible for refund amp if debits found if correct
bull Research for any missing incomplete or untimely reporting on the account
bull Review all MampA past 3 years
bull Help reduce source of potential penalty or increased UI tax expense
Photo credit motone
UI Resources
wwwemptechcom | 18005183874 | infoemptechcom
bull 10 Questions for Internal SUTA Dumping Assessmentbull How Nonprofit Employers Can Reduce UI Costs bull FAQs on Employment Tax Compliance amp Savings in MampA
Go here to download three pages of UI Tips from Emptech
EmptechrsquosUI Tips
Download this one page checklist to assess the state of your UI Claims Administration
Is Your UCM
Broken
Get them here
Get our Top 15 Tips for MampA Tax Treatment
EmptechBlog
Go here to see the latest news on HR Payroll and Employment Tax topics
Thank You
wwwemptechcom | 18005183874 | infoemptechcom
Questions
Contact (203) 738-0545 rhendersonemptechcom
- Employment Tax Consulting- UI Claims Management- Credits- Talent Management- Electronic I-9- Verification of Employment
Emptech Solutions
wwwemptechcom | 18005183874 | infoemptechcom
Cloud-based HR Technology and Skilled Consulting
Compliance Efficiency amp Bottom Line Benefit
bull Applicant Tracking Systembull Efficient Onboarding amp HR ToolsTalent Management
bull Integrated E-Verifybull Easy-to-use High Compliance PlatformElectronic I-9
bull Verification of Income amp Employmentbull Employee satisfaction with 247 serviceIncome Verification
bull Claims administration amp appeals representationbull UI Cost Control
UI Claims Management
bull Hiring Based Credits WOTCbull Retrospective Research and $$$ Refund RecoveryCredits amp Refunds
bull Mergers amp Acquisition Employment Taxbull Compliance amp Tax $avingsTax Consulting
Agenda
wwwemptechcom | 18005183874 | infoemptechcom
I Macro Economic Overview
II Federal FICA amp FUTA
III State UI
IV State Spotlights CA CT NJ NY
V UI Legislation amp Enforcement
VI Tax Optimization Tips
Fun Gifts
Audience Questions
wwwemptechcom | 18005183874 | infoemptechcom
bull Company Structure
bull Payroll Structure
bull Employment Tax Structures
bull Employment Tax Challenges
Job Growth amp Unemployment
wwwemptechcom | 18005183874 | infoemptechcom
August 2015 ndash 51 Unemployment Rate
Source Bureau of Labor Statistics
FICA Overview
wwwemptechcom | 18005183874 | infoemptechcom
bull Federal Insurance Contributions Act (ldquoFICArdquo) codified under USC Title 26 Chap 21
bull Entire FICA remains 153 (SS tax 124 + Medicare 29) equally shared between Employer ldquoERrdquo and Employee ldquoEErdquo ERs must withhold additional 09 from EErsquos wages in excess of $200K (no ER matching contribution)
bull Supreme Court rules FICA tax due on severance pay
bull Social Security Wage Baseo 2015 = $118500 (max $7347 SS tax)o 2014 = $117000 (max $7254 SS tax)o 2013 = $113700 2012 = $110100
FICA ndash IRS Notice 2015-15
wwwemptechcom | 18005183874 | infoemptechcom
bull Potential change of FICA refund rules o EE consent used to support a claim for refund under
sect 6402 of IRC and sect 316402(a)-2 of ETR for overpaid taxes under FICA and RRTA
bull Proposedo EE consent must identify basis of the claim for refund
and be signed under penalties of perjuryo Defines ldquoreasonable effortsrdquoo Would permit but not require EE consent to be
requested furnished retained electronically
bull IRS currently evaluating position
FICA Changes ndash APA
wwwemptechcom | 18005183874 | infoemptechcom
APA response to IRS on the FICA
- affirming all except certain ER-side only filings
FUTA Overview
wwwemptechcom | 18005183874 | infoemptechcom
bull Federal Unemployment Tax (FUTA) designed to help fund UI Admin ndash codified under USC Title 26 Chap 32
bull 6 rate with fixed $7000 taxable wage base effective rate after applying 54 credit is 06
bull Due to state needs to borrow Title XII loans from Fed to fund their State UI programs many states triggered FUTA Credit Reductions ndash involuntary repayment
bull States with Title XII loans for 5 years trigger additional reduction via Benefit Cost Reduction (BCR) factor
State by State Trust Fund
wwwemptechcom | 18005183874 | infoemptechcom
Red = borrowing as of 8415 Brown = using ER-financed bonds to repay Title XII loansYellow = less than 6 mos of positive balances Green = more than 6 mos of benefits
State Trust Fund Solvency as of August 2015 Map taken from July 2015 SUCAP Report based on US DOL UI data quarterly summary charts amp SUCAP Reports
State Solvency Health Update
wwwemptechcom | 18005183874 | infoemptechcom
US DOL ETA UI Actuary Report (July 2015)
bull Projected 2015 FUTA Rates ndash ldquopotentialrdquo BCR add-ons for 8 states
bull State Trust Fund Solvency vs US DOL Guidelines ndash only 17 states meet guidelines
bull In 2010 $196B of $42B in state UI debt (466) was private market
bull By 2014 $892B of (then) total $23B (3878) was private market
bull In 2015 new federal standards eliminate interest free loans to states with outstanding debts
Obama FY 2016 Budget
wwwemptechcom | 18005183874 | infoemptechcom
The FY 2016 Budget Key Pointsbull Increase FUTA tax rate from 06 to 08 in CY 2016
(effectively increases base from $42 to $56 per EE for 2016 in all states - 3333 increase)
bull States would be required to increase unemployment tax bases from as little as $7000 to $40000 (471 increase) Forces states to dramatically cut contribution rates or pass astronomical UI tax increase to ERs
bull In 2017 States would be reqrsquod to have a min tax equiv to 0175 on a $40000 tax base ($70 per EE) that would increase indefinitely based on avg wage increases
UI Tax Rate Trends
wwwemptechcom | 18005183874 | infoemptechcom
but average taxable wage bases continue to increase (up over $17K in 2014)
Source DOL
FUTA Credit Reduction amp ldquoBCRrdquo
wwwemptechcom | 18005183874 | infoemptechcom
Potential 2015 FUTA Credit Reductions from US DOL (July 2015)
UTax
These states had Title XII advance balances on Jan 1 2015 and are potentially subject to a reduction in FUTA credit on their IRS Form 940 for 2015 if the outstanding advance is not repaid by Nov 10 2015
2015 Potential Applied ForCredit Reduction 2015 Potential 2015 Potential 2015 Potential Total FUTA Credit Reduction
State(1) Due to Outstanding Advance(2) 27 add-on (3) BCR add-on(4) Credit Reduction(5) Relief (6)
California 15 00 14 29 BCR WaiverConnecticut 15 00 06 21Indiana 18 00 09 27 BCR WaiverKentucky 15 00 06 21 BCR Waiver FUTA CapNew York 15 00 00 15North Carolina 15 00 08 23Ohio 15 00 11 26 BCR WaiverSouth Carolina 18 00 03 21Virgin Islands 15 00 16 31 BCR Waiver
(1) These states have passed at least two consecutive January 1s with an outstanding Federal advance and are therefore subject to a FUTA credit reduction
(2) For each Jan 1 a state passes with an outstanding advance following the second one ERs in the state are subject to an additional 03 reduction in FUTA credit
(3) Following their third Jan 1 with an outstanding advance states are subject to an additional FUTA credit reduction called the 27 Add-on A description of this add-on is in FUTA 3302(c)(2)(B)
(4) These states are also potentially subject to the Benefit Cost Rate (BCR) additional credit reduction formula for having passed five consecutive Jan 1s with an outstanding Federal advance- FUTA section 3302 (c) (2)
(5) The FUTA credit reduction for 2015 is calculated by adding the credit reduction due to having an outstanding advance plus the reduction from the 27 add-on or the BCR add-on which if it is zero is replaced by the 27 add-on
(6) A state may apply for relief from a reduction in its FUTA credit under section FUTA 3302 The deadline for application of relief for all types was July 1 2015
(7) Final determination of the FUTA credit reduction will not be made until following the Nov 10 2015 repayment deadline
UI Tax Rate Determination
wwwemptechcom | 18005183874 | infoemptechcom
bull Primary Determination methodso Reserve Ratio (UI reserve balance avg taxable payroll)o Benefit Ratio (UI benefit charges taxable payroll)
bull New Employer UI Rate
bull Min ndash Max UI rateso Max UI rate no less than 54
bull SuccessionbullUI Transfer of Experience
bullState Rate Schedule adjustmentso Varies by overall UI trust fund balance
bull UI Voluntary Contributions
The Empire State (NY) UI Overview
wwwemptechcom | 18005183874 | infoemptechcom
bull Unemployment Rate (July 2015) 55
bull Trust Fund Positive Balance (July 2015) $8074000
bull rsquo15 Taxable Wage Base $10500 (and rising)
bull lsquo15 UI Tax Rates 21 min ndash 99 maxo 41 New ER UI
bull Paid back Title XII Federal UI loans
bull lsquo15 MinMax Weekly Benefit $100$420 (and rising)
bull State Information Data Exchange System (ldquoSIDESrdquo) UP
bull Voluntary Contribution state
The Garden State (NJ) UI Overview
wwwemptechcom | 18005183874 | infoemptechcom
bull Unemployment Rate (July 2015) 61
bull Trust Fund Positive Balance (July 2015) $255988000
bull lsquo15 Taxable Wage Base $32000
bull FY16 UI Tax Rates 12 min ndash 7 maxo New ER UI rate 34
bull lsquo15 Min Max Weekly Benefit $99-646
bull Voluntary Contribution state
The Garden State (NJ) UI Updates
wwwemptechcom | 18005183874 | infoemptechcom
Signed legislation 2014 thru July 2015
bull NJ AB3812 - requires electronic notification of death record to Dept to reduce UI fraud
bull NJ AB4189 - modifies short-time unemployment benefit lawbull NJ SB3097 - permits employee leasing companies to use ELC
experience rate or that of member companiesbull NJ SB1622 - withholding of state payments to vendors for delinquent
UI and disability taxesbull NJ SB2414 - amends DOLWD personnel access to UI claims receipt
and processing systembull NJ SB2082 - amends UI eligibility when claimant leaves work amp
subsequently laid off from work
The Constitution State (CT) UI Overview
wwwemptechcom | 18005183874 | infoemptechcom
bull Unemployment Rate (July 2015) 57
bull Trust Fund Loan Balance (Sept 2015) -$102M
bull rsquo15 Taxable Wage Base $15000
bull lsquo15 Tax Rates 19 min ndash 68 maxo New ER UI Rate 49
bull lsquo15 Potential FUTA Tax rate 21o 15 Basic FCR + 06 BCR add-ono Potential total FUTA cost per EE $189
bull rsquo15 MinMax Weekly Benefit $15 - 669
The Constitution State (CT) UI Updates
wwwemptechcom | 18005183874 | infoemptechcom
bullCT HB6707 Signed by Governor 7215 prevents ERrsquos base period account from being charged for unemployment benefits if claimant has been discharged or suspended because claimant lost their operatorrsquos license as a result of failing a drug alcohol test while off duty
bull CT is the only state subject to BCR add on (06) that has not applied for a waiver
o This is the second year CT has neglected to request a waiver
The Golden State (CA) UI Overview
wwwemptechcom | 18005183874 | infoemptechcom
bull Unemployment Rate (July 2015) 63
bull Trust Fund Loan Balance (Sept 2015) - $58B
bull lsquo15 Taxable Wage Base $7000
bull lsquo15 Tax Rates 15 min ndash 62 max o Schedule ldquoF+rdquo o 34 New ER rate
bull lsquo15 Potential FUTA Tax Rate 29o 15 Basic FCR + 14 BCR add ono $203 addtrsquol FUTA cost due to credit reduction and BCR
bull lsquo15 MinMax Weekly Benefit $40-450
The Golden State (CA) UI Updates
wwwemptechcom | 18005183874 | infoemptechcom
bull California is subject to the BCR add-on but has applied for a waivero Estimated BCR add on for 2015 is 14 o If the BCR waiver is approved the net cost is potentially $147 per
EE otherwise it could be $245 per EEo Final determination will be made by DOL after Nov 10 2015
bull Uber amp Lyft decisions on worker classification o EE vs independent contractor
bull UI appeals hearings ndash SB 1314 enacted extends deadline to file appeals
bull Administrative changes to law on UI Transfer of Experience when assets are acquired
bull SB 1131 enacted - members of LLC are not employees
The Buckeye State (OH) UI Overview
wwwemptechcom | 18005183874 | infoemptechcom
bull Unemployment Rate (July 2015) 5
bull Trust Fund Loan Balance (Sept 2015) - $875M
bull lsquo15 Taxable Wage Base $9000
bull lsquo15 Tax Rates 3 min ndash 108 max o New ER UI Tax Rate 27
bull lsquo15 Potential FUTA Tax Rate 26o 15 Basic FCR + 11 BCR add ono $182 addtrsquol FUTA cost due to credit reduction and BCR rsquo15
bull Voluntary Contribution state
Key Federal UI Legislation
wwwemptechcom | 18005183874 | infoemptechcom
bull 2004 SUTA Dumping Act
bull 2011 TAAE UI Integrity Act (Sec 252)
bull 2012 ATRAbull EE SS tax rate return to normal
Audience Questions
wwwemptechcom | 18005183874 | infoemptechcom
bull Changes in ET Structure
bull MampA Activity
2004 SUTA Dumping Prevention Act
wwwemptechcom | 18005183874 | infoemptechcom
bull SUTA Dumping (aka ldquounemployment tax avoidancerdquo) occurs by shifting EEs to a less-taxed entity to avoid paying a higher UI tax rate
bull Migration of EEs between legal entities (MampA consolidation etc) may trigger time-sensitive mandatory compliance reporting ndash misunderstood amp often missed
bull Penalties for missing or incorrect reporting can include max UI ratings civil ampor criminal penaltiesbull SUTA Dumping Detection Software for enforcement
bull Read Employerrsquos MampA ldquoTo Dordquo List
2011 Federal Act ndash UI Integrity
wwwemptechcom | 18005183874 | infoemptechcom
bull Follow on to 2009 Executive Order to reduce improper UI payments
bull Under UI Integrity rules states must not relieve employers of charges when they fail to respond timely or adequately to UI claims related agency requests bull Pattern of Failure as little as two instances
bull Employers cannot collude with employee to misuse unemployment claim system
bull Each state has unique rules method of enforcement being formulated
ldquoPattern of Failurerdquo Financial Impact Example
wwwemptechcom | 18005183874 | infoemptechcom
Case Study
bull ER With 100 SeparationsYr ldquoPattern of Failurerdquo classification bull Benefit$ paid to claimant prior to successful Appeal by ER
FACTORS FIGURESWeekly benefit amount Assume $300
Time to appeal 8 weeks
of claims lost on initial determination amp won by ER on Appeal
10 (out of 100 total separations)
Charge to ER UI account $24000 ($2400 x 10 claims) now NON-RECOVERABLE due to ldquoPattern of Failurerdquo
Additional Exposure Negative Impact bull May raise AUDIT RISK for other UI areas
bull May elevate ER experience rating
ldquoPattern of Failurerdquo Example Letter
wwwemptechcom | 18005183874 | infoemptechcom
Compliance amp Enforcement UI Integrity
wwwemptechcom | 18005183874 | infoemptechcom
bull Unemployment Claims ldquoTriggerrdquondash Claims filings from an EE associated with a MampA event may
trigger an ldquoevaluationrdquo of the succession reporting due to confusion surrounded which ER responsible for benefit charge
bull ldquoSDDSrdquo (SUTA Dumping Detection Software) ndash Many States using SDDS to ldquocatchrdquo EE migrations ndash Flags accounts for review to see if UI succession reporting
completed
bull ldquoQETPrdquo (Questionable Employment Tax Practices)ndash Under QETP IRS and 37 states sharing information and
specifically focusing on ET for auditsndash As of mid-2012 QETP has resulted in audits of 11000
employers
Audit Alert Inter-Agency Info Sharing
wwwemptechcom | 18005183874 | infoemptechcom
bull Questionable Employment Tax Practices ldquoQETPrdquo Initiativebull 37 States amp IRSbull 12000+ business examined thru lsquo12
bull Fed amp state info sharing data mining amp cross-agency task forces
bull Significant focus on worker classification
bull Significant incentives to states to aggressively audit
UI Tax Optimization Focus
wwwemptechcom | 18005183874 | infoemptechcom
bull UI Cost Control
bull UI Retrospective Review
UI Benefit Charges Material Expense
wwwemptechcom | 18005183874 | infoemptechcom
UTax
UI Integrity Oversight Plan
wwwemptechcom | 18005183874 | infoemptechcom
UTax
Designate a Person or Team
Total UI Claims (also by
statelocation)Which claims failed to be
timely adequate
Why Who
Track winloss for protests For
losses why WhoTrack winloss for
appeals Why Who
Impact on experience
rating Calculate cost
to organization
Find amp fix areas of organizational
weakness
UI Integrity Oversight Plan
wwwemptechcom | 18005183874 | infoemptechcom
UTax
ldquoACTrdquoProvide information to UI
agencies that isAccurateComplete
Timely
Best Practices
UI Claims Admin Reporting
wwwemptechcom | 18005183874 | infoemptechcom
ldquoFloat like a butterfly sting like a bee You cannot hit what you cannot seerdquo
Muhammad AliPeriodicReports
Separations
Claims
Win LoseBy Location
Liability Charges
Retro UI Review
wwwemptechcom | 18005183874 | infoemptechcom
General Evaluationbull Contact ALL UI jurisdictions
bull Perform account balancing (per state records) ndash QTR by QTR rearward review
bull Determine what credits found eligible for refund amp if debits found if correct
bull Research for any missing incomplete or untimely reporting on the account
bull Review all MampA past 3 years
bull Help reduce source of potential penalty or increased UI tax expense
Photo credit motone
UI Resources
wwwemptechcom | 18005183874 | infoemptechcom
bull 10 Questions for Internal SUTA Dumping Assessmentbull How Nonprofit Employers Can Reduce UI Costs bull FAQs on Employment Tax Compliance amp Savings in MampA
Go here to download three pages of UI Tips from Emptech
EmptechrsquosUI Tips
Download this one page checklist to assess the state of your UI Claims Administration
Is Your UCM
Broken
Get them here
Get our Top 15 Tips for MampA Tax Treatment
EmptechBlog
Go here to see the latest news on HR Payroll and Employment Tax topics
Thank You
wwwemptechcom | 18005183874 | infoemptechcom
Questions
Contact (203) 738-0545 rhendersonemptechcom
- Employment Tax Consulting- UI Claims Management- Credits- Talent Management- Electronic I-9- Verification of Employment
Agenda
wwwemptechcom | 18005183874 | infoemptechcom
I Macro Economic Overview
II Federal FICA amp FUTA
III State UI
IV State Spotlights CA CT NJ NY
V UI Legislation amp Enforcement
VI Tax Optimization Tips
Fun Gifts
Audience Questions
wwwemptechcom | 18005183874 | infoemptechcom
bull Company Structure
bull Payroll Structure
bull Employment Tax Structures
bull Employment Tax Challenges
Job Growth amp Unemployment
wwwemptechcom | 18005183874 | infoemptechcom
August 2015 ndash 51 Unemployment Rate
Source Bureau of Labor Statistics
FICA Overview
wwwemptechcom | 18005183874 | infoemptechcom
bull Federal Insurance Contributions Act (ldquoFICArdquo) codified under USC Title 26 Chap 21
bull Entire FICA remains 153 (SS tax 124 + Medicare 29) equally shared between Employer ldquoERrdquo and Employee ldquoEErdquo ERs must withhold additional 09 from EErsquos wages in excess of $200K (no ER matching contribution)
bull Supreme Court rules FICA tax due on severance pay
bull Social Security Wage Baseo 2015 = $118500 (max $7347 SS tax)o 2014 = $117000 (max $7254 SS tax)o 2013 = $113700 2012 = $110100
FICA ndash IRS Notice 2015-15
wwwemptechcom | 18005183874 | infoemptechcom
bull Potential change of FICA refund rules o EE consent used to support a claim for refund under
sect 6402 of IRC and sect 316402(a)-2 of ETR for overpaid taxes under FICA and RRTA
bull Proposedo EE consent must identify basis of the claim for refund
and be signed under penalties of perjuryo Defines ldquoreasonable effortsrdquoo Would permit but not require EE consent to be
requested furnished retained electronically
bull IRS currently evaluating position
FICA Changes ndash APA
wwwemptechcom | 18005183874 | infoemptechcom
APA response to IRS on the FICA
- affirming all except certain ER-side only filings
FUTA Overview
wwwemptechcom | 18005183874 | infoemptechcom
bull Federal Unemployment Tax (FUTA) designed to help fund UI Admin ndash codified under USC Title 26 Chap 32
bull 6 rate with fixed $7000 taxable wage base effective rate after applying 54 credit is 06
bull Due to state needs to borrow Title XII loans from Fed to fund their State UI programs many states triggered FUTA Credit Reductions ndash involuntary repayment
bull States with Title XII loans for 5 years trigger additional reduction via Benefit Cost Reduction (BCR) factor
State by State Trust Fund
wwwemptechcom | 18005183874 | infoemptechcom
Red = borrowing as of 8415 Brown = using ER-financed bonds to repay Title XII loansYellow = less than 6 mos of positive balances Green = more than 6 mos of benefits
State Trust Fund Solvency as of August 2015 Map taken from July 2015 SUCAP Report based on US DOL UI data quarterly summary charts amp SUCAP Reports
State Solvency Health Update
wwwemptechcom | 18005183874 | infoemptechcom
US DOL ETA UI Actuary Report (July 2015)
bull Projected 2015 FUTA Rates ndash ldquopotentialrdquo BCR add-ons for 8 states
bull State Trust Fund Solvency vs US DOL Guidelines ndash only 17 states meet guidelines
bull In 2010 $196B of $42B in state UI debt (466) was private market
bull By 2014 $892B of (then) total $23B (3878) was private market
bull In 2015 new federal standards eliminate interest free loans to states with outstanding debts
Obama FY 2016 Budget
wwwemptechcom | 18005183874 | infoemptechcom
The FY 2016 Budget Key Pointsbull Increase FUTA tax rate from 06 to 08 in CY 2016
(effectively increases base from $42 to $56 per EE for 2016 in all states - 3333 increase)
bull States would be required to increase unemployment tax bases from as little as $7000 to $40000 (471 increase) Forces states to dramatically cut contribution rates or pass astronomical UI tax increase to ERs
bull In 2017 States would be reqrsquod to have a min tax equiv to 0175 on a $40000 tax base ($70 per EE) that would increase indefinitely based on avg wage increases
UI Tax Rate Trends
wwwemptechcom | 18005183874 | infoemptechcom
but average taxable wage bases continue to increase (up over $17K in 2014)
Source DOL
FUTA Credit Reduction amp ldquoBCRrdquo
wwwemptechcom | 18005183874 | infoemptechcom
Potential 2015 FUTA Credit Reductions from US DOL (July 2015)
UTax
These states had Title XII advance balances on Jan 1 2015 and are potentially subject to a reduction in FUTA credit on their IRS Form 940 for 2015 if the outstanding advance is not repaid by Nov 10 2015
2015 Potential Applied ForCredit Reduction 2015 Potential 2015 Potential 2015 Potential Total FUTA Credit Reduction
State(1) Due to Outstanding Advance(2) 27 add-on (3) BCR add-on(4) Credit Reduction(5) Relief (6)
California 15 00 14 29 BCR WaiverConnecticut 15 00 06 21Indiana 18 00 09 27 BCR WaiverKentucky 15 00 06 21 BCR Waiver FUTA CapNew York 15 00 00 15North Carolina 15 00 08 23Ohio 15 00 11 26 BCR WaiverSouth Carolina 18 00 03 21Virgin Islands 15 00 16 31 BCR Waiver
(1) These states have passed at least two consecutive January 1s with an outstanding Federal advance and are therefore subject to a FUTA credit reduction
(2) For each Jan 1 a state passes with an outstanding advance following the second one ERs in the state are subject to an additional 03 reduction in FUTA credit
(3) Following their third Jan 1 with an outstanding advance states are subject to an additional FUTA credit reduction called the 27 Add-on A description of this add-on is in FUTA 3302(c)(2)(B)
(4) These states are also potentially subject to the Benefit Cost Rate (BCR) additional credit reduction formula for having passed five consecutive Jan 1s with an outstanding Federal advance- FUTA section 3302 (c) (2)
(5) The FUTA credit reduction for 2015 is calculated by adding the credit reduction due to having an outstanding advance plus the reduction from the 27 add-on or the BCR add-on which if it is zero is replaced by the 27 add-on
(6) A state may apply for relief from a reduction in its FUTA credit under section FUTA 3302 The deadline for application of relief for all types was July 1 2015
(7) Final determination of the FUTA credit reduction will not be made until following the Nov 10 2015 repayment deadline
UI Tax Rate Determination
wwwemptechcom | 18005183874 | infoemptechcom
bull Primary Determination methodso Reserve Ratio (UI reserve balance avg taxable payroll)o Benefit Ratio (UI benefit charges taxable payroll)
bull New Employer UI Rate
bull Min ndash Max UI rateso Max UI rate no less than 54
bull SuccessionbullUI Transfer of Experience
bullState Rate Schedule adjustmentso Varies by overall UI trust fund balance
bull UI Voluntary Contributions
The Empire State (NY) UI Overview
wwwemptechcom | 18005183874 | infoemptechcom
bull Unemployment Rate (July 2015) 55
bull Trust Fund Positive Balance (July 2015) $8074000
bull rsquo15 Taxable Wage Base $10500 (and rising)
bull lsquo15 UI Tax Rates 21 min ndash 99 maxo 41 New ER UI
bull Paid back Title XII Federal UI loans
bull lsquo15 MinMax Weekly Benefit $100$420 (and rising)
bull State Information Data Exchange System (ldquoSIDESrdquo) UP
bull Voluntary Contribution state
The Garden State (NJ) UI Overview
wwwemptechcom | 18005183874 | infoemptechcom
bull Unemployment Rate (July 2015) 61
bull Trust Fund Positive Balance (July 2015) $255988000
bull lsquo15 Taxable Wage Base $32000
bull FY16 UI Tax Rates 12 min ndash 7 maxo New ER UI rate 34
bull lsquo15 Min Max Weekly Benefit $99-646
bull Voluntary Contribution state
The Garden State (NJ) UI Updates
wwwemptechcom | 18005183874 | infoemptechcom
Signed legislation 2014 thru July 2015
bull NJ AB3812 - requires electronic notification of death record to Dept to reduce UI fraud
bull NJ AB4189 - modifies short-time unemployment benefit lawbull NJ SB3097 - permits employee leasing companies to use ELC
experience rate or that of member companiesbull NJ SB1622 - withholding of state payments to vendors for delinquent
UI and disability taxesbull NJ SB2414 - amends DOLWD personnel access to UI claims receipt
and processing systembull NJ SB2082 - amends UI eligibility when claimant leaves work amp
subsequently laid off from work
The Constitution State (CT) UI Overview
wwwemptechcom | 18005183874 | infoemptechcom
bull Unemployment Rate (July 2015) 57
bull Trust Fund Loan Balance (Sept 2015) -$102M
bull rsquo15 Taxable Wage Base $15000
bull lsquo15 Tax Rates 19 min ndash 68 maxo New ER UI Rate 49
bull lsquo15 Potential FUTA Tax rate 21o 15 Basic FCR + 06 BCR add-ono Potential total FUTA cost per EE $189
bull rsquo15 MinMax Weekly Benefit $15 - 669
The Constitution State (CT) UI Updates
wwwemptechcom | 18005183874 | infoemptechcom
bullCT HB6707 Signed by Governor 7215 prevents ERrsquos base period account from being charged for unemployment benefits if claimant has been discharged or suspended because claimant lost their operatorrsquos license as a result of failing a drug alcohol test while off duty
bull CT is the only state subject to BCR add on (06) that has not applied for a waiver
o This is the second year CT has neglected to request a waiver
The Golden State (CA) UI Overview
wwwemptechcom | 18005183874 | infoemptechcom
bull Unemployment Rate (July 2015) 63
bull Trust Fund Loan Balance (Sept 2015) - $58B
bull lsquo15 Taxable Wage Base $7000
bull lsquo15 Tax Rates 15 min ndash 62 max o Schedule ldquoF+rdquo o 34 New ER rate
bull lsquo15 Potential FUTA Tax Rate 29o 15 Basic FCR + 14 BCR add ono $203 addtrsquol FUTA cost due to credit reduction and BCR
bull lsquo15 MinMax Weekly Benefit $40-450
The Golden State (CA) UI Updates
wwwemptechcom | 18005183874 | infoemptechcom
bull California is subject to the BCR add-on but has applied for a waivero Estimated BCR add on for 2015 is 14 o If the BCR waiver is approved the net cost is potentially $147 per
EE otherwise it could be $245 per EEo Final determination will be made by DOL after Nov 10 2015
bull Uber amp Lyft decisions on worker classification o EE vs independent contractor
bull UI appeals hearings ndash SB 1314 enacted extends deadline to file appeals
bull Administrative changes to law on UI Transfer of Experience when assets are acquired
bull SB 1131 enacted - members of LLC are not employees
The Buckeye State (OH) UI Overview
wwwemptechcom | 18005183874 | infoemptechcom
bull Unemployment Rate (July 2015) 5
bull Trust Fund Loan Balance (Sept 2015) - $875M
bull lsquo15 Taxable Wage Base $9000
bull lsquo15 Tax Rates 3 min ndash 108 max o New ER UI Tax Rate 27
bull lsquo15 Potential FUTA Tax Rate 26o 15 Basic FCR + 11 BCR add ono $182 addtrsquol FUTA cost due to credit reduction and BCR rsquo15
bull Voluntary Contribution state
Key Federal UI Legislation
wwwemptechcom | 18005183874 | infoemptechcom
bull 2004 SUTA Dumping Act
bull 2011 TAAE UI Integrity Act (Sec 252)
bull 2012 ATRAbull EE SS tax rate return to normal
Audience Questions
wwwemptechcom | 18005183874 | infoemptechcom
bull Changes in ET Structure
bull MampA Activity
2004 SUTA Dumping Prevention Act
wwwemptechcom | 18005183874 | infoemptechcom
bull SUTA Dumping (aka ldquounemployment tax avoidancerdquo) occurs by shifting EEs to a less-taxed entity to avoid paying a higher UI tax rate
bull Migration of EEs between legal entities (MampA consolidation etc) may trigger time-sensitive mandatory compliance reporting ndash misunderstood amp often missed
bull Penalties for missing or incorrect reporting can include max UI ratings civil ampor criminal penaltiesbull SUTA Dumping Detection Software for enforcement
bull Read Employerrsquos MampA ldquoTo Dordquo List
2011 Federal Act ndash UI Integrity
wwwemptechcom | 18005183874 | infoemptechcom
bull Follow on to 2009 Executive Order to reduce improper UI payments
bull Under UI Integrity rules states must not relieve employers of charges when they fail to respond timely or adequately to UI claims related agency requests bull Pattern of Failure as little as two instances
bull Employers cannot collude with employee to misuse unemployment claim system
bull Each state has unique rules method of enforcement being formulated
ldquoPattern of Failurerdquo Financial Impact Example
wwwemptechcom | 18005183874 | infoemptechcom
Case Study
bull ER With 100 SeparationsYr ldquoPattern of Failurerdquo classification bull Benefit$ paid to claimant prior to successful Appeal by ER
FACTORS FIGURESWeekly benefit amount Assume $300
Time to appeal 8 weeks
of claims lost on initial determination amp won by ER on Appeal
10 (out of 100 total separations)
Charge to ER UI account $24000 ($2400 x 10 claims) now NON-RECOVERABLE due to ldquoPattern of Failurerdquo
Additional Exposure Negative Impact bull May raise AUDIT RISK for other UI areas
bull May elevate ER experience rating
ldquoPattern of Failurerdquo Example Letter
wwwemptechcom | 18005183874 | infoemptechcom
Compliance amp Enforcement UI Integrity
wwwemptechcom | 18005183874 | infoemptechcom
bull Unemployment Claims ldquoTriggerrdquondash Claims filings from an EE associated with a MampA event may
trigger an ldquoevaluationrdquo of the succession reporting due to confusion surrounded which ER responsible for benefit charge
bull ldquoSDDSrdquo (SUTA Dumping Detection Software) ndash Many States using SDDS to ldquocatchrdquo EE migrations ndash Flags accounts for review to see if UI succession reporting
completed
bull ldquoQETPrdquo (Questionable Employment Tax Practices)ndash Under QETP IRS and 37 states sharing information and
specifically focusing on ET for auditsndash As of mid-2012 QETP has resulted in audits of 11000
employers
Audit Alert Inter-Agency Info Sharing
wwwemptechcom | 18005183874 | infoemptechcom
bull Questionable Employment Tax Practices ldquoQETPrdquo Initiativebull 37 States amp IRSbull 12000+ business examined thru lsquo12
bull Fed amp state info sharing data mining amp cross-agency task forces
bull Significant focus on worker classification
bull Significant incentives to states to aggressively audit
UI Tax Optimization Focus
wwwemptechcom | 18005183874 | infoemptechcom
bull UI Cost Control
bull UI Retrospective Review
UI Benefit Charges Material Expense
wwwemptechcom | 18005183874 | infoemptechcom
UTax
UI Integrity Oversight Plan
wwwemptechcom | 18005183874 | infoemptechcom
UTax
Designate a Person or Team
Total UI Claims (also by
statelocation)Which claims failed to be
timely adequate
Why Who
Track winloss for protests For
losses why WhoTrack winloss for
appeals Why Who
Impact on experience
rating Calculate cost
to organization
Find amp fix areas of organizational
weakness
UI Integrity Oversight Plan
wwwemptechcom | 18005183874 | infoemptechcom
UTax
ldquoACTrdquoProvide information to UI
agencies that isAccurateComplete
Timely
Best Practices
UI Claims Admin Reporting
wwwemptechcom | 18005183874 | infoemptechcom
ldquoFloat like a butterfly sting like a bee You cannot hit what you cannot seerdquo
Muhammad AliPeriodicReports
Separations
Claims
Win LoseBy Location
Liability Charges
Retro UI Review
wwwemptechcom | 18005183874 | infoemptechcom
General Evaluationbull Contact ALL UI jurisdictions
bull Perform account balancing (per state records) ndash QTR by QTR rearward review
bull Determine what credits found eligible for refund amp if debits found if correct
bull Research for any missing incomplete or untimely reporting on the account
bull Review all MampA past 3 years
bull Help reduce source of potential penalty or increased UI tax expense
Photo credit motone
UI Resources
wwwemptechcom | 18005183874 | infoemptechcom
bull 10 Questions for Internal SUTA Dumping Assessmentbull How Nonprofit Employers Can Reduce UI Costs bull FAQs on Employment Tax Compliance amp Savings in MampA
Go here to download three pages of UI Tips from Emptech
EmptechrsquosUI Tips
Download this one page checklist to assess the state of your UI Claims Administration
Is Your UCM
Broken
Get them here
Get our Top 15 Tips for MampA Tax Treatment
EmptechBlog
Go here to see the latest news on HR Payroll and Employment Tax topics
Thank You
wwwemptechcom | 18005183874 | infoemptechcom
Questions
Contact (203) 738-0545 rhendersonemptechcom
- Employment Tax Consulting- UI Claims Management- Credits- Talent Management- Electronic I-9- Verification of Employment
Audience Questions
wwwemptechcom | 18005183874 | infoemptechcom
bull Company Structure
bull Payroll Structure
bull Employment Tax Structures
bull Employment Tax Challenges
Job Growth amp Unemployment
wwwemptechcom | 18005183874 | infoemptechcom
August 2015 ndash 51 Unemployment Rate
Source Bureau of Labor Statistics
FICA Overview
wwwemptechcom | 18005183874 | infoemptechcom
bull Federal Insurance Contributions Act (ldquoFICArdquo) codified under USC Title 26 Chap 21
bull Entire FICA remains 153 (SS tax 124 + Medicare 29) equally shared between Employer ldquoERrdquo and Employee ldquoEErdquo ERs must withhold additional 09 from EErsquos wages in excess of $200K (no ER matching contribution)
bull Supreme Court rules FICA tax due on severance pay
bull Social Security Wage Baseo 2015 = $118500 (max $7347 SS tax)o 2014 = $117000 (max $7254 SS tax)o 2013 = $113700 2012 = $110100
FICA ndash IRS Notice 2015-15
wwwemptechcom | 18005183874 | infoemptechcom
bull Potential change of FICA refund rules o EE consent used to support a claim for refund under
sect 6402 of IRC and sect 316402(a)-2 of ETR for overpaid taxes under FICA and RRTA
bull Proposedo EE consent must identify basis of the claim for refund
and be signed under penalties of perjuryo Defines ldquoreasonable effortsrdquoo Would permit but not require EE consent to be
requested furnished retained electronically
bull IRS currently evaluating position
FICA Changes ndash APA
wwwemptechcom | 18005183874 | infoemptechcom
APA response to IRS on the FICA
- affirming all except certain ER-side only filings
FUTA Overview
wwwemptechcom | 18005183874 | infoemptechcom
bull Federal Unemployment Tax (FUTA) designed to help fund UI Admin ndash codified under USC Title 26 Chap 32
bull 6 rate with fixed $7000 taxable wage base effective rate after applying 54 credit is 06
bull Due to state needs to borrow Title XII loans from Fed to fund their State UI programs many states triggered FUTA Credit Reductions ndash involuntary repayment
bull States with Title XII loans for 5 years trigger additional reduction via Benefit Cost Reduction (BCR) factor
State by State Trust Fund
wwwemptechcom | 18005183874 | infoemptechcom
Red = borrowing as of 8415 Brown = using ER-financed bonds to repay Title XII loansYellow = less than 6 mos of positive balances Green = more than 6 mos of benefits
State Trust Fund Solvency as of August 2015 Map taken from July 2015 SUCAP Report based on US DOL UI data quarterly summary charts amp SUCAP Reports
State Solvency Health Update
wwwemptechcom | 18005183874 | infoemptechcom
US DOL ETA UI Actuary Report (July 2015)
bull Projected 2015 FUTA Rates ndash ldquopotentialrdquo BCR add-ons for 8 states
bull State Trust Fund Solvency vs US DOL Guidelines ndash only 17 states meet guidelines
bull In 2010 $196B of $42B in state UI debt (466) was private market
bull By 2014 $892B of (then) total $23B (3878) was private market
bull In 2015 new federal standards eliminate interest free loans to states with outstanding debts
Obama FY 2016 Budget
wwwemptechcom | 18005183874 | infoemptechcom
The FY 2016 Budget Key Pointsbull Increase FUTA tax rate from 06 to 08 in CY 2016
(effectively increases base from $42 to $56 per EE for 2016 in all states - 3333 increase)
bull States would be required to increase unemployment tax bases from as little as $7000 to $40000 (471 increase) Forces states to dramatically cut contribution rates or pass astronomical UI tax increase to ERs
bull In 2017 States would be reqrsquod to have a min tax equiv to 0175 on a $40000 tax base ($70 per EE) that would increase indefinitely based on avg wage increases
UI Tax Rate Trends
wwwemptechcom | 18005183874 | infoemptechcom
but average taxable wage bases continue to increase (up over $17K in 2014)
Source DOL
FUTA Credit Reduction amp ldquoBCRrdquo
wwwemptechcom | 18005183874 | infoemptechcom
Potential 2015 FUTA Credit Reductions from US DOL (July 2015)
UTax
These states had Title XII advance balances on Jan 1 2015 and are potentially subject to a reduction in FUTA credit on their IRS Form 940 for 2015 if the outstanding advance is not repaid by Nov 10 2015
2015 Potential Applied ForCredit Reduction 2015 Potential 2015 Potential 2015 Potential Total FUTA Credit Reduction
State(1) Due to Outstanding Advance(2) 27 add-on (3) BCR add-on(4) Credit Reduction(5) Relief (6)
California 15 00 14 29 BCR WaiverConnecticut 15 00 06 21Indiana 18 00 09 27 BCR WaiverKentucky 15 00 06 21 BCR Waiver FUTA CapNew York 15 00 00 15North Carolina 15 00 08 23Ohio 15 00 11 26 BCR WaiverSouth Carolina 18 00 03 21Virgin Islands 15 00 16 31 BCR Waiver
(1) These states have passed at least two consecutive January 1s with an outstanding Federal advance and are therefore subject to a FUTA credit reduction
(2) For each Jan 1 a state passes with an outstanding advance following the second one ERs in the state are subject to an additional 03 reduction in FUTA credit
(3) Following their third Jan 1 with an outstanding advance states are subject to an additional FUTA credit reduction called the 27 Add-on A description of this add-on is in FUTA 3302(c)(2)(B)
(4) These states are also potentially subject to the Benefit Cost Rate (BCR) additional credit reduction formula for having passed five consecutive Jan 1s with an outstanding Federal advance- FUTA section 3302 (c) (2)
(5) The FUTA credit reduction for 2015 is calculated by adding the credit reduction due to having an outstanding advance plus the reduction from the 27 add-on or the BCR add-on which if it is zero is replaced by the 27 add-on
(6) A state may apply for relief from a reduction in its FUTA credit under section FUTA 3302 The deadline for application of relief for all types was July 1 2015
(7) Final determination of the FUTA credit reduction will not be made until following the Nov 10 2015 repayment deadline
UI Tax Rate Determination
wwwemptechcom | 18005183874 | infoemptechcom
bull Primary Determination methodso Reserve Ratio (UI reserve balance avg taxable payroll)o Benefit Ratio (UI benefit charges taxable payroll)
bull New Employer UI Rate
bull Min ndash Max UI rateso Max UI rate no less than 54
bull SuccessionbullUI Transfer of Experience
bullState Rate Schedule adjustmentso Varies by overall UI trust fund balance
bull UI Voluntary Contributions
The Empire State (NY) UI Overview
wwwemptechcom | 18005183874 | infoemptechcom
bull Unemployment Rate (July 2015) 55
bull Trust Fund Positive Balance (July 2015) $8074000
bull rsquo15 Taxable Wage Base $10500 (and rising)
bull lsquo15 UI Tax Rates 21 min ndash 99 maxo 41 New ER UI
bull Paid back Title XII Federal UI loans
bull lsquo15 MinMax Weekly Benefit $100$420 (and rising)
bull State Information Data Exchange System (ldquoSIDESrdquo) UP
bull Voluntary Contribution state
The Garden State (NJ) UI Overview
wwwemptechcom | 18005183874 | infoemptechcom
bull Unemployment Rate (July 2015) 61
bull Trust Fund Positive Balance (July 2015) $255988000
bull lsquo15 Taxable Wage Base $32000
bull FY16 UI Tax Rates 12 min ndash 7 maxo New ER UI rate 34
bull lsquo15 Min Max Weekly Benefit $99-646
bull Voluntary Contribution state
The Garden State (NJ) UI Updates
wwwemptechcom | 18005183874 | infoemptechcom
Signed legislation 2014 thru July 2015
bull NJ AB3812 - requires electronic notification of death record to Dept to reduce UI fraud
bull NJ AB4189 - modifies short-time unemployment benefit lawbull NJ SB3097 - permits employee leasing companies to use ELC
experience rate or that of member companiesbull NJ SB1622 - withholding of state payments to vendors for delinquent
UI and disability taxesbull NJ SB2414 - amends DOLWD personnel access to UI claims receipt
and processing systembull NJ SB2082 - amends UI eligibility when claimant leaves work amp
subsequently laid off from work
The Constitution State (CT) UI Overview
wwwemptechcom | 18005183874 | infoemptechcom
bull Unemployment Rate (July 2015) 57
bull Trust Fund Loan Balance (Sept 2015) -$102M
bull rsquo15 Taxable Wage Base $15000
bull lsquo15 Tax Rates 19 min ndash 68 maxo New ER UI Rate 49
bull lsquo15 Potential FUTA Tax rate 21o 15 Basic FCR + 06 BCR add-ono Potential total FUTA cost per EE $189
bull rsquo15 MinMax Weekly Benefit $15 - 669
The Constitution State (CT) UI Updates
wwwemptechcom | 18005183874 | infoemptechcom
bullCT HB6707 Signed by Governor 7215 prevents ERrsquos base period account from being charged for unemployment benefits if claimant has been discharged or suspended because claimant lost their operatorrsquos license as a result of failing a drug alcohol test while off duty
bull CT is the only state subject to BCR add on (06) that has not applied for a waiver
o This is the second year CT has neglected to request a waiver
The Golden State (CA) UI Overview
wwwemptechcom | 18005183874 | infoemptechcom
bull Unemployment Rate (July 2015) 63
bull Trust Fund Loan Balance (Sept 2015) - $58B
bull lsquo15 Taxable Wage Base $7000
bull lsquo15 Tax Rates 15 min ndash 62 max o Schedule ldquoF+rdquo o 34 New ER rate
bull lsquo15 Potential FUTA Tax Rate 29o 15 Basic FCR + 14 BCR add ono $203 addtrsquol FUTA cost due to credit reduction and BCR
bull lsquo15 MinMax Weekly Benefit $40-450
The Golden State (CA) UI Updates
wwwemptechcom | 18005183874 | infoemptechcom
bull California is subject to the BCR add-on but has applied for a waivero Estimated BCR add on for 2015 is 14 o If the BCR waiver is approved the net cost is potentially $147 per
EE otherwise it could be $245 per EEo Final determination will be made by DOL after Nov 10 2015
bull Uber amp Lyft decisions on worker classification o EE vs independent contractor
bull UI appeals hearings ndash SB 1314 enacted extends deadline to file appeals
bull Administrative changes to law on UI Transfer of Experience when assets are acquired
bull SB 1131 enacted - members of LLC are not employees
The Buckeye State (OH) UI Overview
wwwemptechcom | 18005183874 | infoemptechcom
bull Unemployment Rate (July 2015) 5
bull Trust Fund Loan Balance (Sept 2015) - $875M
bull lsquo15 Taxable Wage Base $9000
bull lsquo15 Tax Rates 3 min ndash 108 max o New ER UI Tax Rate 27
bull lsquo15 Potential FUTA Tax Rate 26o 15 Basic FCR + 11 BCR add ono $182 addtrsquol FUTA cost due to credit reduction and BCR rsquo15
bull Voluntary Contribution state
Key Federal UI Legislation
wwwemptechcom | 18005183874 | infoemptechcom
bull 2004 SUTA Dumping Act
bull 2011 TAAE UI Integrity Act (Sec 252)
bull 2012 ATRAbull EE SS tax rate return to normal
Audience Questions
wwwemptechcom | 18005183874 | infoemptechcom
bull Changes in ET Structure
bull MampA Activity
2004 SUTA Dumping Prevention Act
wwwemptechcom | 18005183874 | infoemptechcom
bull SUTA Dumping (aka ldquounemployment tax avoidancerdquo) occurs by shifting EEs to a less-taxed entity to avoid paying a higher UI tax rate
bull Migration of EEs between legal entities (MampA consolidation etc) may trigger time-sensitive mandatory compliance reporting ndash misunderstood amp often missed
bull Penalties for missing or incorrect reporting can include max UI ratings civil ampor criminal penaltiesbull SUTA Dumping Detection Software for enforcement
bull Read Employerrsquos MampA ldquoTo Dordquo List
2011 Federal Act ndash UI Integrity
wwwemptechcom | 18005183874 | infoemptechcom
bull Follow on to 2009 Executive Order to reduce improper UI payments
bull Under UI Integrity rules states must not relieve employers of charges when they fail to respond timely or adequately to UI claims related agency requests bull Pattern of Failure as little as two instances
bull Employers cannot collude with employee to misuse unemployment claim system
bull Each state has unique rules method of enforcement being formulated
ldquoPattern of Failurerdquo Financial Impact Example
wwwemptechcom | 18005183874 | infoemptechcom
Case Study
bull ER With 100 SeparationsYr ldquoPattern of Failurerdquo classification bull Benefit$ paid to claimant prior to successful Appeal by ER
FACTORS FIGURESWeekly benefit amount Assume $300
Time to appeal 8 weeks
of claims lost on initial determination amp won by ER on Appeal
10 (out of 100 total separations)
Charge to ER UI account $24000 ($2400 x 10 claims) now NON-RECOVERABLE due to ldquoPattern of Failurerdquo
Additional Exposure Negative Impact bull May raise AUDIT RISK for other UI areas
bull May elevate ER experience rating
ldquoPattern of Failurerdquo Example Letter
wwwemptechcom | 18005183874 | infoemptechcom
Compliance amp Enforcement UI Integrity
wwwemptechcom | 18005183874 | infoemptechcom
bull Unemployment Claims ldquoTriggerrdquondash Claims filings from an EE associated with a MampA event may
trigger an ldquoevaluationrdquo of the succession reporting due to confusion surrounded which ER responsible for benefit charge
bull ldquoSDDSrdquo (SUTA Dumping Detection Software) ndash Many States using SDDS to ldquocatchrdquo EE migrations ndash Flags accounts for review to see if UI succession reporting
completed
bull ldquoQETPrdquo (Questionable Employment Tax Practices)ndash Under QETP IRS and 37 states sharing information and
specifically focusing on ET for auditsndash As of mid-2012 QETP has resulted in audits of 11000
employers
Audit Alert Inter-Agency Info Sharing
wwwemptechcom | 18005183874 | infoemptechcom
bull Questionable Employment Tax Practices ldquoQETPrdquo Initiativebull 37 States amp IRSbull 12000+ business examined thru lsquo12
bull Fed amp state info sharing data mining amp cross-agency task forces
bull Significant focus on worker classification
bull Significant incentives to states to aggressively audit
UI Tax Optimization Focus
wwwemptechcom | 18005183874 | infoemptechcom
bull UI Cost Control
bull UI Retrospective Review
UI Benefit Charges Material Expense
wwwemptechcom | 18005183874 | infoemptechcom
UTax
UI Integrity Oversight Plan
wwwemptechcom | 18005183874 | infoemptechcom
UTax
Designate a Person or Team
Total UI Claims (also by
statelocation)Which claims failed to be
timely adequate
Why Who
Track winloss for protests For
losses why WhoTrack winloss for
appeals Why Who
Impact on experience
rating Calculate cost
to organization
Find amp fix areas of organizational
weakness
UI Integrity Oversight Plan
wwwemptechcom | 18005183874 | infoemptechcom
UTax
ldquoACTrdquoProvide information to UI
agencies that isAccurateComplete
Timely
Best Practices
UI Claims Admin Reporting
wwwemptechcom | 18005183874 | infoemptechcom
ldquoFloat like a butterfly sting like a bee You cannot hit what you cannot seerdquo
Muhammad AliPeriodicReports
Separations
Claims
Win LoseBy Location
Liability Charges
Retro UI Review
wwwemptechcom | 18005183874 | infoemptechcom
General Evaluationbull Contact ALL UI jurisdictions
bull Perform account balancing (per state records) ndash QTR by QTR rearward review
bull Determine what credits found eligible for refund amp if debits found if correct
bull Research for any missing incomplete or untimely reporting on the account
bull Review all MampA past 3 years
bull Help reduce source of potential penalty or increased UI tax expense
Photo credit motone
UI Resources
wwwemptechcom | 18005183874 | infoemptechcom
bull 10 Questions for Internal SUTA Dumping Assessmentbull How Nonprofit Employers Can Reduce UI Costs bull FAQs on Employment Tax Compliance amp Savings in MampA
Go here to download three pages of UI Tips from Emptech
EmptechrsquosUI Tips
Download this one page checklist to assess the state of your UI Claims Administration
Is Your UCM
Broken
Get them here
Get our Top 15 Tips for MampA Tax Treatment
EmptechBlog
Go here to see the latest news on HR Payroll and Employment Tax topics
Thank You
wwwemptechcom | 18005183874 | infoemptechcom
Questions
Contact (203) 738-0545 rhendersonemptechcom
- Employment Tax Consulting- UI Claims Management- Credits- Talent Management- Electronic I-9- Verification of Employment
Job Growth amp Unemployment
wwwemptechcom | 18005183874 | infoemptechcom
August 2015 ndash 51 Unemployment Rate
Source Bureau of Labor Statistics
FICA Overview
wwwemptechcom | 18005183874 | infoemptechcom
bull Federal Insurance Contributions Act (ldquoFICArdquo) codified under USC Title 26 Chap 21
bull Entire FICA remains 153 (SS tax 124 + Medicare 29) equally shared between Employer ldquoERrdquo and Employee ldquoEErdquo ERs must withhold additional 09 from EErsquos wages in excess of $200K (no ER matching contribution)
bull Supreme Court rules FICA tax due on severance pay
bull Social Security Wage Baseo 2015 = $118500 (max $7347 SS tax)o 2014 = $117000 (max $7254 SS tax)o 2013 = $113700 2012 = $110100
FICA ndash IRS Notice 2015-15
wwwemptechcom | 18005183874 | infoemptechcom
bull Potential change of FICA refund rules o EE consent used to support a claim for refund under
sect 6402 of IRC and sect 316402(a)-2 of ETR for overpaid taxes under FICA and RRTA
bull Proposedo EE consent must identify basis of the claim for refund
and be signed under penalties of perjuryo Defines ldquoreasonable effortsrdquoo Would permit but not require EE consent to be
requested furnished retained electronically
bull IRS currently evaluating position
FICA Changes ndash APA
wwwemptechcom | 18005183874 | infoemptechcom
APA response to IRS on the FICA
- affirming all except certain ER-side only filings
FUTA Overview
wwwemptechcom | 18005183874 | infoemptechcom
bull Federal Unemployment Tax (FUTA) designed to help fund UI Admin ndash codified under USC Title 26 Chap 32
bull 6 rate with fixed $7000 taxable wage base effective rate after applying 54 credit is 06
bull Due to state needs to borrow Title XII loans from Fed to fund their State UI programs many states triggered FUTA Credit Reductions ndash involuntary repayment
bull States with Title XII loans for 5 years trigger additional reduction via Benefit Cost Reduction (BCR) factor
State by State Trust Fund
wwwemptechcom | 18005183874 | infoemptechcom
Red = borrowing as of 8415 Brown = using ER-financed bonds to repay Title XII loansYellow = less than 6 mos of positive balances Green = more than 6 mos of benefits
State Trust Fund Solvency as of August 2015 Map taken from July 2015 SUCAP Report based on US DOL UI data quarterly summary charts amp SUCAP Reports
State Solvency Health Update
wwwemptechcom | 18005183874 | infoemptechcom
US DOL ETA UI Actuary Report (July 2015)
bull Projected 2015 FUTA Rates ndash ldquopotentialrdquo BCR add-ons for 8 states
bull State Trust Fund Solvency vs US DOL Guidelines ndash only 17 states meet guidelines
bull In 2010 $196B of $42B in state UI debt (466) was private market
bull By 2014 $892B of (then) total $23B (3878) was private market
bull In 2015 new federal standards eliminate interest free loans to states with outstanding debts
Obama FY 2016 Budget
wwwemptechcom | 18005183874 | infoemptechcom
The FY 2016 Budget Key Pointsbull Increase FUTA tax rate from 06 to 08 in CY 2016
(effectively increases base from $42 to $56 per EE for 2016 in all states - 3333 increase)
bull States would be required to increase unemployment tax bases from as little as $7000 to $40000 (471 increase) Forces states to dramatically cut contribution rates or pass astronomical UI tax increase to ERs
bull In 2017 States would be reqrsquod to have a min tax equiv to 0175 on a $40000 tax base ($70 per EE) that would increase indefinitely based on avg wage increases
UI Tax Rate Trends
wwwemptechcom | 18005183874 | infoemptechcom
but average taxable wage bases continue to increase (up over $17K in 2014)
Source DOL
FUTA Credit Reduction amp ldquoBCRrdquo
wwwemptechcom | 18005183874 | infoemptechcom
Potential 2015 FUTA Credit Reductions from US DOL (July 2015)
UTax
These states had Title XII advance balances on Jan 1 2015 and are potentially subject to a reduction in FUTA credit on their IRS Form 940 for 2015 if the outstanding advance is not repaid by Nov 10 2015
2015 Potential Applied ForCredit Reduction 2015 Potential 2015 Potential 2015 Potential Total FUTA Credit Reduction
State(1) Due to Outstanding Advance(2) 27 add-on (3) BCR add-on(4) Credit Reduction(5) Relief (6)
California 15 00 14 29 BCR WaiverConnecticut 15 00 06 21Indiana 18 00 09 27 BCR WaiverKentucky 15 00 06 21 BCR Waiver FUTA CapNew York 15 00 00 15North Carolina 15 00 08 23Ohio 15 00 11 26 BCR WaiverSouth Carolina 18 00 03 21Virgin Islands 15 00 16 31 BCR Waiver
(1) These states have passed at least two consecutive January 1s with an outstanding Federal advance and are therefore subject to a FUTA credit reduction
(2) For each Jan 1 a state passes with an outstanding advance following the second one ERs in the state are subject to an additional 03 reduction in FUTA credit
(3) Following their third Jan 1 with an outstanding advance states are subject to an additional FUTA credit reduction called the 27 Add-on A description of this add-on is in FUTA 3302(c)(2)(B)
(4) These states are also potentially subject to the Benefit Cost Rate (BCR) additional credit reduction formula for having passed five consecutive Jan 1s with an outstanding Federal advance- FUTA section 3302 (c) (2)
(5) The FUTA credit reduction for 2015 is calculated by adding the credit reduction due to having an outstanding advance plus the reduction from the 27 add-on or the BCR add-on which if it is zero is replaced by the 27 add-on
(6) A state may apply for relief from a reduction in its FUTA credit under section FUTA 3302 The deadline for application of relief for all types was July 1 2015
(7) Final determination of the FUTA credit reduction will not be made until following the Nov 10 2015 repayment deadline
UI Tax Rate Determination
wwwemptechcom | 18005183874 | infoemptechcom
bull Primary Determination methodso Reserve Ratio (UI reserve balance avg taxable payroll)o Benefit Ratio (UI benefit charges taxable payroll)
bull New Employer UI Rate
bull Min ndash Max UI rateso Max UI rate no less than 54
bull SuccessionbullUI Transfer of Experience
bullState Rate Schedule adjustmentso Varies by overall UI trust fund balance
bull UI Voluntary Contributions
The Empire State (NY) UI Overview
wwwemptechcom | 18005183874 | infoemptechcom
bull Unemployment Rate (July 2015) 55
bull Trust Fund Positive Balance (July 2015) $8074000
bull rsquo15 Taxable Wage Base $10500 (and rising)
bull lsquo15 UI Tax Rates 21 min ndash 99 maxo 41 New ER UI
bull Paid back Title XII Federal UI loans
bull lsquo15 MinMax Weekly Benefit $100$420 (and rising)
bull State Information Data Exchange System (ldquoSIDESrdquo) UP
bull Voluntary Contribution state
The Garden State (NJ) UI Overview
wwwemptechcom | 18005183874 | infoemptechcom
bull Unemployment Rate (July 2015) 61
bull Trust Fund Positive Balance (July 2015) $255988000
bull lsquo15 Taxable Wage Base $32000
bull FY16 UI Tax Rates 12 min ndash 7 maxo New ER UI rate 34
bull lsquo15 Min Max Weekly Benefit $99-646
bull Voluntary Contribution state
The Garden State (NJ) UI Updates
wwwemptechcom | 18005183874 | infoemptechcom
Signed legislation 2014 thru July 2015
bull NJ AB3812 - requires electronic notification of death record to Dept to reduce UI fraud
bull NJ AB4189 - modifies short-time unemployment benefit lawbull NJ SB3097 - permits employee leasing companies to use ELC
experience rate or that of member companiesbull NJ SB1622 - withholding of state payments to vendors for delinquent
UI and disability taxesbull NJ SB2414 - amends DOLWD personnel access to UI claims receipt
and processing systembull NJ SB2082 - amends UI eligibility when claimant leaves work amp
subsequently laid off from work
The Constitution State (CT) UI Overview
wwwemptechcom | 18005183874 | infoemptechcom
bull Unemployment Rate (July 2015) 57
bull Trust Fund Loan Balance (Sept 2015) -$102M
bull rsquo15 Taxable Wage Base $15000
bull lsquo15 Tax Rates 19 min ndash 68 maxo New ER UI Rate 49
bull lsquo15 Potential FUTA Tax rate 21o 15 Basic FCR + 06 BCR add-ono Potential total FUTA cost per EE $189
bull rsquo15 MinMax Weekly Benefit $15 - 669
The Constitution State (CT) UI Updates
wwwemptechcom | 18005183874 | infoemptechcom
bullCT HB6707 Signed by Governor 7215 prevents ERrsquos base period account from being charged for unemployment benefits if claimant has been discharged or suspended because claimant lost their operatorrsquos license as a result of failing a drug alcohol test while off duty
bull CT is the only state subject to BCR add on (06) that has not applied for a waiver
o This is the second year CT has neglected to request a waiver
The Golden State (CA) UI Overview
wwwemptechcom | 18005183874 | infoemptechcom
bull Unemployment Rate (July 2015) 63
bull Trust Fund Loan Balance (Sept 2015) - $58B
bull lsquo15 Taxable Wage Base $7000
bull lsquo15 Tax Rates 15 min ndash 62 max o Schedule ldquoF+rdquo o 34 New ER rate
bull lsquo15 Potential FUTA Tax Rate 29o 15 Basic FCR + 14 BCR add ono $203 addtrsquol FUTA cost due to credit reduction and BCR
bull lsquo15 MinMax Weekly Benefit $40-450
The Golden State (CA) UI Updates
wwwemptechcom | 18005183874 | infoemptechcom
bull California is subject to the BCR add-on but has applied for a waivero Estimated BCR add on for 2015 is 14 o If the BCR waiver is approved the net cost is potentially $147 per
EE otherwise it could be $245 per EEo Final determination will be made by DOL after Nov 10 2015
bull Uber amp Lyft decisions on worker classification o EE vs independent contractor
bull UI appeals hearings ndash SB 1314 enacted extends deadline to file appeals
bull Administrative changes to law on UI Transfer of Experience when assets are acquired
bull SB 1131 enacted - members of LLC are not employees
The Buckeye State (OH) UI Overview
wwwemptechcom | 18005183874 | infoemptechcom
bull Unemployment Rate (July 2015) 5
bull Trust Fund Loan Balance (Sept 2015) - $875M
bull lsquo15 Taxable Wage Base $9000
bull lsquo15 Tax Rates 3 min ndash 108 max o New ER UI Tax Rate 27
bull lsquo15 Potential FUTA Tax Rate 26o 15 Basic FCR + 11 BCR add ono $182 addtrsquol FUTA cost due to credit reduction and BCR rsquo15
bull Voluntary Contribution state
Key Federal UI Legislation
wwwemptechcom | 18005183874 | infoemptechcom
bull 2004 SUTA Dumping Act
bull 2011 TAAE UI Integrity Act (Sec 252)
bull 2012 ATRAbull EE SS tax rate return to normal
Audience Questions
wwwemptechcom | 18005183874 | infoemptechcom
bull Changes in ET Structure
bull MampA Activity
2004 SUTA Dumping Prevention Act
wwwemptechcom | 18005183874 | infoemptechcom
bull SUTA Dumping (aka ldquounemployment tax avoidancerdquo) occurs by shifting EEs to a less-taxed entity to avoid paying a higher UI tax rate
bull Migration of EEs between legal entities (MampA consolidation etc) may trigger time-sensitive mandatory compliance reporting ndash misunderstood amp often missed
bull Penalties for missing or incorrect reporting can include max UI ratings civil ampor criminal penaltiesbull SUTA Dumping Detection Software for enforcement
bull Read Employerrsquos MampA ldquoTo Dordquo List
2011 Federal Act ndash UI Integrity
wwwemptechcom | 18005183874 | infoemptechcom
bull Follow on to 2009 Executive Order to reduce improper UI payments
bull Under UI Integrity rules states must not relieve employers of charges when they fail to respond timely or adequately to UI claims related agency requests bull Pattern of Failure as little as two instances
bull Employers cannot collude with employee to misuse unemployment claim system
bull Each state has unique rules method of enforcement being formulated
ldquoPattern of Failurerdquo Financial Impact Example
wwwemptechcom | 18005183874 | infoemptechcom
Case Study
bull ER With 100 SeparationsYr ldquoPattern of Failurerdquo classification bull Benefit$ paid to claimant prior to successful Appeal by ER
FACTORS FIGURESWeekly benefit amount Assume $300
Time to appeal 8 weeks
of claims lost on initial determination amp won by ER on Appeal
10 (out of 100 total separations)
Charge to ER UI account $24000 ($2400 x 10 claims) now NON-RECOVERABLE due to ldquoPattern of Failurerdquo
Additional Exposure Negative Impact bull May raise AUDIT RISK for other UI areas
bull May elevate ER experience rating
ldquoPattern of Failurerdquo Example Letter
wwwemptechcom | 18005183874 | infoemptechcom
Compliance amp Enforcement UI Integrity
wwwemptechcom | 18005183874 | infoemptechcom
bull Unemployment Claims ldquoTriggerrdquondash Claims filings from an EE associated with a MampA event may
trigger an ldquoevaluationrdquo of the succession reporting due to confusion surrounded which ER responsible for benefit charge
bull ldquoSDDSrdquo (SUTA Dumping Detection Software) ndash Many States using SDDS to ldquocatchrdquo EE migrations ndash Flags accounts for review to see if UI succession reporting
completed
bull ldquoQETPrdquo (Questionable Employment Tax Practices)ndash Under QETP IRS and 37 states sharing information and
specifically focusing on ET for auditsndash As of mid-2012 QETP has resulted in audits of 11000
employers
Audit Alert Inter-Agency Info Sharing
wwwemptechcom | 18005183874 | infoemptechcom
bull Questionable Employment Tax Practices ldquoQETPrdquo Initiativebull 37 States amp IRSbull 12000+ business examined thru lsquo12
bull Fed amp state info sharing data mining amp cross-agency task forces
bull Significant focus on worker classification
bull Significant incentives to states to aggressively audit
UI Tax Optimization Focus
wwwemptechcom | 18005183874 | infoemptechcom
bull UI Cost Control
bull UI Retrospective Review
UI Benefit Charges Material Expense
wwwemptechcom | 18005183874 | infoemptechcom
UTax
UI Integrity Oversight Plan
wwwemptechcom | 18005183874 | infoemptechcom
UTax
Designate a Person or Team
Total UI Claims (also by
statelocation)Which claims failed to be
timely adequate
Why Who
Track winloss for protests For
losses why WhoTrack winloss for
appeals Why Who
Impact on experience
rating Calculate cost
to organization
Find amp fix areas of organizational
weakness
UI Integrity Oversight Plan
wwwemptechcom | 18005183874 | infoemptechcom
UTax
ldquoACTrdquoProvide information to UI
agencies that isAccurateComplete
Timely
Best Practices
UI Claims Admin Reporting
wwwemptechcom | 18005183874 | infoemptechcom
ldquoFloat like a butterfly sting like a bee You cannot hit what you cannot seerdquo
Muhammad AliPeriodicReports
Separations
Claims
Win LoseBy Location
Liability Charges
Retro UI Review
wwwemptechcom | 18005183874 | infoemptechcom
General Evaluationbull Contact ALL UI jurisdictions
bull Perform account balancing (per state records) ndash QTR by QTR rearward review
bull Determine what credits found eligible for refund amp if debits found if correct
bull Research for any missing incomplete or untimely reporting on the account
bull Review all MampA past 3 years
bull Help reduce source of potential penalty or increased UI tax expense
Photo credit motone
UI Resources
wwwemptechcom | 18005183874 | infoemptechcom
bull 10 Questions for Internal SUTA Dumping Assessmentbull How Nonprofit Employers Can Reduce UI Costs bull FAQs on Employment Tax Compliance amp Savings in MampA
Go here to download three pages of UI Tips from Emptech
EmptechrsquosUI Tips
Download this one page checklist to assess the state of your UI Claims Administration
Is Your UCM
Broken
Get them here
Get our Top 15 Tips for MampA Tax Treatment
EmptechBlog
Go here to see the latest news on HR Payroll and Employment Tax topics
Thank You
wwwemptechcom | 18005183874 | infoemptechcom
Questions
Contact (203) 738-0545 rhendersonemptechcom
- Employment Tax Consulting- UI Claims Management- Credits- Talent Management- Electronic I-9- Verification of Employment
FICA Overview
wwwemptechcom | 18005183874 | infoemptechcom
bull Federal Insurance Contributions Act (ldquoFICArdquo) codified under USC Title 26 Chap 21
bull Entire FICA remains 153 (SS tax 124 + Medicare 29) equally shared between Employer ldquoERrdquo and Employee ldquoEErdquo ERs must withhold additional 09 from EErsquos wages in excess of $200K (no ER matching contribution)
bull Supreme Court rules FICA tax due on severance pay
bull Social Security Wage Baseo 2015 = $118500 (max $7347 SS tax)o 2014 = $117000 (max $7254 SS tax)o 2013 = $113700 2012 = $110100
FICA ndash IRS Notice 2015-15
wwwemptechcom | 18005183874 | infoemptechcom
bull Potential change of FICA refund rules o EE consent used to support a claim for refund under
sect 6402 of IRC and sect 316402(a)-2 of ETR for overpaid taxes under FICA and RRTA
bull Proposedo EE consent must identify basis of the claim for refund
and be signed under penalties of perjuryo Defines ldquoreasonable effortsrdquoo Would permit but not require EE consent to be
requested furnished retained electronically
bull IRS currently evaluating position
FICA Changes ndash APA
wwwemptechcom | 18005183874 | infoemptechcom
APA response to IRS on the FICA
- affirming all except certain ER-side only filings
FUTA Overview
wwwemptechcom | 18005183874 | infoemptechcom
bull Federal Unemployment Tax (FUTA) designed to help fund UI Admin ndash codified under USC Title 26 Chap 32
bull 6 rate with fixed $7000 taxable wage base effective rate after applying 54 credit is 06
bull Due to state needs to borrow Title XII loans from Fed to fund their State UI programs many states triggered FUTA Credit Reductions ndash involuntary repayment
bull States with Title XII loans for 5 years trigger additional reduction via Benefit Cost Reduction (BCR) factor
State by State Trust Fund
wwwemptechcom | 18005183874 | infoemptechcom
Red = borrowing as of 8415 Brown = using ER-financed bonds to repay Title XII loansYellow = less than 6 mos of positive balances Green = more than 6 mos of benefits
State Trust Fund Solvency as of August 2015 Map taken from July 2015 SUCAP Report based on US DOL UI data quarterly summary charts amp SUCAP Reports
State Solvency Health Update
wwwemptechcom | 18005183874 | infoemptechcom
US DOL ETA UI Actuary Report (July 2015)
bull Projected 2015 FUTA Rates ndash ldquopotentialrdquo BCR add-ons for 8 states
bull State Trust Fund Solvency vs US DOL Guidelines ndash only 17 states meet guidelines
bull In 2010 $196B of $42B in state UI debt (466) was private market
bull By 2014 $892B of (then) total $23B (3878) was private market
bull In 2015 new federal standards eliminate interest free loans to states with outstanding debts
Obama FY 2016 Budget
wwwemptechcom | 18005183874 | infoemptechcom
The FY 2016 Budget Key Pointsbull Increase FUTA tax rate from 06 to 08 in CY 2016
(effectively increases base from $42 to $56 per EE for 2016 in all states - 3333 increase)
bull States would be required to increase unemployment tax bases from as little as $7000 to $40000 (471 increase) Forces states to dramatically cut contribution rates or pass astronomical UI tax increase to ERs
bull In 2017 States would be reqrsquod to have a min tax equiv to 0175 on a $40000 tax base ($70 per EE) that would increase indefinitely based on avg wage increases
UI Tax Rate Trends
wwwemptechcom | 18005183874 | infoemptechcom
but average taxable wage bases continue to increase (up over $17K in 2014)
Source DOL
FUTA Credit Reduction amp ldquoBCRrdquo
wwwemptechcom | 18005183874 | infoemptechcom
Potential 2015 FUTA Credit Reductions from US DOL (July 2015)
UTax
These states had Title XII advance balances on Jan 1 2015 and are potentially subject to a reduction in FUTA credit on their IRS Form 940 for 2015 if the outstanding advance is not repaid by Nov 10 2015
2015 Potential Applied ForCredit Reduction 2015 Potential 2015 Potential 2015 Potential Total FUTA Credit Reduction
State(1) Due to Outstanding Advance(2) 27 add-on (3) BCR add-on(4) Credit Reduction(5) Relief (6)
California 15 00 14 29 BCR WaiverConnecticut 15 00 06 21Indiana 18 00 09 27 BCR WaiverKentucky 15 00 06 21 BCR Waiver FUTA CapNew York 15 00 00 15North Carolina 15 00 08 23Ohio 15 00 11 26 BCR WaiverSouth Carolina 18 00 03 21Virgin Islands 15 00 16 31 BCR Waiver
(1) These states have passed at least two consecutive January 1s with an outstanding Federal advance and are therefore subject to a FUTA credit reduction
(2) For each Jan 1 a state passes with an outstanding advance following the second one ERs in the state are subject to an additional 03 reduction in FUTA credit
(3) Following their third Jan 1 with an outstanding advance states are subject to an additional FUTA credit reduction called the 27 Add-on A description of this add-on is in FUTA 3302(c)(2)(B)
(4) These states are also potentially subject to the Benefit Cost Rate (BCR) additional credit reduction formula for having passed five consecutive Jan 1s with an outstanding Federal advance- FUTA section 3302 (c) (2)
(5) The FUTA credit reduction for 2015 is calculated by adding the credit reduction due to having an outstanding advance plus the reduction from the 27 add-on or the BCR add-on which if it is zero is replaced by the 27 add-on
(6) A state may apply for relief from a reduction in its FUTA credit under section FUTA 3302 The deadline for application of relief for all types was July 1 2015
(7) Final determination of the FUTA credit reduction will not be made until following the Nov 10 2015 repayment deadline
UI Tax Rate Determination
wwwemptechcom | 18005183874 | infoemptechcom
bull Primary Determination methodso Reserve Ratio (UI reserve balance avg taxable payroll)o Benefit Ratio (UI benefit charges taxable payroll)
bull New Employer UI Rate
bull Min ndash Max UI rateso Max UI rate no less than 54
bull SuccessionbullUI Transfer of Experience
bullState Rate Schedule adjustmentso Varies by overall UI trust fund balance
bull UI Voluntary Contributions
The Empire State (NY) UI Overview
wwwemptechcom | 18005183874 | infoemptechcom
bull Unemployment Rate (July 2015) 55
bull Trust Fund Positive Balance (July 2015) $8074000
bull rsquo15 Taxable Wage Base $10500 (and rising)
bull lsquo15 UI Tax Rates 21 min ndash 99 maxo 41 New ER UI
bull Paid back Title XII Federal UI loans
bull lsquo15 MinMax Weekly Benefit $100$420 (and rising)
bull State Information Data Exchange System (ldquoSIDESrdquo) UP
bull Voluntary Contribution state
The Garden State (NJ) UI Overview
wwwemptechcom | 18005183874 | infoemptechcom
bull Unemployment Rate (July 2015) 61
bull Trust Fund Positive Balance (July 2015) $255988000
bull lsquo15 Taxable Wage Base $32000
bull FY16 UI Tax Rates 12 min ndash 7 maxo New ER UI rate 34
bull lsquo15 Min Max Weekly Benefit $99-646
bull Voluntary Contribution state
The Garden State (NJ) UI Updates
wwwemptechcom | 18005183874 | infoemptechcom
Signed legislation 2014 thru July 2015
bull NJ AB3812 - requires electronic notification of death record to Dept to reduce UI fraud
bull NJ AB4189 - modifies short-time unemployment benefit lawbull NJ SB3097 - permits employee leasing companies to use ELC
experience rate or that of member companiesbull NJ SB1622 - withholding of state payments to vendors for delinquent
UI and disability taxesbull NJ SB2414 - amends DOLWD personnel access to UI claims receipt
and processing systembull NJ SB2082 - amends UI eligibility when claimant leaves work amp
subsequently laid off from work
The Constitution State (CT) UI Overview
wwwemptechcom | 18005183874 | infoemptechcom
bull Unemployment Rate (July 2015) 57
bull Trust Fund Loan Balance (Sept 2015) -$102M
bull rsquo15 Taxable Wage Base $15000
bull lsquo15 Tax Rates 19 min ndash 68 maxo New ER UI Rate 49
bull lsquo15 Potential FUTA Tax rate 21o 15 Basic FCR + 06 BCR add-ono Potential total FUTA cost per EE $189
bull rsquo15 MinMax Weekly Benefit $15 - 669
The Constitution State (CT) UI Updates
wwwemptechcom | 18005183874 | infoemptechcom
bullCT HB6707 Signed by Governor 7215 prevents ERrsquos base period account from being charged for unemployment benefits if claimant has been discharged or suspended because claimant lost their operatorrsquos license as a result of failing a drug alcohol test while off duty
bull CT is the only state subject to BCR add on (06) that has not applied for a waiver
o This is the second year CT has neglected to request a waiver
The Golden State (CA) UI Overview
wwwemptechcom | 18005183874 | infoemptechcom
bull Unemployment Rate (July 2015) 63
bull Trust Fund Loan Balance (Sept 2015) - $58B
bull lsquo15 Taxable Wage Base $7000
bull lsquo15 Tax Rates 15 min ndash 62 max o Schedule ldquoF+rdquo o 34 New ER rate
bull lsquo15 Potential FUTA Tax Rate 29o 15 Basic FCR + 14 BCR add ono $203 addtrsquol FUTA cost due to credit reduction and BCR
bull lsquo15 MinMax Weekly Benefit $40-450
The Golden State (CA) UI Updates
wwwemptechcom | 18005183874 | infoemptechcom
bull California is subject to the BCR add-on but has applied for a waivero Estimated BCR add on for 2015 is 14 o If the BCR waiver is approved the net cost is potentially $147 per
EE otherwise it could be $245 per EEo Final determination will be made by DOL after Nov 10 2015
bull Uber amp Lyft decisions on worker classification o EE vs independent contractor
bull UI appeals hearings ndash SB 1314 enacted extends deadline to file appeals
bull Administrative changes to law on UI Transfer of Experience when assets are acquired
bull SB 1131 enacted - members of LLC are not employees
The Buckeye State (OH) UI Overview
wwwemptechcom | 18005183874 | infoemptechcom
bull Unemployment Rate (July 2015) 5
bull Trust Fund Loan Balance (Sept 2015) - $875M
bull lsquo15 Taxable Wage Base $9000
bull lsquo15 Tax Rates 3 min ndash 108 max o New ER UI Tax Rate 27
bull lsquo15 Potential FUTA Tax Rate 26o 15 Basic FCR + 11 BCR add ono $182 addtrsquol FUTA cost due to credit reduction and BCR rsquo15
bull Voluntary Contribution state
Key Federal UI Legislation
wwwemptechcom | 18005183874 | infoemptechcom
bull 2004 SUTA Dumping Act
bull 2011 TAAE UI Integrity Act (Sec 252)
bull 2012 ATRAbull EE SS tax rate return to normal
Audience Questions
wwwemptechcom | 18005183874 | infoemptechcom
bull Changes in ET Structure
bull MampA Activity
2004 SUTA Dumping Prevention Act
wwwemptechcom | 18005183874 | infoemptechcom
bull SUTA Dumping (aka ldquounemployment tax avoidancerdquo) occurs by shifting EEs to a less-taxed entity to avoid paying a higher UI tax rate
bull Migration of EEs between legal entities (MampA consolidation etc) may trigger time-sensitive mandatory compliance reporting ndash misunderstood amp often missed
bull Penalties for missing or incorrect reporting can include max UI ratings civil ampor criminal penaltiesbull SUTA Dumping Detection Software for enforcement
bull Read Employerrsquos MampA ldquoTo Dordquo List
2011 Federal Act ndash UI Integrity
wwwemptechcom | 18005183874 | infoemptechcom
bull Follow on to 2009 Executive Order to reduce improper UI payments
bull Under UI Integrity rules states must not relieve employers of charges when they fail to respond timely or adequately to UI claims related agency requests bull Pattern of Failure as little as two instances
bull Employers cannot collude with employee to misuse unemployment claim system
bull Each state has unique rules method of enforcement being formulated
ldquoPattern of Failurerdquo Financial Impact Example
wwwemptechcom | 18005183874 | infoemptechcom
Case Study
bull ER With 100 SeparationsYr ldquoPattern of Failurerdquo classification bull Benefit$ paid to claimant prior to successful Appeal by ER
FACTORS FIGURESWeekly benefit amount Assume $300
Time to appeal 8 weeks
of claims lost on initial determination amp won by ER on Appeal
10 (out of 100 total separations)
Charge to ER UI account $24000 ($2400 x 10 claims) now NON-RECOVERABLE due to ldquoPattern of Failurerdquo
Additional Exposure Negative Impact bull May raise AUDIT RISK for other UI areas
bull May elevate ER experience rating
ldquoPattern of Failurerdquo Example Letter
wwwemptechcom | 18005183874 | infoemptechcom
Compliance amp Enforcement UI Integrity
wwwemptechcom | 18005183874 | infoemptechcom
bull Unemployment Claims ldquoTriggerrdquondash Claims filings from an EE associated with a MampA event may
trigger an ldquoevaluationrdquo of the succession reporting due to confusion surrounded which ER responsible for benefit charge
bull ldquoSDDSrdquo (SUTA Dumping Detection Software) ndash Many States using SDDS to ldquocatchrdquo EE migrations ndash Flags accounts for review to see if UI succession reporting
completed
bull ldquoQETPrdquo (Questionable Employment Tax Practices)ndash Under QETP IRS and 37 states sharing information and
specifically focusing on ET for auditsndash As of mid-2012 QETP has resulted in audits of 11000
employers
Audit Alert Inter-Agency Info Sharing
wwwemptechcom | 18005183874 | infoemptechcom
bull Questionable Employment Tax Practices ldquoQETPrdquo Initiativebull 37 States amp IRSbull 12000+ business examined thru lsquo12
bull Fed amp state info sharing data mining amp cross-agency task forces
bull Significant focus on worker classification
bull Significant incentives to states to aggressively audit
UI Tax Optimization Focus
wwwemptechcom | 18005183874 | infoemptechcom
bull UI Cost Control
bull UI Retrospective Review
UI Benefit Charges Material Expense
wwwemptechcom | 18005183874 | infoemptechcom
UTax
UI Integrity Oversight Plan
wwwemptechcom | 18005183874 | infoemptechcom
UTax
Designate a Person or Team
Total UI Claims (also by
statelocation)Which claims failed to be
timely adequate
Why Who
Track winloss for protests For
losses why WhoTrack winloss for
appeals Why Who
Impact on experience
rating Calculate cost
to organization
Find amp fix areas of organizational
weakness
UI Integrity Oversight Plan
wwwemptechcom | 18005183874 | infoemptechcom
UTax
ldquoACTrdquoProvide information to UI
agencies that isAccurateComplete
Timely
Best Practices
UI Claims Admin Reporting
wwwemptechcom | 18005183874 | infoemptechcom
ldquoFloat like a butterfly sting like a bee You cannot hit what you cannot seerdquo
Muhammad AliPeriodicReports
Separations
Claims
Win LoseBy Location
Liability Charges
Retro UI Review
wwwemptechcom | 18005183874 | infoemptechcom
General Evaluationbull Contact ALL UI jurisdictions
bull Perform account balancing (per state records) ndash QTR by QTR rearward review
bull Determine what credits found eligible for refund amp if debits found if correct
bull Research for any missing incomplete or untimely reporting on the account
bull Review all MampA past 3 years
bull Help reduce source of potential penalty or increased UI tax expense
Photo credit motone
UI Resources
wwwemptechcom | 18005183874 | infoemptechcom
bull 10 Questions for Internal SUTA Dumping Assessmentbull How Nonprofit Employers Can Reduce UI Costs bull FAQs on Employment Tax Compliance amp Savings in MampA
Go here to download three pages of UI Tips from Emptech
EmptechrsquosUI Tips
Download this one page checklist to assess the state of your UI Claims Administration
Is Your UCM
Broken
Get them here
Get our Top 15 Tips for MampA Tax Treatment
EmptechBlog
Go here to see the latest news on HR Payroll and Employment Tax topics
Thank You
wwwemptechcom | 18005183874 | infoemptechcom
Questions
Contact (203) 738-0545 rhendersonemptechcom
- Employment Tax Consulting- UI Claims Management- Credits- Talent Management- Electronic I-9- Verification of Employment
FICA ndash IRS Notice 2015-15
wwwemptechcom | 18005183874 | infoemptechcom
bull Potential change of FICA refund rules o EE consent used to support a claim for refund under
sect 6402 of IRC and sect 316402(a)-2 of ETR for overpaid taxes under FICA and RRTA
bull Proposedo EE consent must identify basis of the claim for refund
and be signed under penalties of perjuryo Defines ldquoreasonable effortsrdquoo Would permit but not require EE consent to be
requested furnished retained electronically
bull IRS currently evaluating position
FICA Changes ndash APA
wwwemptechcom | 18005183874 | infoemptechcom
APA response to IRS on the FICA
- affirming all except certain ER-side only filings
FUTA Overview
wwwemptechcom | 18005183874 | infoemptechcom
bull Federal Unemployment Tax (FUTA) designed to help fund UI Admin ndash codified under USC Title 26 Chap 32
bull 6 rate with fixed $7000 taxable wage base effective rate after applying 54 credit is 06
bull Due to state needs to borrow Title XII loans from Fed to fund their State UI programs many states triggered FUTA Credit Reductions ndash involuntary repayment
bull States with Title XII loans for 5 years trigger additional reduction via Benefit Cost Reduction (BCR) factor
State by State Trust Fund
wwwemptechcom | 18005183874 | infoemptechcom
Red = borrowing as of 8415 Brown = using ER-financed bonds to repay Title XII loansYellow = less than 6 mos of positive balances Green = more than 6 mos of benefits
State Trust Fund Solvency as of August 2015 Map taken from July 2015 SUCAP Report based on US DOL UI data quarterly summary charts amp SUCAP Reports
State Solvency Health Update
wwwemptechcom | 18005183874 | infoemptechcom
US DOL ETA UI Actuary Report (July 2015)
bull Projected 2015 FUTA Rates ndash ldquopotentialrdquo BCR add-ons for 8 states
bull State Trust Fund Solvency vs US DOL Guidelines ndash only 17 states meet guidelines
bull In 2010 $196B of $42B in state UI debt (466) was private market
bull By 2014 $892B of (then) total $23B (3878) was private market
bull In 2015 new federal standards eliminate interest free loans to states with outstanding debts
Obama FY 2016 Budget
wwwemptechcom | 18005183874 | infoemptechcom
The FY 2016 Budget Key Pointsbull Increase FUTA tax rate from 06 to 08 in CY 2016
(effectively increases base from $42 to $56 per EE for 2016 in all states - 3333 increase)
bull States would be required to increase unemployment tax bases from as little as $7000 to $40000 (471 increase) Forces states to dramatically cut contribution rates or pass astronomical UI tax increase to ERs
bull In 2017 States would be reqrsquod to have a min tax equiv to 0175 on a $40000 tax base ($70 per EE) that would increase indefinitely based on avg wage increases
UI Tax Rate Trends
wwwemptechcom | 18005183874 | infoemptechcom
but average taxable wage bases continue to increase (up over $17K in 2014)
Source DOL
FUTA Credit Reduction amp ldquoBCRrdquo
wwwemptechcom | 18005183874 | infoemptechcom
Potential 2015 FUTA Credit Reductions from US DOL (July 2015)
UTax
These states had Title XII advance balances on Jan 1 2015 and are potentially subject to a reduction in FUTA credit on their IRS Form 940 for 2015 if the outstanding advance is not repaid by Nov 10 2015
2015 Potential Applied ForCredit Reduction 2015 Potential 2015 Potential 2015 Potential Total FUTA Credit Reduction
State(1) Due to Outstanding Advance(2) 27 add-on (3) BCR add-on(4) Credit Reduction(5) Relief (6)
California 15 00 14 29 BCR WaiverConnecticut 15 00 06 21Indiana 18 00 09 27 BCR WaiverKentucky 15 00 06 21 BCR Waiver FUTA CapNew York 15 00 00 15North Carolina 15 00 08 23Ohio 15 00 11 26 BCR WaiverSouth Carolina 18 00 03 21Virgin Islands 15 00 16 31 BCR Waiver
(1) These states have passed at least two consecutive January 1s with an outstanding Federal advance and are therefore subject to a FUTA credit reduction
(2) For each Jan 1 a state passes with an outstanding advance following the second one ERs in the state are subject to an additional 03 reduction in FUTA credit
(3) Following their third Jan 1 with an outstanding advance states are subject to an additional FUTA credit reduction called the 27 Add-on A description of this add-on is in FUTA 3302(c)(2)(B)
(4) These states are also potentially subject to the Benefit Cost Rate (BCR) additional credit reduction formula for having passed five consecutive Jan 1s with an outstanding Federal advance- FUTA section 3302 (c) (2)
(5) The FUTA credit reduction for 2015 is calculated by adding the credit reduction due to having an outstanding advance plus the reduction from the 27 add-on or the BCR add-on which if it is zero is replaced by the 27 add-on
(6) A state may apply for relief from a reduction in its FUTA credit under section FUTA 3302 The deadline for application of relief for all types was July 1 2015
(7) Final determination of the FUTA credit reduction will not be made until following the Nov 10 2015 repayment deadline
UI Tax Rate Determination
wwwemptechcom | 18005183874 | infoemptechcom
bull Primary Determination methodso Reserve Ratio (UI reserve balance avg taxable payroll)o Benefit Ratio (UI benefit charges taxable payroll)
bull New Employer UI Rate
bull Min ndash Max UI rateso Max UI rate no less than 54
bull SuccessionbullUI Transfer of Experience
bullState Rate Schedule adjustmentso Varies by overall UI trust fund balance
bull UI Voluntary Contributions
The Empire State (NY) UI Overview
wwwemptechcom | 18005183874 | infoemptechcom
bull Unemployment Rate (July 2015) 55
bull Trust Fund Positive Balance (July 2015) $8074000
bull rsquo15 Taxable Wage Base $10500 (and rising)
bull lsquo15 UI Tax Rates 21 min ndash 99 maxo 41 New ER UI
bull Paid back Title XII Federal UI loans
bull lsquo15 MinMax Weekly Benefit $100$420 (and rising)
bull State Information Data Exchange System (ldquoSIDESrdquo) UP
bull Voluntary Contribution state
The Garden State (NJ) UI Overview
wwwemptechcom | 18005183874 | infoemptechcom
bull Unemployment Rate (July 2015) 61
bull Trust Fund Positive Balance (July 2015) $255988000
bull lsquo15 Taxable Wage Base $32000
bull FY16 UI Tax Rates 12 min ndash 7 maxo New ER UI rate 34
bull lsquo15 Min Max Weekly Benefit $99-646
bull Voluntary Contribution state
The Garden State (NJ) UI Updates
wwwemptechcom | 18005183874 | infoemptechcom
Signed legislation 2014 thru July 2015
bull NJ AB3812 - requires electronic notification of death record to Dept to reduce UI fraud
bull NJ AB4189 - modifies short-time unemployment benefit lawbull NJ SB3097 - permits employee leasing companies to use ELC
experience rate or that of member companiesbull NJ SB1622 - withholding of state payments to vendors for delinquent
UI and disability taxesbull NJ SB2414 - amends DOLWD personnel access to UI claims receipt
and processing systembull NJ SB2082 - amends UI eligibility when claimant leaves work amp
subsequently laid off from work
The Constitution State (CT) UI Overview
wwwemptechcom | 18005183874 | infoemptechcom
bull Unemployment Rate (July 2015) 57
bull Trust Fund Loan Balance (Sept 2015) -$102M
bull rsquo15 Taxable Wage Base $15000
bull lsquo15 Tax Rates 19 min ndash 68 maxo New ER UI Rate 49
bull lsquo15 Potential FUTA Tax rate 21o 15 Basic FCR + 06 BCR add-ono Potential total FUTA cost per EE $189
bull rsquo15 MinMax Weekly Benefit $15 - 669
The Constitution State (CT) UI Updates
wwwemptechcom | 18005183874 | infoemptechcom
bullCT HB6707 Signed by Governor 7215 prevents ERrsquos base period account from being charged for unemployment benefits if claimant has been discharged or suspended because claimant lost their operatorrsquos license as a result of failing a drug alcohol test while off duty
bull CT is the only state subject to BCR add on (06) that has not applied for a waiver
o This is the second year CT has neglected to request a waiver
The Golden State (CA) UI Overview
wwwemptechcom | 18005183874 | infoemptechcom
bull Unemployment Rate (July 2015) 63
bull Trust Fund Loan Balance (Sept 2015) - $58B
bull lsquo15 Taxable Wage Base $7000
bull lsquo15 Tax Rates 15 min ndash 62 max o Schedule ldquoF+rdquo o 34 New ER rate
bull lsquo15 Potential FUTA Tax Rate 29o 15 Basic FCR + 14 BCR add ono $203 addtrsquol FUTA cost due to credit reduction and BCR
bull lsquo15 MinMax Weekly Benefit $40-450
The Golden State (CA) UI Updates
wwwemptechcom | 18005183874 | infoemptechcom
bull California is subject to the BCR add-on but has applied for a waivero Estimated BCR add on for 2015 is 14 o If the BCR waiver is approved the net cost is potentially $147 per
EE otherwise it could be $245 per EEo Final determination will be made by DOL after Nov 10 2015
bull Uber amp Lyft decisions on worker classification o EE vs independent contractor
bull UI appeals hearings ndash SB 1314 enacted extends deadline to file appeals
bull Administrative changes to law on UI Transfer of Experience when assets are acquired
bull SB 1131 enacted - members of LLC are not employees
The Buckeye State (OH) UI Overview
wwwemptechcom | 18005183874 | infoemptechcom
bull Unemployment Rate (July 2015) 5
bull Trust Fund Loan Balance (Sept 2015) - $875M
bull lsquo15 Taxable Wage Base $9000
bull lsquo15 Tax Rates 3 min ndash 108 max o New ER UI Tax Rate 27
bull lsquo15 Potential FUTA Tax Rate 26o 15 Basic FCR + 11 BCR add ono $182 addtrsquol FUTA cost due to credit reduction and BCR rsquo15
bull Voluntary Contribution state
Key Federal UI Legislation
wwwemptechcom | 18005183874 | infoemptechcom
bull 2004 SUTA Dumping Act
bull 2011 TAAE UI Integrity Act (Sec 252)
bull 2012 ATRAbull EE SS tax rate return to normal
Audience Questions
wwwemptechcom | 18005183874 | infoemptechcom
bull Changes in ET Structure
bull MampA Activity
2004 SUTA Dumping Prevention Act
wwwemptechcom | 18005183874 | infoemptechcom
bull SUTA Dumping (aka ldquounemployment tax avoidancerdquo) occurs by shifting EEs to a less-taxed entity to avoid paying a higher UI tax rate
bull Migration of EEs between legal entities (MampA consolidation etc) may trigger time-sensitive mandatory compliance reporting ndash misunderstood amp often missed
bull Penalties for missing or incorrect reporting can include max UI ratings civil ampor criminal penaltiesbull SUTA Dumping Detection Software for enforcement
bull Read Employerrsquos MampA ldquoTo Dordquo List
2011 Federal Act ndash UI Integrity
wwwemptechcom | 18005183874 | infoemptechcom
bull Follow on to 2009 Executive Order to reduce improper UI payments
bull Under UI Integrity rules states must not relieve employers of charges when they fail to respond timely or adequately to UI claims related agency requests bull Pattern of Failure as little as two instances
bull Employers cannot collude with employee to misuse unemployment claim system
bull Each state has unique rules method of enforcement being formulated
ldquoPattern of Failurerdquo Financial Impact Example
wwwemptechcom | 18005183874 | infoemptechcom
Case Study
bull ER With 100 SeparationsYr ldquoPattern of Failurerdquo classification bull Benefit$ paid to claimant prior to successful Appeal by ER
FACTORS FIGURESWeekly benefit amount Assume $300
Time to appeal 8 weeks
of claims lost on initial determination amp won by ER on Appeal
10 (out of 100 total separations)
Charge to ER UI account $24000 ($2400 x 10 claims) now NON-RECOVERABLE due to ldquoPattern of Failurerdquo
Additional Exposure Negative Impact bull May raise AUDIT RISK for other UI areas
bull May elevate ER experience rating
ldquoPattern of Failurerdquo Example Letter
wwwemptechcom | 18005183874 | infoemptechcom
Compliance amp Enforcement UI Integrity
wwwemptechcom | 18005183874 | infoemptechcom
bull Unemployment Claims ldquoTriggerrdquondash Claims filings from an EE associated with a MampA event may
trigger an ldquoevaluationrdquo of the succession reporting due to confusion surrounded which ER responsible for benefit charge
bull ldquoSDDSrdquo (SUTA Dumping Detection Software) ndash Many States using SDDS to ldquocatchrdquo EE migrations ndash Flags accounts for review to see if UI succession reporting
completed
bull ldquoQETPrdquo (Questionable Employment Tax Practices)ndash Under QETP IRS and 37 states sharing information and
specifically focusing on ET for auditsndash As of mid-2012 QETP has resulted in audits of 11000
employers
Audit Alert Inter-Agency Info Sharing
wwwemptechcom | 18005183874 | infoemptechcom
bull Questionable Employment Tax Practices ldquoQETPrdquo Initiativebull 37 States amp IRSbull 12000+ business examined thru lsquo12
bull Fed amp state info sharing data mining amp cross-agency task forces
bull Significant focus on worker classification
bull Significant incentives to states to aggressively audit
UI Tax Optimization Focus
wwwemptechcom | 18005183874 | infoemptechcom
bull UI Cost Control
bull UI Retrospective Review
UI Benefit Charges Material Expense
wwwemptechcom | 18005183874 | infoemptechcom
UTax
UI Integrity Oversight Plan
wwwemptechcom | 18005183874 | infoemptechcom
UTax
Designate a Person or Team
Total UI Claims (also by
statelocation)Which claims failed to be
timely adequate
Why Who
Track winloss for protests For
losses why WhoTrack winloss for
appeals Why Who
Impact on experience
rating Calculate cost
to organization
Find amp fix areas of organizational
weakness
UI Integrity Oversight Plan
wwwemptechcom | 18005183874 | infoemptechcom
UTax
ldquoACTrdquoProvide information to UI
agencies that isAccurateComplete
Timely
Best Practices
UI Claims Admin Reporting
wwwemptechcom | 18005183874 | infoemptechcom
ldquoFloat like a butterfly sting like a bee You cannot hit what you cannot seerdquo
Muhammad AliPeriodicReports
Separations
Claims
Win LoseBy Location
Liability Charges
Retro UI Review
wwwemptechcom | 18005183874 | infoemptechcom
General Evaluationbull Contact ALL UI jurisdictions
bull Perform account balancing (per state records) ndash QTR by QTR rearward review
bull Determine what credits found eligible for refund amp if debits found if correct
bull Research for any missing incomplete or untimely reporting on the account
bull Review all MampA past 3 years
bull Help reduce source of potential penalty or increased UI tax expense
Photo credit motone
UI Resources
wwwemptechcom | 18005183874 | infoemptechcom
bull 10 Questions for Internal SUTA Dumping Assessmentbull How Nonprofit Employers Can Reduce UI Costs bull FAQs on Employment Tax Compliance amp Savings in MampA
Go here to download three pages of UI Tips from Emptech
EmptechrsquosUI Tips
Download this one page checklist to assess the state of your UI Claims Administration
Is Your UCM
Broken
Get them here
Get our Top 15 Tips for MampA Tax Treatment
EmptechBlog
Go here to see the latest news on HR Payroll and Employment Tax topics
Thank You
wwwemptechcom | 18005183874 | infoemptechcom
Questions
Contact (203) 738-0545 rhendersonemptechcom
- Employment Tax Consulting- UI Claims Management- Credits- Talent Management- Electronic I-9- Verification of Employment
FICA Changes ndash APA
wwwemptechcom | 18005183874 | infoemptechcom
APA response to IRS on the FICA
- affirming all except certain ER-side only filings
FUTA Overview
wwwemptechcom | 18005183874 | infoemptechcom
bull Federal Unemployment Tax (FUTA) designed to help fund UI Admin ndash codified under USC Title 26 Chap 32
bull 6 rate with fixed $7000 taxable wage base effective rate after applying 54 credit is 06
bull Due to state needs to borrow Title XII loans from Fed to fund their State UI programs many states triggered FUTA Credit Reductions ndash involuntary repayment
bull States with Title XII loans for 5 years trigger additional reduction via Benefit Cost Reduction (BCR) factor
State by State Trust Fund
wwwemptechcom | 18005183874 | infoemptechcom
Red = borrowing as of 8415 Brown = using ER-financed bonds to repay Title XII loansYellow = less than 6 mos of positive balances Green = more than 6 mos of benefits
State Trust Fund Solvency as of August 2015 Map taken from July 2015 SUCAP Report based on US DOL UI data quarterly summary charts amp SUCAP Reports
State Solvency Health Update
wwwemptechcom | 18005183874 | infoemptechcom
US DOL ETA UI Actuary Report (July 2015)
bull Projected 2015 FUTA Rates ndash ldquopotentialrdquo BCR add-ons for 8 states
bull State Trust Fund Solvency vs US DOL Guidelines ndash only 17 states meet guidelines
bull In 2010 $196B of $42B in state UI debt (466) was private market
bull By 2014 $892B of (then) total $23B (3878) was private market
bull In 2015 new federal standards eliminate interest free loans to states with outstanding debts
Obama FY 2016 Budget
wwwemptechcom | 18005183874 | infoemptechcom
The FY 2016 Budget Key Pointsbull Increase FUTA tax rate from 06 to 08 in CY 2016
(effectively increases base from $42 to $56 per EE for 2016 in all states - 3333 increase)
bull States would be required to increase unemployment tax bases from as little as $7000 to $40000 (471 increase) Forces states to dramatically cut contribution rates or pass astronomical UI tax increase to ERs
bull In 2017 States would be reqrsquod to have a min tax equiv to 0175 on a $40000 tax base ($70 per EE) that would increase indefinitely based on avg wage increases
UI Tax Rate Trends
wwwemptechcom | 18005183874 | infoemptechcom
but average taxable wage bases continue to increase (up over $17K in 2014)
Source DOL
FUTA Credit Reduction amp ldquoBCRrdquo
wwwemptechcom | 18005183874 | infoemptechcom
Potential 2015 FUTA Credit Reductions from US DOL (July 2015)
UTax
These states had Title XII advance balances on Jan 1 2015 and are potentially subject to a reduction in FUTA credit on their IRS Form 940 for 2015 if the outstanding advance is not repaid by Nov 10 2015
2015 Potential Applied ForCredit Reduction 2015 Potential 2015 Potential 2015 Potential Total FUTA Credit Reduction
State(1) Due to Outstanding Advance(2) 27 add-on (3) BCR add-on(4) Credit Reduction(5) Relief (6)
California 15 00 14 29 BCR WaiverConnecticut 15 00 06 21Indiana 18 00 09 27 BCR WaiverKentucky 15 00 06 21 BCR Waiver FUTA CapNew York 15 00 00 15North Carolina 15 00 08 23Ohio 15 00 11 26 BCR WaiverSouth Carolina 18 00 03 21Virgin Islands 15 00 16 31 BCR Waiver
(1) These states have passed at least two consecutive January 1s with an outstanding Federal advance and are therefore subject to a FUTA credit reduction
(2) For each Jan 1 a state passes with an outstanding advance following the second one ERs in the state are subject to an additional 03 reduction in FUTA credit
(3) Following their third Jan 1 with an outstanding advance states are subject to an additional FUTA credit reduction called the 27 Add-on A description of this add-on is in FUTA 3302(c)(2)(B)
(4) These states are also potentially subject to the Benefit Cost Rate (BCR) additional credit reduction formula for having passed five consecutive Jan 1s with an outstanding Federal advance- FUTA section 3302 (c) (2)
(5) The FUTA credit reduction for 2015 is calculated by adding the credit reduction due to having an outstanding advance plus the reduction from the 27 add-on or the BCR add-on which if it is zero is replaced by the 27 add-on
(6) A state may apply for relief from a reduction in its FUTA credit under section FUTA 3302 The deadline for application of relief for all types was July 1 2015
(7) Final determination of the FUTA credit reduction will not be made until following the Nov 10 2015 repayment deadline
UI Tax Rate Determination
wwwemptechcom | 18005183874 | infoemptechcom
bull Primary Determination methodso Reserve Ratio (UI reserve balance avg taxable payroll)o Benefit Ratio (UI benefit charges taxable payroll)
bull New Employer UI Rate
bull Min ndash Max UI rateso Max UI rate no less than 54
bull SuccessionbullUI Transfer of Experience
bullState Rate Schedule adjustmentso Varies by overall UI trust fund balance
bull UI Voluntary Contributions
The Empire State (NY) UI Overview
wwwemptechcom | 18005183874 | infoemptechcom
bull Unemployment Rate (July 2015) 55
bull Trust Fund Positive Balance (July 2015) $8074000
bull rsquo15 Taxable Wage Base $10500 (and rising)
bull lsquo15 UI Tax Rates 21 min ndash 99 maxo 41 New ER UI
bull Paid back Title XII Federal UI loans
bull lsquo15 MinMax Weekly Benefit $100$420 (and rising)
bull State Information Data Exchange System (ldquoSIDESrdquo) UP
bull Voluntary Contribution state
The Garden State (NJ) UI Overview
wwwemptechcom | 18005183874 | infoemptechcom
bull Unemployment Rate (July 2015) 61
bull Trust Fund Positive Balance (July 2015) $255988000
bull lsquo15 Taxable Wage Base $32000
bull FY16 UI Tax Rates 12 min ndash 7 maxo New ER UI rate 34
bull lsquo15 Min Max Weekly Benefit $99-646
bull Voluntary Contribution state
The Garden State (NJ) UI Updates
wwwemptechcom | 18005183874 | infoemptechcom
Signed legislation 2014 thru July 2015
bull NJ AB3812 - requires electronic notification of death record to Dept to reduce UI fraud
bull NJ AB4189 - modifies short-time unemployment benefit lawbull NJ SB3097 - permits employee leasing companies to use ELC
experience rate or that of member companiesbull NJ SB1622 - withholding of state payments to vendors for delinquent
UI and disability taxesbull NJ SB2414 - amends DOLWD personnel access to UI claims receipt
and processing systembull NJ SB2082 - amends UI eligibility when claimant leaves work amp
subsequently laid off from work
The Constitution State (CT) UI Overview
wwwemptechcom | 18005183874 | infoemptechcom
bull Unemployment Rate (July 2015) 57
bull Trust Fund Loan Balance (Sept 2015) -$102M
bull rsquo15 Taxable Wage Base $15000
bull lsquo15 Tax Rates 19 min ndash 68 maxo New ER UI Rate 49
bull lsquo15 Potential FUTA Tax rate 21o 15 Basic FCR + 06 BCR add-ono Potential total FUTA cost per EE $189
bull rsquo15 MinMax Weekly Benefit $15 - 669
The Constitution State (CT) UI Updates
wwwemptechcom | 18005183874 | infoemptechcom
bullCT HB6707 Signed by Governor 7215 prevents ERrsquos base period account from being charged for unemployment benefits if claimant has been discharged or suspended because claimant lost their operatorrsquos license as a result of failing a drug alcohol test while off duty
bull CT is the only state subject to BCR add on (06) that has not applied for a waiver
o This is the second year CT has neglected to request a waiver
The Golden State (CA) UI Overview
wwwemptechcom | 18005183874 | infoemptechcom
bull Unemployment Rate (July 2015) 63
bull Trust Fund Loan Balance (Sept 2015) - $58B
bull lsquo15 Taxable Wage Base $7000
bull lsquo15 Tax Rates 15 min ndash 62 max o Schedule ldquoF+rdquo o 34 New ER rate
bull lsquo15 Potential FUTA Tax Rate 29o 15 Basic FCR + 14 BCR add ono $203 addtrsquol FUTA cost due to credit reduction and BCR
bull lsquo15 MinMax Weekly Benefit $40-450
The Golden State (CA) UI Updates
wwwemptechcom | 18005183874 | infoemptechcom
bull California is subject to the BCR add-on but has applied for a waivero Estimated BCR add on for 2015 is 14 o If the BCR waiver is approved the net cost is potentially $147 per
EE otherwise it could be $245 per EEo Final determination will be made by DOL after Nov 10 2015
bull Uber amp Lyft decisions on worker classification o EE vs independent contractor
bull UI appeals hearings ndash SB 1314 enacted extends deadline to file appeals
bull Administrative changes to law on UI Transfer of Experience when assets are acquired
bull SB 1131 enacted - members of LLC are not employees
The Buckeye State (OH) UI Overview
wwwemptechcom | 18005183874 | infoemptechcom
bull Unemployment Rate (July 2015) 5
bull Trust Fund Loan Balance (Sept 2015) - $875M
bull lsquo15 Taxable Wage Base $9000
bull lsquo15 Tax Rates 3 min ndash 108 max o New ER UI Tax Rate 27
bull lsquo15 Potential FUTA Tax Rate 26o 15 Basic FCR + 11 BCR add ono $182 addtrsquol FUTA cost due to credit reduction and BCR rsquo15
bull Voluntary Contribution state
Key Federal UI Legislation
wwwemptechcom | 18005183874 | infoemptechcom
bull 2004 SUTA Dumping Act
bull 2011 TAAE UI Integrity Act (Sec 252)
bull 2012 ATRAbull EE SS tax rate return to normal
Audience Questions
wwwemptechcom | 18005183874 | infoemptechcom
bull Changes in ET Structure
bull MampA Activity
2004 SUTA Dumping Prevention Act
wwwemptechcom | 18005183874 | infoemptechcom
bull SUTA Dumping (aka ldquounemployment tax avoidancerdquo) occurs by shifting EEs to a less-taxed entity to avoid paying a higher UI tax rate
bull Migration of EEs between legal entities (MampA consolidation etc) may trigger time-sensitive mandatory compliance reporting ndash misunderstood amp often missed
bull Penalties for missing or incorrect reporting can include max UI ratings civil ampor criminal penaltiesbull SUTA Dumping Detection Software for enforcement
bull Read Employerrsquos MampA ldquoTo Dordquo List
2011 Federal Act ndash UI Integrity
wwwemptechcom | 18005183874 | infoemptechcom
bull Follow on to 2009 Executive Order to reduce improper UI payments
bull Under UI Integrity rules states must not relieve employers of charges when they fail to respond timely or adequately to UI claims related agency requests bull Pattern of Failure as little as two instances
bull Employers cannot collude with employee to misuse unemployment claim system
bull Each state has unique rules method of enforcement being formulated
ldquoPattern of Failurerdquo Financial Impact Example
wwwemptechcom | 18005183874 | infoemptechcom
Case Study
bull ER With 100 SeparationsYr ldquoPattern of Failurerdquo classification bull Benefit$ paid to claimant prior to successful Appeal by ER
FACTORS FIGURESWeekly benefit amount Assume $300
Time to appeal 8 weeks
of claims lost on initial determination amp won by ER on Appeal
10 (out of 100 total separations)
Charge to ER UI account $24000 ($2400 x 10 claims) now NON-RECOVERABLE due to ldquoPattern of Failurerdquo
Additional Exposure Negative Impact bull May raise AUDIT RISK for other UI areas
bull May elevate ER experience rating
ldquoPattern of Failurerdquo Example Letter
wwwemptechcom | 18005183874 | infoemptechcom
Compliance amp Enforcement UI Integrity
wwwemptechcom | 18005183874 | infoemptechcom
bull Unemployment Claims ldquoTriggerrdquondash Claims filings from an EE associated with a MampA event may
trigger an ldquoevaluationrdquo of the succession reporting due to confusion surrounded which ER responsible for benefit charge
bull ldquoSDDSrdquo (SUTA Dumping Detection Software) ndash Many States using SDDS to ldquocatchrdquo EE migrations ndash Flags accounts for review to see if UI succession reporting
completed
bull ldquoQETPrdquo (Questionable Employment Tax Practices)ndash Under QETP IRS and 37 states sharing information and
specifically focusing on ET for auditsndash As of mid-2012 QETP has resulted in audits of 11000
employers
Audit Alert Inter-Agency Info Sharing
wwwemptechcom | 18005183874 | infoemptechcom
bull Questionable Employment Tax Practices ldquoQETPrdquo Initiativebull 37 States amp IRSbull 12000+ business examined thru lsquo12
bull Fed amp state info sharing data mining amp cross-agency task forces
bull Significant focus on worker classification
bull Significant incentives to states to aggressively audit
UI Tax Optimization Focus
wwwemptechcom | 18005183874 | infoemptechcom
bull UI Cost Control
bull UI Retrospective Review
UI Benefit Charges Material Expense
wwwemptechcom | 18005183874 | infoemptechcom
UTax
UI Integrity Oversight Plan
wwwemptechcom | 18005183874 | infoemptechcom
UTax
Designate a Person or Team
Total UI Claims (also by
statelocation)Which claims failed to be
timely adequate
Why Who
Track winloss for protests For
losses why WhoTrack winloss for
appeals Why Who
Impact on experience
rating Calculate cost
to organization
Find amp fix areas of organizational
weakness
UI Integrity Oversight Plan
wwwemptechcom | 18005183874 | infoemptechcom
UTax
ldquoACTrdquoProvide information to UI
agencies that isAccurateComplete
Timely
Best Practices
UI Claims Admin Reporting
wwwemptechcom | 18005183874 | infoemptechcom
ldquoFloat like a butterfly sting like a bee You cannot hit what you cannot seerdquo
Muhammad AliPeriodicReports
Separations
Claims
Win LoseBy Location
Liability Charges
Retro UI Review
wwwemptechcom | 18005183874 | infoemptechcom
General Evaluationbull Contact ALL UI jurisdictions
bull Perform account balancing (per state records) ndash QTR by QTR rearward review
bull Determine what credits found eligible for refund amp if debits found if correct
bull Research for any missing incomplete or untimely reporting on the account
bull Review all MampA past 3 years
bull Help reduce source of potential penalty or increased UI tax expense
Photo credit motone
UI Resources
wwwemptechcom | 18005183874 | infoemptechcom
bull 10 Questions for Internal SUTA Dumping Assessmentbull How Nonprofit Employers Can Reduce UI Costs bull FAQs on Employment Tax Compliance amp Savings in MampA
Go here to download three pages of UI Tips from Emptech
EmptechrsquosUI Tips
Download this one page checklist to assess the state of your UI Claims Administration
Is Your UCM
Broken
Get them here
Get our Top 15 Tips for MampA Tax Treatment
EmptechBlog
Go here to see the latest news on HR Payroll and Employment Tax topics
Thank You
wwwemptechcom | 18005183874 | infoemptechcom
Questions
Contact (203) 738-0545 rhendersonemptechcom
- Employment Tax Consulting- UI Claims Management- Credits- Talent Management- Electronic I-9- Verification of Employment
FUTA Overview
wwwemptechcom | 18005183874 | infoemptechcom
bull Federal Unemployment Tax (FUTA) designed to help fund UI Admin ndash codified under USC Title 26 Chap 32
bull 6 rate with fixed $7000 taxable wage base effective rate after applying 54 credit is 06
bull Due to state needs to borrow Title XII loans from Fed to fund their State UI programs many states triggered FUTA Credit Reductions ndash involuntary repayment
bull States with Title XII loans for 5 years trigger additional reduction via Benefit Cost Reduction (BCR) factor
State by State Trust Fund
wwwemptechcom | 18005183874 | infoemptechcom
Red = borrowing as of 8415 Brown = using ER-financed bonds to repay Title XII loansYellow = less than 6 mos of positive balances Green = more than 6 mos of benefits
State Trust Fund Solvency as of August 2015 Map taken from July 2015 SUCAP Report based on US DOL UI data quarterly summary charts amp SUCAP Reports
State Solvency Health Update
wwwemptechcom | 18005183874 | infoemptechcom
US DOL ETA UI Actuary Report (July 2015)
bull Projected 2015 FUTA Rates ndash ldquopotentialrdquo BCR add-ons for 8 states
bull State Trust Fund Solvency vs US DOL Guidelines ndash only 17 states meet guidelines
bull In 2010 $196B of $42B in state UI debt (466) was private market
bull By 2014 $892B of (then) total $23B (3878) was private market
bull In 2015 new federal standards eliminate interest free loans to states with outstanding debts
Obama FY 2016 Budget
wwwemptechcom | 18005183874 | infoemptechcom
The FY 2016 Budget Key Pointsbull Increase FUTA tax rate from 06 to 08 in CY 2016
(effectively increases base from $42 to $56 per EE for 2016 in all states - 3333 increase)
bull States would be required to increase unemployment tax bases from as little as $7000 to $40000 (471 increase) Forces states to dramatically cut contribution rates or pass astronomical UI tax increase to ERs
bull In 2017 States would be reqrsquod to have a min tax equiv to 0175 on a $40000 tax base ($70 per EE) that would increase indefinitely based on avg wage increases
UI Tax Rate Trends
wwwemptechcom | 18005183874 | infoemptechcom
but average taxable wage bases continue to increase (up over $17K in 2014)
Source DOL
FUTA Credit Reduction amp ldquoBCRrdquo
wwwemptechcom | 18005183874 | infoemptechcom
Potential 2015 FUTA Credit Reductions from US DOL (July 2015)
UTax
These states had Title XII advance balances on Jan 1 2015 and are potentially subject to a reduction in FUTA credit on their IRS Form 940 for 2015 if the outstanding advance is not repaid by Nov 10 2015
2015 Potential Applied ForCredit Reduction 2015 Potential 2015 Potential 2015 Potential Total FUTA Credit Reduction
State(1) Due to Outstanding Advance(2) 27 add-on (3) BCR add-on(4) Credit Reduction(5) Relief (6)
California 15 00 14 29 BCR WaiverConnecticut 15 00 06 21Indiana 18 00 09 27 BCR WaiverKentucky 15 00 06 21 BCR Waiver FUTA CapNew York 15 00 00 15North Carolina 15 00 08 23Ohio 15 00 11 26 BCR WaiverSouth Carolina 18 00 03 21Virgin Islands 15 00 16 31 BCR Waiver
(1) These states have passed at least two consecutive January 1s with an outstanding Federal advance and are therefore subject to a FUTA credit reduction
(2) For each Jan 1 a state passes with an outstanding advance following the second one ERs in the state are subject to an additional 03 reduction in FUTA credit
(3) Following their third Jan 1 with an outstanding advance states are subject to an additional FUTA credit reduction called the 27 Add-on A description of this add-on is in FUTA 3302(c)(2)(B)
(4) These states are also potentially subject to the Benefit Cost Rate (BCR) additional credit reduction formula for having passed five consecutive Jan 1s with an outstanding Federal advance- FUTA section 3302 (c) (2)
(5) The FUTA credit reduction for 2015 is calculated by adding the credit reduction due to having an outstanding advance plus the reduction from the 27 add-on or the BCR add-on which if it is zero is replaced by the 27 add-on
(6) A state may apply for relief from a reduction in its FUTA credit under section FUTA 3302 The deadline for application of relief for all types was July 1 2015
(7) Final determination of the FUTA credit reduction will not be made until following the Nov 10 2015 repayment deadline
UI Tax Rate Determination
wwwemptechcom | 18005183874 | infoemptechcom
bull Primary Determination methodso Reserve Ratio (UI reserve balance avg taxable payroll)o Benefit Ratio (UI benefit charges taxable payroll)
bull New Employer UI Rate
bull Min ndash Max UI rateso Max UI rate no less than 54
bull SuccessionbullUI Transfer of Experience
bullState Rate Schedule adjustmentso Varies by overall UI trust fund balance
bull UI Voluntary Contributions
The Empire State (NY) UI Overview
wwwemptechcom | 18005183874 | infoemptechcom
bull Unemployment Rate (July 2015) 55
bull Trust Fund Positive Balance (July 2015) $8074000
bull rsquo15 Taxable Wage Base $10500 (and rising)
bull lsquo15 UI Tax Rates 21 min ndash 99 maxo 41 New ER UI
bull Paid back Title XII Federal UI loans
bull lsquo15 MinMax Weekly Benefit $100$420 (and rising)
bull State Information Data Exchange System (ldquoSIDESrdquo) UP
bull Voluntary Contribution state
The Garden State (NJ) UI Overview
wwwemptechcom | 18005183874 | infoemptechcom
bull Unemployment Rate (July 2015) 61
bull Trust Fund Positive Balance (July 2015) $255988000
bull lsquo15 Taxable Wage Base $32000
bull FY16 UI Tax Rates 12 min ndash 7 maxo New ER UI rate 34
bull lsquo15 Min Max Weekly Benefit $99-646
bull Voluntary Contribution state
The Garden State (NJ) UI Updates
wwwemptechcom | 18005183874 | infoemptechcom
Signed legislation 2014 thru July 2015
bull NJ AB3812 - requires electronic notification of death record to Dept to reduce UI fraud
bull NJ AB4189 - modifies short-time unemployment benefit lawbull NJ SB3097 - permits employee leasing companies to use ELC
experience rate or that of member companiesbull NJ SB1622 - withholding of state payments to vendors for delinquent
UI and disability taxesbull NJ SB2414 - amends DOLWD personnel access to UI claims receipt
and processing systembull NJ SB2082 - amends UI eligibility when claimant leaves work amp
subsequently laid off from work
The Constitution State (CT) UI Overview
wwwemptechcom | 18005183874 | infoemptechcom
bull Unemployment Rate (July 2015) 57
bull Trust Fund Loan Balance (Sept 2015) -$102M
bull rsquo15 Taxable Wage Base $15000
bull lsquo15 Tax Rates 19 min ndash 68 maxo New ER UI Rate 49
bull lsquo15 Potential FUTA Tax rate 21o 15 Basic FCR + 06 BCR add-ono Potential total FUTA cost per EE $189
bull rsquo15 MinMax Weekly Benefit $15 - 669
The Constitution State (CT) UI Updates
wwwemptechcom | 18005183874 | infoemptechcom
bullCT HB6707 Signed by Governor 7215 prevents ERrsquos base period account from being charged for unemployment benefits if claimant has been discharged or suspended because claimant lost their operatorrsquos license as a result of failing a drug alcohol test while off duty
bull CT is the only state subject to BCR add on (06) that has not applied for a waiver
o This is the second year CT has neglected to request a waiver
The Golden State (CA) UI Overview
wwwemptechcom | 18005183874 | infoemptechcom
bull Unemployment Rate (July 2015) 63
bull Trust Fund Loan Balance (Sept 2015) - $58B
bull lsquo15 Taxable Wage Base $7000
bull lsquo15 Tax Rates 15 min ndash 62 max o Schedule ldquoF+rdquo o 34 New ER rate
bull lsquo15 Potential FUTA Tax Rate 29o 15 Basic FCR + 14 BCR add ono $203 addtrsquol FUTA cost due to credit reduction and BCR
bull lsquo15 MinMax Weekly Benefit $40-450
The Golden State (CA) UI Updates
wwwemptechcom | 18005183874 | infoemptechcom
bull California is subject to the BCR add-on but has applied for a waivero Estimated BCR add on for 2015 is 14 o If the BCR waiver is approved the net cost is potentially $147 per
EE otherwise it could be $245 per EEo Final determination will be made by DOL after Nov 10 2015
bull Uber amp Lyft decisions on worker classification o EE vs independent contractor
bull UI appeals hearings ndash SB 1314 enacted extends deadline to file appeals
bull Administrative changes to law on UI Transfer of Experience when assets are acquired
bull SB 1131 enacted - members of LLC are not employees
The Buckeye State (OH) UI Overview
wwwemptechcom | 18005183874 | infoemptechcom
bull Unemployment Rate (July 2015) 5
bull Trust Fund Loan Balance (Sept 2015) - $875M
bull lsquo15 Taxable Wage Base $9000
bull lsquo15 Tax Rates 3 min ndash 108 max o New ER UI Tax Rate 27
bull lsquo15 Potential FUTA Tax Rate 26o 15 Basic FCR + 11 BCR add ono $182 addtrsquol FUTA cost due to credit reduction and BCR rsquo15
bull Voluntary Contribution state
Key Federal UI Legislation
wwwemptechcom | 18005183874 | infoemptechcom
bull 2004 SUTA Dumping Act
bull 2011 TAAE UI Integrity Act (Sec 252)
bull 2012 ATRAbull EE SS tax rate return to normal
Audience Questions
wwwemptechcom | 18005183874 | infoemptechcom
bull Changes in ET Structure
bull MampA Activity
2004 SUTA Dumping Prevention Act
wwwemptechcom | 18005183874 | infoemptechcom
bull SUTA Dumping (aka ldquounemployment tax avoidancerdquo) occurs by shifting EEs to a less-taxed entity to avoid paying a higher UI tax rate
bull Migration of EEs between legal entities (MampA consolidation etc) may trigger time-sensitive mandatory compliance reporting ndash misunderstood amp often missed
bull Penalties for missing or incorrect reporting can include max UI ratings civil ampor criminal penaltiesbull SUTA Dumping Detection Software for enforcement
bull Read Employerrsquos MampA ldquoTo Dordquo List
2011 Federal Act ndash UI Integrity
wwwemptechcom | 18005183874 | infoemptechcom
bull Follow on to 2009 Executive Order to reduce improper UI payments
bull Under UI Integrity rules states must not relieve employers of charges when they fail to respond timely or adequately to UI claims related agency requests bull Pattern of Failure as little as two instances
bull Employers cannot collude with employee to misuse unemployment claim system
bull Each state has unique rules method of enforcement being formulated
ldquoPattern of Failurerdquo Financial Impact Example
wwwemptechcom | 18005183874 | infoemptechcom
Case Study
bull ER With 100 SeparationsYr ldquoPattern of Failurerdquo classification bull Benefit$ paid to claimant prior to successful Appeal by ER
FACTORS FIGURESWeekly benefit amount Assume $300
Time to appeal 8 weeks
of claims lost on initial determination amp won by ER on Appeal
10 (out of 100 total separations)
Charge to ER UI account $24000 ($2400 x 10 claims) now NON-RECOVERABLE due to ldquoPattern of Failurerdquo
Additional Exposure Negative Impact bull May raise AUDIT RISK for other UI areas
bull May elevate ER experience rating
ldquoPattern of Failurerdquo Example Letter
wwwemptechcom | 18005183874 | infoemptechcom
Compliance amp Enforcement UI Integrity
wwwemptechcom | 18005183874 | infoemptechcom
bull Unemployment Claims ldquoTriggerrdquondash Claims filings from an EE associated with a MampA event may
trigger an ldquoevaluationrdquo of the succession reporting due to confusion surrounded which ER responsible for benefit charge
bull ldquoSDDSrdquo (SUTA Dumping Detection Software) ndash Many States using SDDS to ldquocatchrdquo EE migrations ndash Flags accounts for review to see if UI succession reporting
completed
bull ldquoQETPrdquo (Questionable Employment Tax Practices)ndash Under QETP IRS and 37 states sharing information and
specifically focusing on ET for auditsndash As of mid-2012 QETP has resulted in audits of 11000
employers
Audit Alert Inter-Agency Info Sharing
wwwemptechcom | 18005183874 | infoemptechcom
bull Questionable Employment Tax Practices ldquoQETPrdquo Initiativebull 37 States amp IRSbull 12000+ business examined thru lsquo12
bull Fed amp state info sharing data mining amp cross-agency task forces
bull Significant focus on worker classification
bull Significant incentives to states to aggressively audit
UI Tax Optimization Focus
wwwemptechcom | 18005183874 | infoemptechcom
bull UI Cost Control
bull UI Retrospective Review
UI Benefit Charges Material Expense
wwwemptechcom | 18005183874 | infoemptechcom
UTax
UI Integrity Oversight Plan
wwwemptechcom | 18005183874 | infoemptechcom
UTax
Designate a Person or Team
Total UI Claims (also by
statelocation)Which claims failed to be
timely adequate
Why Who
Track winloss for protests For
losses why WhoTrack winloss for
appeals Why Who
Impact on experience
rating Calculate cost
to organization
Find amp fix areas of organizational
weakness
UI Integrity Oversight Plan
wwwemptechcom | 18005183874 | infoemptechcom
UTax
ldquoACTrdquoProvide information to UI
agencies that isAccurateComplete
Timely
Best Practices
UI Claims Admin Reporting
wwwemptechcom | 18005183874 | infoemptechcom
ldquoFloat like a butterfly sting like a bee You cannot hit what you cannot seerdquo
Muhammad AliPeriodicReports
Separations
Claims
Win LoseBy Location
Liability Charges
Retro UI Review
wwwemptechcom | 18005183874 | infoemptechcom
General Evaluationbull Contact ALL UI jurisdictions
bull Perform account balancing (per state records) ndash QTR by QTR rearward review
bull Determine what credits found eligible for refund amp if debits found if correct
bull Research for any missing incomplete or untimely reporting on the account
bull Review all MampA past 3 years
bull Help reduce source of potential penalty or increased UI tax expense
Photo credit motone
UI Resources
wwwemptechcom | 18005183874 | infoemptechcom
bull 10 Questions for Internal SUTA Dumping Assessmentbull How Nonprofit Employers Can Reduce UI Costs bull FAQs on Employment Tax Compliance amp Savings in MampA
Go here to download three pages of UI Tips from Emptech
EmptechrsquosUI Tips
Download this one page checklist to assess the state of your UI Claims Administration
Is Your UCM
Broken
Get them here
Get our Top 15 Tips for MampA Tax Treatment
EmptechBlog
Go here to see the latest news on HR Payroll and Employment Tax topics
Thank You
wwwemptechcom | 18005183874 | infoemptechcom
Questions
Contact (203) 738-0545 rhendersonemptechcom
- Employment Tax Consulting- UI Claims Management- Credits- Talent Management- Electronic I-9- Verification of Employment
State by State Trust Fund
wwwemptechcom | 18005183874 | infoemptechcom
Red = borrowing as of 8415 Brown = using ER-financed bonds to repay Title XII loansYellow = less than 6 mos of positive balances Green = more than 6 mos of benefits
State Trust Fund Solvency as of August 2015 Map taken from July 2015 SUCAP Report based on US DOL UI data quarterly summary charts amp SUCAP Reports
State Solvency Health Update
wwwemptechcom | 18005183874 | infoemptechcom
US DOL ETA UI Actuary Report (July 2015)
bull Projected 2015 FUTA Rates ndash ldquopotentialrdquo BCR add-ons for 8 states
bull State Trust Fund Solvency vs US DOL Guidelines ndash only 17 states meet guidelines
bull In 2010 $196B of $42B in state UI debt (466) was private market
bull By 2014 $892B of (then) total $23B (3878) was private market
bull In 2015 new federal standards eliminate interest free loans to states with outstanding debts
Obama FY 2016 Budget
wwwemptechcom | 18005183874 | infoemptechcom
The FY 2016 Budget Key Pointsbull Increase FUTA tax rate from 06 to 08 in CY 2016
(effectively increases base from $42 to $56 per EE for 2016 in all states - 3333 increase)
bull States would be required to increase unemployment tax bases from as little as $7000 to $40000 (471 increase) Forces states to dramatically cut contribution rates or pass astronomical UI tax increase to ERs
bull In 2017 States would be reqrsquod to have a min tax equiv to 0175 on a $40000 tax base ($70 per EE) that would increase indefinitely based on avg wage increases
UI Tax Rate Trends
wwwemptechcom | 18005183874 | infoemptechcom
but average taxable wage bases continue to increase (up over $17K in 2014)
Source DOL
FUTA Credit Reduction amp ldquoBCRrdquo
wwwemptechcom | 18005183874 | infoemptechcom
Potential 2015 FUTA Credit Reductions from US DOL (July 2015)
UTax
These states had Title XII advance balances on Jan 1 2015 and are potentially subject to a reduction in FUTA credit on their IRS Form 940 for 2015 if the outstanding advance is not repaid by Nov 10 2015
2015 Potential Applied ForCredit Reduction 2015 Potential 2015 Potential 2015 Potential Total FUTA Credit Reduction
State(1) Due to Outstanding Advance(2) 27 add-on (3) BCR add-on(4) Credit Reduction(5) Relief (6)
California 15 00 14 29 BCR WaiverConnecticut 15 00 06 21Indiana 18 00 09 27 BCR WaiverKentucky 15 00 06 21 BCR Waiver FUTA CapNew York 15 00 00 15North Carolina 15 00 08 23Ohio 15 00 11 26 BCR WaiverSouth Carolina 18 00 03 21Virgin Islands 15 00 16 31 BCR Waiver
(1) These states have passed at least two consecutive January 1s with an outstanding Federal advance and are therefore subject to a FUTA credit reduction
(2) For each Jan 1 a state passes with an outstanding advance following the second one ERs in the state are subject to an additional 03 reduction in FUTA credit
(3) Following their third Jan 1 with an outstanding advance states are subject to an additional FUTA credit reduction called the 27 Add-on A description of this add-on is in FUTA 3302(c)(2)(B)
(4) These states are also potentially subject to the Benefit Cost Rate (BCR) additional credit reduction formula for having passed five consecutive Jan 1s with an outstanding Federal advance- FUTA section 3302 (c) (2)
(5) The FUTA credit reduction for 2015 is calculated by adding the credit reduction due to having an outstanding advance plus the reduction from the 27 add-on or the BCR add-on which if it is zero is replaced by the 27 add-on
(6) A state may apply for relief from a reduction in its FUTA credit under section FUTA 3302 The deadline for application of relief for all types was July 1 2015
(7) Final determination of the FUTA credit reduction will not be made until following the Nov 10 2015 repayment deadline
UI Tax Rate Determination
wwwemptechcom | 18005183874 | infoemptechcom
bull Primary Determination methodso Reserve Ratio (UI reserve balance avg taxable payroll)o Benefit Ratio (UI benefit charges taxable payroll)
bull New Employer UI Rate
bull Min ndash Max UI rateso Max UI rate no less than 54
bull SuccessionbullUI Transfer of Experience
bullState Rate Schedule adjustmentso Varies by overall UI trust fund balance
bull UI Voluntary Contributions
The Empire State (NY) UI Overview
wwwemptechcom | 18005183874 | infoemptechcom
bull Unemployment Rate (July 2015) 55
bull Trust Fund Positive Balance (July 2015) $8074000
bull rsquo15 Taxable Wage Base $10500 (and rising)
bull lsquo15 UI Tax Rates 21 min ndash 99 maxo 41 New ER UI
bull Paid back Title XII Federal UI loans
bull lsquo15 MinMax Weekly Benefit $100$420 (and rising)
bull State Information Data Exchange System (ldquoSIDESrdquo) UP
bull Voluntary Contribution state
The Garden State (NJ) UI Overview
wwwemptechcom | 18005183874 | infoemptechcom
bull Unemployment Rate (July 2015) 61
bull Trust Fund Positive Balance (July 2015) $255988000
bull lsquo15 Taxable Wage Base $32000
bull FY16 UI Tax Rates 12 min ndash 7 maxo New ER UI rate 34
bull lsquo15 Min Max Weekly Benefit $99-646
bull Voluntary Contribution state
The Garden State (NJ) UI Updates
wwwemptechcom | 18005183874 | infoemptechcom
Signed legislation 2014 thru July 2015
bull NJ AB3812 - requires electronic notification of death record to Dept to reduce UI fraud
bull NJ AB4189 - modifies short-time unemployment benefit lawbull NJ SB3097 - permits employee leasing companies to use ELC
experience rate or that of member companiesbull NJ SB1622 - withholding of state payments to vendors for delinquent
UI and disability taxesbull NJ SB2414 - amends DOLWD personnel access to UI claims receipt
and processing systembull NJ SB2082 - amends UI eligibility when claimant leaves work amp
subsequently laid off from work
The Constitution State (CT) UI Overview
wwwemptechcom | 18005183874 | infoemptechcom
bull Unemployment Rate (July 2015) 57
bull Trust Fund Loan Balance (Sept 2015) -$102M
bull rsquo15 Taxable Wage Base $15000
bull lsquo15 Tax Rates 19 min ndash 68 maxo New ER UI Rate 49
bull lsquo15 Potential FUTA Tax rate 21o 15 Basic FCR + 06 BCR add-ono Potential total FUTA cost per EE $189
bull rsquo15 MinMax Weekly Benefit $15 - 669
The Constitution State (CT) UI Updates
wwwemptechcom | 18005183874 | infoemptechcom
bullCT HB6707 Signed by Governor 7215 prevents ERrsquos base period account from being charged for unemployment benefits if claimant has been discharged or suspended because claimant lost their operatorrsquos license as a result of failing a drug alcohol test while off duty
bull CT is the only state subject to BCR add on (06) that has not applied for a waiver
o This is the second year CT has neglected to request a waiver
The Golden State (CA) UI Overview
wwwemptechcom | 18005183874 | infoemptechcom
bull Unemployment Rate (July 2015) 63
bull Trust Fund Loan Balance (Sept 2015) - $58B
bull lsquo15 Taxable Wage Base $7000
bull lsquo15 Tax Rates 15 min ndash 62 max o Schedule ldquoF+rdquo o 34 New ER rate
bull lsquo15 Potential FUTA Tax Rate 29o 15 Basic FCR + 14 BCR add ono $203 addtrsquol FUTA cost due to credit reduction and BCR
bull lsquo15 MinMax Weekly Benefit $40-450
The Golden State (CA) UI Updates
wwwemptechcom | 18005183874 | infoemptechcom
bull California is subject to the BCR add-on but has applied for a waivero Estimated BCR add on for 2015 is 14 o If the BCR waiver is approved the net cost is potentially $147 per
EE otherwise it could be $245 per EEo Final determination will be made by DOL after Nov 10 2015
bull Uber amp Lyft decisions on worker classification o EE vs independent contractor
bull UI appeals hearings ndash SB 1314 enacted extends deadline to file appeals
bull Administrative changes to law on UI Transfer of Experience when assets are acquired
bull SB 1131 enacted - members of LLC are not employees
The Buckeye State (OH) UI Overview
wwwemptechcom | 18005183874 | infoemptechcom
bull Unemployment Rate (July 2015) 5
bull Trust Fund Loan Balance (Sept 2015) - $875M
bull lsquo15 Taxable Wage Base $9000
bull lsquo15 Tax Rates 3 min ndash 108 max o New ER UI Tax Rate 27
bull lsquo15 Potential FUTA Tax Rate 26o 15 Basic FCR + 11 BCR add ono $182 addtrsquol FUTA cost due to credit reduction and BCR rsquo15
bull Voluntary Contribution state
Key Federal UI Legislation
wwwemptechcom | 18005183874 | infoemptechcom
bull 2004 SUTA Dumping Act
bull 2011 TAAE UI Integrity Act (Sec 252)
bull 2012 ATRAbull EE SS tax rate return to normal
Audience Questions
wwwemptechcom | 18005183874 | infoemptechcom
bull Changes in ET Structure
bull MampA Activity
2004 SUTA Dumping Prevention Act
wwwemptechcom | 18005183874 | infoemptechcom
bull SUTA Dumping (aka ldquounemployment tax avoidancerdquo) occurs by shifting EEs to a less-taxed entity to avoid paying a higher UI tax rate
bull Migration of EEs between legal entities (MampA consolidation etc) may trigger time-sensitive mandatory compliance reporting ndash misunderstood amp often missed
bull Penalties for missing or incorrect reporting can include max UI ratings civil ampor criminal penaltiesbull SUTA Dumping Detection Software for enforcement
bull Read Employerrsquos MampA ldquoTo Dordquo List
2011 Federal Act ndash UI Integrity
wwwemptechcom | 18005183874 | infoemptechcom
bull Follow on to 2009 Executive Order to reduce improper UI payments
bull Under UI Integrity rules states must not relieve employers of charges when they fail to respond timely or adequately to UI claims related agency requests bull Pattern of Failure as little as two instances
bull Employers cannot collude with employee to misuse unemployment claim system
bull Each state has unique rules method of enforcement being formulated
ldquoPattern of Failurerdquo Financial Impact Example
wwwemptechcom | 18005183874 | infoemptechcom
Case Study
bull ER With 100 SeparationsYr ldquoPattern of Failurerdquo classification bull Benefit$ paid to claimant prior to successful Appeal by ER
FACTORS FIGURESWeekly benefit amount Assume $300
Time to appeal 8 weeks
of claims lost on initial determination amp won by ER on Appeal
10 (out of 100 total separations)
Charge to ER UI account $24000 ($2400 x 10 claims) now NON-RECOVERABLE due to ldquoPattern of Failurerdquo
Additional Exposure Negative Impact bull May raise AUDIT RISK for other UI areas
bull May elevate ER experience rating
ldquoPattern of Failurerdquo Example Letter
wwwemptechcom | 18005183874 | infoemptechcom
Compliance amp Enforcement UI Integrity
wwwemptechcom | 18005183874 | infoemptechcom
bull Unemployment Claims ldquoTriggerrdquondash Claims filings from an EE associated with a MampA event may
trigger an ldquoevaluationrdquo of the succession reporting due to confusion surrounded which ER responsible for benefit charge
bull ldquoSDDSrdquo (SUTA Dumping Detection Software) ndash Many States using SDDS to ldquocatchrdquo EE migrations ndash Flags accounts for review to see if UI succession reporting
completed
bull ldquoQETPrdquo (Questionable Employment Tax Practices)ndash Under QETP IRS and 37 states sharing information and
specifically focusing on ET for auditsndash As of mid-2012 QETP has resulted in audits of 11000
employers
Audit Alert Inter-Agency Info Sharing
wwwemptechcom | 18005183874 | infoemptechcom
bull Questionable Employment Tax Practices ldquoQETPrdquo Initiativebull 37 States amp IRSbull 12000+ business examined thru lsquo12
bull Fed amp state info sharing data mining amp cross-agency task forces
bull Significant focus on worker classification
bull Significant incentives to states to aggressively audit
UI Tax Optimization Focus
wwwemptechcom | 18005183874 | infoemptechcom
bull UI Cost Control
bull UI Retrospective Review
UI Benefit Charges Material Expense
wwwemptechcom | 18005183874 | infoemptechcom
UTax
UI Integrity Oversight Plan
wwwemptechcom | 18005183874 | infoemptechcom
UTax
Designate a Person or Team
Total UI Claims (also by
statelocation)Which claims failed to be
timely adequate
Why Who
Track winloss for protests For
losses why WhoTrack winloss for
appeals Why Who
Impact on experience
rating Calculate cost
to organization
Find amp fix areas of organizational
weakness
UI Integrity Oversight Plan
wwwemptechcom | 18005183874 | infoemptechcom
UTax
ldquoACTrdquoProvide information to UI
agencies that isAccurateComplete
Timely
Best Practices
UI Claims Admin Reporting
wwwemptechcom | 18005183874 | infoemptechcom
ldquoFloat like a butterfly sting like a bee You cannot hit what you cannot seerdquo
Muhammad AliPeriodicReports
Separations
Claims
Win LoseBy Location
Liability Charges
Retro UI Review
wwwemptechcom | 18005183874 | infoemptechcom
General Evaluationbull Contact ALL UI jurisdictions
bull Perform account balancing (per state records) ndash QTR by QTR rearward review
bull Determine what credits found eligible for refund amp if debits found if correct
bull Research for any missing incomplete or untimely reporting on the account
bull Review all MampA past 3 years
bull Help reduce source of potential penalty or increased UI tax expense
Photo credit motone
UI Resources
wwwemptechcom | 18005183874 | infoemptechcom
bull 10 Questions for Internal SUTA Dumping Assessmentbull How Nonprofit Employers Can Reduce UI Costs bull FAQs on Employment Tax Compliance amp Savings in MampA
Go here to download three pages of UI Tips from Emptech
EmptechrsquosUI Tips
Download this one page checklist to assess the state of your UI Claims Administration
Is Your UCM
Broken
Get them here
Get our Top 15 Tips for MampA Tax Treatment
EmptechBlog
Go here to see the latest news on HR Payroll and Employment Tax topics
Thank You
wwwemptechcom | 18005183874 | infoemptechcom
Questions
Contact (203) 738-0545 rhendersonemptechcom
- Employment Tax Consulting- UI Claims Management- Credits- Talent Management- Electronic I-9- Verification of Employment
State Solvency Health Update
wwwemptechcom | 18005183874 | infoemptechcom
US DOL ETA UI Actuary Report (July 2015)
bull Projected 2015 FUTA Rates ndash ldquopotentialrdquo BCR add-ons for 8 states
bull State Trust Fund Solvency vs US DOL Guidelines ndash only 17 states meet guidelines
bull In 2010 $196B of $42B in state UI debt (466) was private market
bull By 2014 $892B of (then) total $23B (3878) was private market
bull In 2015 new federal standards eliminate interest free loans to states with outstanding debts
Obama FY 2016 Budget
wwwemptechcom | 18005183874 | infoemptechcom
The FY 2016 Budget Key Pointsbull Increase FUTA tax rate from 06 to 08 in CY 2016
(effectively increases base from $42 to $56 per EE for 2016 in all states - 3333 increase)
bull States would be required to increase unemployment tax bases from as little as $7000 to $40000 (471 increase) Forces states to dramatically cut contribution rates or pass astronomical UI tax increase to ERs
bull In 2017 States would be reqrsquod to have a min tax equiv to 0175 on a $40000 tax base ($70 per EE) that would increase indefinitely based on avg wage increases
UI Tax Rate Trends
wwwemptechcom | 18005183874 | infoemptechcom
but average taxable wage bases continue to increase (up over $17K in 2014)
Source DOL
FUTA Credit Reduction amp ldquoBCRrdquo
wwwemptechcom | 18005183874 | infoemptechcom
Potential 2015 FUTA Credit Reductions from US DOL (July 2015)
UTax
These states had Title XII advance balances on Jan 1 2015 and are potentially subject to a reduction in FUTA credit on their IRS Form 940 for 2015 if the outstanding advance is not repaid by Nov 10 2015
2015 Potential Applied ForCredit Reduction 2015 Potential 2015 Potential 2015 Potential Total FUTA Credit Reduction
State(1) Due to Outstanding Advance(2) 27 add-on (3) BCR add-on(4) Credit Reduction(5) Relief (6)
California 15 00 14 29 BCR WaiverConnecticut 15 00 06 21Indiana 18 00 09 27 BCR WaiverKentucky 15 00 06 21 BCR Waiver FUTA CapNew York 15 00 00 15North Carolina 15 00 08 23Ohio 15 00 11 26 BCR WaiverSouth Carolina 18 00 03 21Virgin Islands 15 00 16 31 BCR Waiver
(1) These states have passed at least two consecutive January 1s with an outstanding Federal advance and are therefore subject to a FUTA credit reduction
(2) For each Jan 1 a state passes with an outstanding advance following the second one ERs in the state are subject to an additional 03 reduction in FUTA credit
(3) Following their third Jan 1 with an outstanding advance states are subject to an additional FUTA credit reduction called the 27 Add-on A description of this add-on is in FUTA 3302(c)(2)(B)
(4) These states are also potentially subject to the Benefit Cost Rate (BCR) additional credit reduction formula for having passed five consecutive Jan 1s with an outstanding Federal advance- FUTA section 3302 (c) (2)
(5) The FUTA credit reduction for 2015 is calculated by adding the credit reduction due to having an outstanding advance plus the reduction from the 27 add-on or the BCR add-on which if it is zero is replaced by the 27 add-on
(6) A state may apply for relief from a reduction in its FUTA credit under section FUTA 3302 The deadline for application of relief for all types was July 1 2015
(7) Final determination of the FUTA credit reduction will not be made until following the Nov 10 2015 repayment deadline
UI Tax Rate Determination
wwwemptechcom | 18005183874 | infoemptechcom
bull Primary Determination methodso Reserve Ratio (UI reserve balance avg taxable payroll)o Benefit Ratio (UI benefit charges taxable payroll)
bull New Employer UI Rate
bull Min ndash Max UI rateso Max UI rate no less than 54
bull SuccessionbullUI Transfer of Experience
bullState Rate Schedule adjustmentso Varies by overall UI trust fund balance
bull UI Voluntary Contributions
The Empire State (NY) UI Overview
wwwemptechcom | 18005183874 | infoemptechcom
bull Unemployment Rate (July 2015) 55
bull Trust Fund Positive Balance (July 2015) $8074000
bull rsquo15 Taxable Wage Base $10500 (and rising)
bull lsquo15 UI Tax Rates 21 min ndash 99 maxo 41 New ER UI
bull Paid back Title XII Federal UI loans
bull lsquo15 MinMax Weekly Benefit $100$420 (and rising)
bull State Information Data Exchange System (ldquoSIDESrdquo) UP
bull Voluntary Contribution state
The Garden State (NJ) UI Overview
wwwemptechcom | 18005183874 | infoemptechcom
bull Unemployment Rate (July 2015) 61
bull Trust Fund Positive Balance (July 2015) $255988000
bull lsquo15 Taxable Wage Base $32000
bull FY16 UI Tax Rates 12 min ndash 7 maxo New ER UI rate 34
bull lsquo15 Min Max Weekly Benefit $99-646
bull Voluntary Contribution state
The Garden State (NJ) UI Updates
wwwemptechcom | 18005183874 | infoemptechcom
Signed legislation 2014 thru July 2015
bull NJ AB3812 - requires electronic notification of death record to Dept to reduce UI fraud
bull NJ AB4189 - modifies short-time unemployment benefit lawbull NJ SB3097 - permits employee leasing companies to use ELC
experience rate or that of member companiesbull NJ SB1622 - withholding of state payments to vendors for delinquent
UI and disability taxesbull NJ SB2414 - amends DOLWD personnel access to UI claims receipt
and processing systembull NJ SB2082 - amends UI eligibility when claimant leaves work amp
subsequently laid off from work
The Constitution State (CT) UI Overview
wwwemptechcom | 18005183874 | infoemptechcom
bull Unemployment Rate (July 2015) 57
bull Trust Fund Loan Balance (Sept 2015) -$102M
bull rsquo15 Taxable Wage Base $15000
bull lsquo15 Tax Rates 19 min ndash 68 maxo New ER UI Rate 49
bull lsquo15 Potential FUTA Tax rate 21o 15 Basic FCR + 06 BCR add-ono Potential total FUTA cost per EE $189
bull rsquo15 MinMax Weekly Benefit $15 - 669
The Constitution State (CT) UI Updates
wwwemptechcom | 18005183874 | infoemptechcom
bullCT HB6707 Signed by Governor 7215 prevents ERrsquos base period account from being charged for unemployment benefits if claimant has been discharged or suspended because claimant lost their operatorrsquos license as a result of failing a drug alcohol test while off duty
bull CT is the only state subject to BCR add on (06) that has not applied for a waiver
o This is the second year CT has neglected to request a waiver
The Golden State (CA) UI Overview
wwwemptechcom | 18005183874 | infoemptechcom
bull Unemployment Rate (July 2015) 63
bull Trust Fund Loan Balance (Sept 2015) - $58B
bull lsquo15 Taxable Wage Base $7000
bull lsquo15 Tax Rates 15 min ndash 62 max o Schedule ldquoF+rdquo o 34 New ER rate
bull lsquo15 Potential FUTA Tax Rate 29o 15 Basic FCR + 14 BCR add ono $203 addtrsquol FUTA cost due to credit reduction and BCR
bull lsquo15 MinMax Weekly Benefit $40-450
The Golden State (CA) UI Updates
wwwemptechcom | 18005183874 | infoemptechcom
bull California is subject to the BCR add-on but has applied for a waivero Estimated BCR add on for 2015 is 14 o If the BCR waiver is approved the net cost is potentially $147 per
EE otherwise it could be $245 per EEo Final determination will be made by DOL after Nov 10 2015
bull Uber amp Lyft decisions on worker classification o EE vs independent contractor
bull UI appeals hearings ndash SB 1314 enacted extends deadline to file appeals
bull Administrative changes to law on UI Transfer of Experience when assets are acquired
bull SB 1131 enacted - members of LLC are not employees
The Buckeye State (OH) UI Overview
wwwemptechcom | 18005183874 | infoemptechcom
bull Unemployment Rate (July 2015) 5
bull Trust Fund Loan Balance (Sept 2015) - $875M
bull lsquo15 Taxable Wage Base $9000
bull lsquo15 Tax Rates 3 min ndash 108 max o New ER UI Tax Rate 27
bull lsquo15 Potential FUTA Tax Rate 26o 15 Basic FCR + 11 BCR add ono $182 addtrsquol FUTA cost due to credit reduction and BCR rsquo15
bull Voluntary Contribution state
Key Federal UI Legislation
wwwemptechcom | 18005183874 | infoemptechcom
bull 2004 SUTA Dumping Act
bull 2011 TAAE UI Integrity Act (Sec 252)
bull 2012 ATRAbull EE SS tax rate return to normal
Audience Questions
wwwemptechcom | 18005183874 | infoemptechcom
bull Changes in ET Structure
bull MampA Activity
2004 SUTA Dumping Prevention Act
wwwemptechcom | 18005183874 | infoemptechcom
bull SUTA Dumping (aka ldquounemployment tax avoidancerdquo) occurs by shifting EEs to a less-taxed entity to avoid paying a higher UI tax rate
bull Migration of EEs between legal entities (MampA consolidation etc) may trigger time-sensitive mandatory compliance reporting ndash misunderstood amp often missed
bull Penalties for missing or incorrect reporting can include max UI ratings civil ampor criminal penaltiesbull SUTA Dumping Detection Software for enforcement
bull Read Employerrsquos MampA ldquoTo Dordquo List
2011 Federal Act ndash UI Integrity
wwwemptechcom | 18005183874 | infoemptechcom
bull Follow on to 2009 Executive Order to reduce improper UI payments
bull Under UI Integrity rules states must not relieve employers of charges when they fail to respond timely or adequately to UI claims related agency requests bull Pattern of Failure as little as two instances
bull Employers cannot collude with employee to misuse unemployment claim system
bull Each state has unique rules method of enforcement being formulated
ldquoPattern of Failurerdquo Financial Impact Example
wwwemptechcom | 18005183874 | infoemptechcom
Case Study
bull ER With 100 SeparationsYr ldquoPattern of Failurerdquo classification bull Benefit$ paid to claimant prior to successful Appeal by ER
FACTORS FIGURESWeekly benefit amount Assume $300
Time to appeal 8 weeks
of claims lost on initial determination amp won by ER on Appeal
10 (out of 100 total separations)
Charge to ER UI account $24000 ($2400 x 10 claims) now NON-RECOVERABLE due to ldquoPattern of Failurerdquo
Additional Exposure Negative Impact bull May raise AUDIT RISK for other UI areas
bull May elevate ER experience rating
ldquoPattern of Failurerdquo Example Letter
wwwemptechcom | 18005183874 | infoemptechcom
Compliance amp Enforcement UI Integrity
wwwemptechcom | 18005183874 | infoemptechcom
bull Unemployment Claims ldquoTriggerrdquondash Claims filings from an EE associated with a MampA event may
trigger an ldquoevaluationrdquo of the succession reporting due to confusion surrounded which ER responsible for benefit charge
bull ldquoSDDSrdquo (SUTA Dumping Detection Software) ndash Many States using SDDS to ldquocatchrdquo EE migrations ndash Flags accounts for review to see if UI succession reporting
completed
bull ldquoQETPrdquo (Questionable Employment Tax Practices)ndash Under QETP IRS and 37 states sharing information and
specifically focusing on ET for auditsndash As of mid-2012 QETP has resulted in audits of 11000
employers
Audit Alert Inter-Agency Info Sharing
wwwemptechcom | 18005183874 | infoemptechcom
bull Questionable Employment Tax Practices ldquoQETPrdquo Initiativebull 37 States amp IRSbull 12000+ business examined thru lsquo12
bull Fed amp state info sharing data mining amp cross-agency task forces
bull Significant focus on worker classification
bull Significant incentives to states to aggressively audit
UI Tax Optimization Focus
wwwemptechcom | 18005183874 | infoemptechcom
bull UI Cost Control
bull UI Retrospective Review
UI Benefit Charges Material Expense
wwwemptechcom | 18005183874 | infoemptechcom
UTax
UI Integrity Oversight Plan
wwwemptechcom | 18005183874 | infoemptechcom
UTax
Designate a Person or Team
Total UI Claims (also by
statelocation)Which claims failed to be
timely adequate
Why Who
Track winloss for protests For
losses why WhoTrack winloss for
appeals Why Who
Impact on experience
rating Calculate cost
to organization
Find amp fix areas of organizational
weakness
UI Integrity Oversight Plan
wwwemptechcom | 18005183874 | infoemptechcom
UTax
ldquoACTrdquoProvide information to UI
agencies that isAccurateComplete
Timely
Best Practices
UI Claims Admin Reporting
wwwemptechcom | 18005183874 | infoemptechcom
ldquoFloat like a butterfly sting like a bee You cannot hit what you cannot seerdquo
Muhammad AliPeriodicReports
Separations
Claims
Win LoseBy Location
Liability Charges
Retro UI Review
wwwemptechcom | 18005183874 | infoemptechcom
General Evaluationbull Contact ALL UI jurisdictions
bull Perform account balancing (per state records) ndash QTR by QTR rearward review
bull Determine what credits found eligible for refund amp if debits found if correct
bull Research for any missing incomplete or untimely reporting on the account
bull Review all MampA past 3 years
bull Help reduce source of potential penalty or increased UI tax expense
Photo credit motone
UI Resources
wwwemptechcom | 18005183874 | infoemptechcom
bull 10 Questions for Internal SUTA Dumping Assessmentbull How Nonprofit Employers Can Reduce UI Costs bull FAQs on Employment Tax Compliance amp Savings in MampA
Go here to download three pages of UI Tips from Emptech
EmptechrsquosUI Tips
Download this one page checklist to assess the state of your UI Claims Administration
Is Your UCM
Broken
Get them here
Get our Top 15 Tips for MampA Tax Treatment
EmptechBlog
Go here to see the latest news on HR Payroll and Employment Tax topics
Thank You
wwwemptechcom | 18005183874 | infoemptechcom
Questions
Contact (203) 738-0545 rhendersonemptechcom
- Employment Tax Consulting- UI Claims Management- Credits- Talent Management- Electronic I-9- Verification of Employment
Obama FY 2016 Budget
wwwemptechcom | 18005183874 | infoemptechcom
The FY 2016 Budget Key Pointsbull Increase FUTA tax rate from 06 to 08 in CY 2016
(effectively increases base from $42 to $56 per EE for 2016 in all states - 3333 increase)
bull States would be required to increase unemployment tax bases from as little as $7000 to $40000 (471 increase) Forces states to dramatically cut contribution rates or pass astronomical UI tax increase to ERs
bull In 2017 States would be reqrsquod to have a min tax equiv to 0175 on a $40000 tax base ($70 per EE) that would increase indefinitely based on avg wage increases
UI Tax Rate Trends
wwwemptechcom | 18005183874 | infoemptechcom
but average taxable wage bases continue to increase (up over $17K in 2014)
Source DOL
FUTA Credit Reduction amp ldquoBCRrdquo
wwwemptechcom | 18005183874 | infoemptechcom
Potential 2015 FUTA Credit Reductions from US DOL (July 2015)
UTax
These states had Title XII advance balances on Jan 1 2015 and are potentially subject to a reduction in FUTA credit on their IRS Form 940 for 2015 if the outstanding advance is not repaid by Nov 10 2015
2015 Potential Applied ForCredit Reduction 2015 Potential 2015 Potential 2015 Potential Total FUTA Credit Reduction
State(1) Due to Outstanding Advance(2) 27 add-on (3) BCR add-on(4) Credit Reduction(5) Relief (6)
California 15 00 14 29 BCR WaiverConnecticut 15 00 06 21Indiana 18 00 09 27 BCR WaiverKentucky 15 00 06 21 BCR Waiver FUTA CapNew York 15 00 00 15North Carolina 15 00 08 23Ohio 15 00 11 26 BCR WaiverSouth Carolina 18 00 03 21Virgin Islands 15 00 16 31 BCR Waiver
(1) These states have passed at least two consecutive January 1s with an outstanding Federal advance and are therefore subject to a FUTA credit reduction
(2) For each Jan 1 a state passes with an outstanding advance following the second one ERs in the state are subject to an additional 03 reduction in FUTA credit
(3) Following their third Jan 1 with an outstanding advance states are subject to an additional FUTA credit reduction called the 27 Add-on A description of this add-on is in FUTA 3302(c)(2)(B)
(4) These states are also potentially subject to the Benefit Cost Rate (BCR) additional credit reduction formula for having passed five consecutive Jan 1s with an outstanding Federal advance- FUTA section 3302 (c) (2)
(5) The FUTA credit reduction for 2015 is calculated by adding the credit reduction due to having an outstanding advance plus the reduction from the 27 add-on or the BCR add-on which if it is zero is replaced by the 27 add-on
(6) A state may apply for relief from a reduction in its FUTA credit under section FUTA 3302 The deadline for application of relief for all types was July 1 2015
(7) Final determination of the FUTA credit reduction will not be made until following the Nov 10 2015 repayment deadline
UI Tax Rate Determination
wwwemptechcom | 18005183874 | infoemptechcom
bull Primary Determination methodso Reserve Ratio (UI reserve balance avg taxable payroll)o Benefit Ratio (UI benefit charges taxable payroll)
bull New Employer UI Rate
bull Min ndash Max UI rateso Max UI rate no less than 54
bull SuccessionbullUI Transfer of Experience
bullState Rate Schedule adjustmentso Varies by overall UI trust fund balance
bull UI Voluntary Contributions
The Empire State (NY) UI Overview
wwwemptechcom | 18005183874 | infoemptechcom
bull Unemployment Rate (July 2015) 55
bull Trust Fund Positive Balance (July 2015) $8074000
bull rsquo15 Taxable Wage Base $10500 (and rising)
bull lsquo15 UI Tax Rates 21 min ndash 99 maxo 41 New ER UI
bull Paid back Title XII Federal UI loans
bull lsquo15 MinMax Weekly Benefit $100$420 (and rising)
bull State Information Data Exchange System (ldquoSIDESrdquo) UP
bull Voluntary Contribution state
The Garden State (NJ) UI Overview
wwwemptechcom | 18005183874 | infoemptechcom
bull Unemployment Rate (July 2015) 61
bull Trust Fund Positive Balance (July 2015) $255988000
bull lsquo15 Taxable Wage Base $32000
bull FY16 UI Tax Rates 12 min ndash 7 maxo New ER UI rate 34
bull lsquo15 Min Max Weekly Benefit $99-646
bull Voluntary Contribution state
The Garden State (NJ) UI Updates
wwwemptechcom | 18005183874 | infoemptechcom
Signed legislation 2014 thru July 2015
bull NJ AB3812 - requires electronic notification of death record to Dept to reduce UI fraud
bull NJ AB4189 - modifies short-time unemployment benefit lawbull NJ SB3097 - permits employee leasing companies to use ELC
experience rate or that of member companiesbull NJ SB1622 - withholding of state payments to vendors for delinquent
UI and disability taxesbull NJ SB2414 - amends DOLWD personnel access to UI claims receipt
and processing systembull NJ SB2082 - amends UI eligibility when claimant leaves work amp
subsequently laid off from work
The Constitution State (CT) UI Overview
wwwemptechcom | 18005183874 | infoemptechcom
bull Unemployment Rate (July 2015) 57
bull Trust Fund Loan Balance (Sept 2015) -$102M
bull rsquo15 Taxable Wage Base $15000
bull lsquo15 Tax Rates 19 min ndash 68 maxo New ER UI Rate 49
bull lsquo15 Potential FUTA Tax rate 21o 15 Basic FCR + 06 BCR add-ono Potential total FUTA cost per EE $189
bull rsquo15 MinMax Weekly Benefit $15 - 669
The Constitution State (CT) UI Updates
wwwemptechcom | 18005183874 | infoemptechcom
bullCT HB6707 Signed by Governor 7215 prevents ERrsquos base period account from being charged for unemployment benefits if claimant has been discharged or suspended because claimant lost their operatorrsquos license as a result of failing a drug alcohol test while off duty
bull CT is the only state subject to BCR add on (06) that has not applied for a waiver
o This is the second year CT has neglected to request a waiver
The Golden State (CA) UI Overview
wwwemptechcom | 18005183874 | infoemptechcom
bull Unemployment Rate (July 2015) 63
bull Trust Fund Loan Balance (Sept 2015) - $58B
bull lsquo15 Taxable Wage Base $7000
bull lsquo15 Tax Rates 15 min ndash 62 max o Schedule ldquoF+rdquo o 34 New ER rate
bull lsquo15 Potential FUTA Tax Rate 29o 15 Basic FCR + 14 BCR add ono $203 addtrsquol FUTA cost due to credit reduction and BCR
bull lsquo15 MinMax Weekly Benefit $40-450
The Golden State (CA) UI Updates
wwwemptechcom | 18005183874 | infoemptechcom
bull California is subject to the BCR add-on but has applied for a waivero Estimated BCR add on for 2015 is 14 o If the BCR waiver is approved the net cost is potentially $147 per
EE otherwise it could be $245 per EEo Final determination will be made by DOL after Nov 10 2015
bull Uber amp Lyft decisions on worker classification o EE vs independent contractor
bull UI appeals hearings ndash SB 1314 enacted extends deadline to file appeals
bull Administrative changes to law on UI Transfer of Experience when assets are acquired
bull SB 1131 enacted - members of LLC are not employees
The Buckeye State (OH) UI Overview
wwwemptechcom | 18005183874 | infoemptechcom
bull Unemployment Rate (July 2015) 5
bull Trust Fund Loan Balance (Sept 2015) - $875M
bull lsquo15 Taxable Wage Base $9000
bull lsquo15 Tax Rates 3 min ndash 108 max o New ER UI Tax Rate 27
bull lsquo15 Potential FUTA Tax Rate 26o 15 Basic FCR + 11 BCR add ono $182 addtrsquol FUTA cost due to credit reduction and BCR rsquo15
bull Voluntary Contribution state
Key Federal UI Legislation
wwwemptechcom | 18005183874 | infoemptechcom
bull 2004 SUTA Dumping Act
bull 2011 TAAE UI Integrity Act (Sec 252)
bull 2012 ATRAbull EE SS tax rate return to normal
Audience Questions
wwwemptechcom | 18005183874 | infoemptechcom
bull Changes in ET Structure
bull MampA Activity
2004 SUTA Dumping Prevention Act
wwwemptechcom | 18005183874 | infoemptechcom
bull SUTA Dumping (aka ldquounemployment tax avoidancerdquo) occurs by shifting EEs to a less-taxed entity to avoid paying a higher UI tax rate
bull Migration of EEs between legal entities (MampA consolidation etc) may trigger time-sensitive mandatory compliance reporting ndash misunderstood amp often missed
bull Penalties for missing or incorrect reporting can include max UI ratings civil ampor criminal penaltiesbull SUTA Dumping Detection Software for enforcement
bull Read Employerrsquos MampA ldquoTo Dordquo List
2011 Federal Act ndash UI Integrity
wwwemptechcom | 18005183874 | infoemptechcom
bull Follow on to 2009 Executive Order to reduce improper UI payments
bull Under UI Integrity rules states must not relieve employers of charges when they fail to respond timely or adequately to UI claims related agency requests bull Pattern of Failure as little as two instances
bull Employers cannot collude with employee to misuse unemployment claim system
bull Each state has unique rules method of enforcement being formulated
ldquoPattern of Failurerdquo Financial Impact Example
wwwemptechcom | 18005183874 | infoemptechcom
Case Study
bull ER With 100 SeparationsYr ldquoPattern of Failurerdquo classification bull Benefit$ paid to claimant prior to successful Appeal by ER
FACTORS FIGURESWeekly benefit amount Assume $300
Time to appeal 8 weeks
of claims lost on initial determination amp won by ER on Appeal
10 (out of 100 total separations)
Charge to ER UI account $24000 ($2400 x 10 claims) now NON-RECOVERABLE due to ldquoPattern of Failurerdquo
Additional Exposure Negative Impact bull May raise AUDIT RISK for other UI areas
bull May elevate ER experience rating
ldquoPattern of Failurerdquo Example Letter
wwwemptechcom | 18005183874 | infoemptechcom
Compliance amp Enforcement UI Integrity
wwwemptechcom | 18005183874 | infoemptechcom
bull Unemployment Claims ldquoTriggerrdquondash Claims filings from an EE associated with a MampA event may
trigger an ldquoevaluationrdquo of the succession reporting due to confusion surrounded which ER responsible for benefit charge
bull ldquoSDDSrdquo (SUTA Dumping Detection Software) ndash Many States using SDDS to ldquocatchrdquo EE migrations ndash Flags accounts for review to see if UI succession reporting
completed
bull ldquoQETPrdquo (Questionable Employment Tax Practices)ndash Under QETP IRS and 37 states sharing information and
specifically focusing on ET for auditsndash As of mid-2012 QETP has resulted in audits of 11000
employers
Audit Alert Inter-Agency Info Sharing
wwwemptechcom | 18005183874 | infoemptechcom
bull Questionable Employment Tax Practices ldquoQETPrdquo Initiativebull 37 States amp IRSbull 12000+ business examined thru lsquo12
bull Fed amp state info sharing data mining amp cross-agency task forces
bull Significant focus on worker classification
bull Significant incentives to states to aggressively audit
UI Tax Optimization Focus
wwwemptechcom | 18005183874 | infoemptechcom
bull UI Cost Control
bull UI Retrospective Review
UI Benefit Charges Material Expense
wwwemptechcom | 18005183874 | infoemptechcom
UTax
UI Integrity Oversight Plan
wwwemptechcom | 18005183874 | infoemptechcom
UTax
Designate a Person or Team
Total UI Claims (also by
statelocation)Which claims failed to be
timely adequate
Why Who
Track winloss for protests For
losses why WhoTrack winloss for
appeals Why Who
Impact on experience
rating Calculate cost
to organization
Find amp fix areas of organizational
weakness
UI Integrity Oversight Plan
wwwemptechcom | 18005183874 | infoemptechcom
UTax
ldquoACTrdquoProvide information to UI
agencies that isAccurateComplete
Timely
Best Practices
UI Claims Admin Reporting
wwwemptechcom | 18005183874 | infoemptechcom
ldquoFloat like a butterfly sting like a bee You cannot hit what you cannot seerdquo
Muhammad AliPeriodicReports
Separations
Claims
Win LoseBy Location
Liability Charges
Retro UI Review
wwwemptechcom | 18005183874 | infoemptechcom
General Evaluationbull Contact ALL UI jurisdictions
bull Perform account balancing (per state records) ndash QTR by QTR rearward review
bull Determine what credits found eligible for refund amp if debits found if correct
bull Research for any missing incomplete or untimely reporting on the account
bull Review all MampA past 3 years
bull Help reduce source of potential penalty or increased UI tax expense
Photo credit motone
UI Resources
wwwemptechcom | 18005183874 | infoemptechcom
bull 10 Questions for Internal SUTA Dumping Assessmentbull How Nonprofit Employers Can Reduce UI Costs bull FAQs on Employment Tax Compliance amp Savings in MampA
Go here to download three pages of UI Tips from Emptech
EmptechrsquosUI Tips
Download this one page checklist to assess the state of your UI Claims Administration
Is Your UCM
Broken
Get them here
Get our Top 15 Tips for MampA Tax Treatment
EmptechBlog
Go here to see the latest news on HR Payroll and Employment Tax topics
Thank You
wwwemptechcom | 18005183874 | infoemptechcom
Questions
Contact (203) 738-0545 rhendersonemptechcom
- Employment Tax Consulting- UI Claims Management- Credits- Talent Management- Electronic I-9- Verification of Employment
UI Tax Rate Trends
wwwemptechcom | 18005183874 | infoemptechcom
but average taxable wage bases continue to increase (up over $17K in 2014)
Source DOL
FUTA Credit Reduction amp ldquoBCRrdquo
wwwemptechcom | 18005183874 | infoemptechcom
Potential 2015 FUTA Credit Reductions from US DOL (July 2015)
UTax
These states had Title XII advance balances on Jan 1 2015 and are potentially subject to a reduction in FUTA credit on their IRS Form 940 for 2015 if the outstanding advance is not repaid by Nov 10 2015
2015 Potential Applied ForCredit Reduction 2015 Potential 2015 Potential 2015 Potential Total FUTA Credit Reduction
State(1) Due to Outstanding Advance(2) 27 add-on (3) BCR add-on(4) Credit Reduction(5) Relief (6)
California 15 00 14 29 BCR WaiverConnecticut 15 00 06 21Indiana 18 00 09 27 BCR WaiverKentucky 15 00 06 21 BCR Waiver FUTA CapNew York 15 00 00 15North Carolina 15 00 08 23Ohio 15 00 11 26 BCR WaiverSouth Carolina 18 00 03 21Virgin Islands 15 00 16 31 BCR Waiver
(1) These states have passed at least two consecutive January 1s with an outstanding Federal advance and are therefore subject to a FUTA credit reduction
(2) For each Jan 1 a state passes with an outstanding advance following the second one ERs in the state are subject to an additional 03 reduction in FUTA credit
(3) Following their third Jan 1 with an outstanding advance states are subject to an additional FUTA credit reduction called the 27 Add-on A description of this add-on is in FUTA 3302(c)(2)(B)
(4) These states are also potentially subject to the Benefit Cost Rate (BCR) additional credit reduction formula for having passed five consecutive Jan 1s with an outstanding Federal advance- FUTA section 3302 (c) (2)
(5) The FUTA credit reduction for 2015 is calculated by adding the credit reduction due to having an outstanding advance plus the reduction from the 27 add-on or the BCR add-on which if it is zero is replaced by the 27 add-on
(6) A state may apply for relief from a reduction in its FUTA credit under section FUTA 3302 The deadline for application of relief for all types was July 1 2015
(7) Final determination of the FUTA credit reduction will not be made until following the Nov 10 2015 repayment deadline
UI Tax Rate Determination
wwwemptechcom | 18005183874 | infoemptechcom
bull Primary Determination methodso Reserve Ratio (UI reserve balance avg taxable payroll)o Benefit Ratio (UI benefit charges taxable payroll)
bull New Employer UI Rate
bull Min ndash Max UI rateso Max UI rate no less than 54
bull SuccessionbullUI Transfer of Experience
bullState Rate Schedule adjustmentso Varies by overall UI trust fund balance
bull UI Voluntary Contributions
The Empire State (NY) UI Overview
wwwemptechcom | 18005183874 | infoemptechcom
bull Unemployment Rate (July 2015) 55
bull Trust Fund Positive Balance (July 2015) $8074000
bull rsquo15 Taxable Wage Base $10500 (and rising)
bull lsquo15 UI Tax Rates 21 min ndash 99 maxo 41 New ER UI
bull Paid back Title XII Federal UI loans
bull lsquo15 MinMax Weekly Benefit $100$420 (and rising)
bull State Information Data Exchange System (ldquoSIDESrdquo) UP
bull Voluntary Contribution state
The Garden State (NJ) UI Overview
wwwemptechcom | 18005183874 | infoemptechcom
bull Unemployment Rate (July 2015) 61
bull Trust Fund Positive Balance (July 2015) $255988000
bull lsquo15 Taxable Wage Base $32000
bull FY16 UI Tax Rates 12 min ndash 7 maxo New ER UI rate 34
bull lsquo15 Min Max Weekly Benefit $99-646
bull Voluntary Contribution state
The Garden State (NJ) UI Updates
wwwemptechcom | 18005183874 | infoemptechcom
Signed legislation 2014 thru July 2015
bull NJ AB3812 - requires electronic notification of death record to Dept to reduce UI fraud
bull NJ AB4189 - modifies short-time unemployment benefit lawbull NJ SB3097 - permits employee leasing companies to use ELC
experience rate or that of member companiesbull NJ SB1622 - withholding of state payments to vendors for delinquent
UI and disability taxesbull NJ SB2414 - amends DOLWD personnel access to UI claims receipt
and processing systembull NJ SB2082 - amends UI eligibility when claimant leaves work amp
subsequently laid off from work
The Constitution State (CT) UI Overview
wwwemptechcom | 18005183874 | infoemptechcom
bull Unemployment Rate (July 2015) 57
bull Trust Fund Loan Balance (Sept 2015) -$102M
bull rsquo15 Taxable Wage Base $15000
bull lsquo15 Tax Rates 19 min ndash 68 maxo New ER UI Rate 49
bull lsquo15 Potential FUTA Tax rate 21o 15 Basic FCR + 06 BCR add-ono Potential total FUTA cost per EE $189
bull rsquo15 MinMax Weekly Benefit $15 - 669
The Constitution State (CT) UI Updates
wwwemptechcom | 18005183874 | infoemptechcom
bullCT HB6707 Signed by Governor 7215 prevents ERrsquos base period account from being charged for unemployment benefits if claimant has been discharged or suspended because claimant lost their operatorrsquos license as a result of failing a drug alcohol test while off duty
bull CT is the only state subject to BCR add on (06) that has not applied for a waiver
o This is the second year CT has neglected to request a waiver
The Golden State (CA) UI Overview
wwwemptechcom | 18005183874 | infoemptechcom
bull Unemployment Rate (July 2015) 63
bull Trust Fund Loan Balance (Sept 2015) - $58B
bull lsquo15 Taxable Wage Base $7000
bull lsquo15 Tax Rates 15 min ndash 62 max o Schedule ldquoF+rdquo o 34 New ER rate
bull lsquo15 Potential FUTA Tax Rate 29o 15 Basic FCR + 14 BCR add ono $203 addtrsquol FUTA cost due to credit reduction and BCR
bull lsquo15 MinMax Weekly Benefit $40-450
The Golden State (CA) UI Updates
wwwemptechcom | 18005183874 | infoemptechcom
bull California is subject to the BCR add-on but has applied for a waivero Estimated BCR add on for 2015 is 14 o If the BCR waiver is approved the net cost is potentially $147 per
EE otherwise it could be $245 per EEo Final determination will be made by DOL after Nov 10 2015
bull Uber amp Lyft decisions on worker classification o EE vs independent contractor
bull UI appeals hearings ndash SB 1314 enacted extends deadline to file appeals
bull Administrative changes to law on UI Transfer of Experience when assets are acquired
bull SB 1131 enacted - members of LLC are not employees
The Buckeye State (OH) UI Overview
wwwemptechcom | 18005183874 | infoemptechcom
bull Unemployment Rate (July 2015) 5
bull Trust Fund Loan Balance (Sept 2015) - $875M
bull lsquo15 Taxable Wage Base $9000
bull lsquo15 Tax Rates 3 min ndash 108 max o New ER UI Tax Rate 27
bull lsquo15 Potential FUTA Tax Rate 26o 15 Basic FCR + 11 BCR add ono $182 addtrsquol FUTA cost due to credit reduction and BCR rsquo15
bull Voluntary Contribution state
Key Federal UI Legislation
wwwemptechcom | 18005183874 | infoemptechcom
bull 2004 SUTA Dumping Act
bull 2011 TAAE UI Integrity Act (Sec 252)
bull 2012 ATRAbull EE SS tax rate return to normal
Audience Questions
wwwemptechcom | 18005183874 | infoemptechcom
bull Changes in ET Structure
bull MampA Activity
2004 SUTA Dumping Prevention Act
wwwemptechcom | 18005183874 | infoemptechcom
bull SUTA Dumping (aka ldquounemployment tax avoidancerdquo) occurs by shifting EEs to a less-taxed entity to avoid paying a higher UI tax rate
bull Migration of EEs between legal entities (MampA consolidation etc) may trigger time-sensitive mandatory compliance reporting ndash misunderstood amp often missed
bull Penalties for missing or incorrect reporting can include max UI ratings civil ampor criminal penaltiesbull SUTA Dumping Detection Software for enforcement
bull Read Employerrsquos MampA ldquoTo Dordquo List
2011 Federal Act ndash UI Integrity
wwwemptechcom | 18005183874 | infoemptechcom
bull Follow on to 2009 Executive Order to reduce improper UI payments
bull Under UI Integrity rules states must not relieve employers of charges when they fail to respond timely or adequately to UI claims related agency requests bull Pattern of Failure as little as two instances
bull Employers cannot collude with employee to misuse unemployment claim system
bull Each state has unique rules method of enforcement being formulated
ldquoPattern of Failurerdquo Financial Impact Example
wwwemptechcom | 18005183874 | infoemptechcom
Case Study
bull ER With 100 SeparationsYr ldquoPattern of Failurerdquo classification bull Benefit$ paid to claimant prior to successful Appeal by ER
FACTORS FIGURESWeekly benefit amount Assume $300
Time to appeal 8 weeks
of claims lost on initial determination amp won by ER on Appeal
10 (out of 100 total separations)
Charge to ER UI account $24000 ($2400 x 10 claims) now NON-RECOVERABLE due to ldquoPattern of Failurerdquo
Additional Exposure Negative Impact bull May raise AUDIT RISK for other UI areas
bull May elevate ER experience rating
ldquoPattern of Failurerdquo Example Letter
wwwemptechcom | 18005183874 | infoemptechcom
Compliance amp Enforcement UI Integrity
wwwemptechcom | 18005183874 | infoemptechcom
bull Unemployment Claims ldquoTriggerrdquondash Claims filings from an EE associated with a MampA event may
trigger an ldquoevaluationrdquo of the succession reporting due to confusion surrounded which ER responsible for benefit charge
bull ldquoSDDSrdquo (SUTA Dumping Detection Software) ndash Many States using SDDS to ldquocatchrdquo EE migrations ndash Flags accounts for review to see if UI succession reporting
completed
bull ldquoQETPrdquo (Questionable Employment Tax Practices)ndash Under QETP IRS and 37 states sharing information and
specifically focusing on ET for auditsndash As of mid-2012 QETP has resulted in audits of 11000
employers
Audit Alert Inter-Agency Info Sharing
wwwemptechcom | 18005183874 | infoemptechcom
bull Questionable Employment Tax Practices ldquoQETPrdquo Initiativebull 37 States amp IRSbull 12000+ business examined thru lsquo12
bull Fed amp state info sharing data mining amp cross-agency task forces
bull Significant focus on worker classification
bull Significant incentives to states to aggressively audit
UI Tax Optimization Focus
wwwemptechcom | 18005183874 | infoemptechcom
bull UI Cost Control
bull UI Retrospective Review
UI Benefit Charges Material Expense
wwwemptechcom | 18005183874 | infoemptechcom
UTax
UI Integrity Oversight Plan
wwwemptechcom | 18005183874 | infoemptechcom
UTax
Designate a Person or Team
Total UI Claims (also by
statelocation)Which claims failed to be
timely adequate
Why Who
Track winloss for protests For
losses why WhoTrack winloss for
appeals Why Who
Impact on experience
rating Calculate cost
to organization
Find amp fix areas of organizational
weakness
UI Integrity Oversight Plan
wwwemptechcom | 18005183874 | infoemptechcom
UTax
ldquoACTrdquoProvide information to UI
agencies that isAccurateComplete
Timely
Best Practices
UI Claims Admin Reporting
wwwemptechcom | 18005183874 | infoemptechcom
ldquoFloat like a butterfly sting like a bee You cannot hit what you cannot seerdquo
Muhammad AliPeriodicReports
Separations
Claims
Win LoseBy Location
Liability Charges
Retro UI Review
wwwemptechcom | 18005183874 | infoemptechcom
General Evaluationbull Contact ALL UI jurisdictions
bull Perform account balancing (per state records) ndash QTR by QTR rearward review
bull Determine what credits found eligible for refund amp if debits found if correct
bull Research for any missing incomplete or untimely reporting on the account
bull Review all MampA past 3 years
bull Help reduce source of potential penalty or increased UI tax expense
Photo credit motone
UI Resources
wwwemptechcom | 18005183874 | infoemptechcom
bull 10 Questions for Internal SUTA Dumping Assessmentbull How Nonprofit Employers Can Reduce UI Costs bull FAQs on Employment Tax Compliance amp Savings in MampA
Go here to download three pages of UI Tips from Emptech
EmptechrsquosUI Tips
Download this one page checklist to assess the state of your UI Claims Administration
Is Your UCM
Broken
Get them here
Get our Top 15 Tips for MampA Tax Treatment
EmptechBlog
Go here to see the latest news on HR Payroll and Employment Tax topics
Thank You
wwwemptechcom | 18005183874 | infoemptechcom
Questions
Contact (203) 738-0545 rhendersonemptechcom
- Employment Tax Consulting- UI Claims Management- Credits- Talent Management- Electronic I-9- Verification of Employment
FUTA Credit Reduction amp ldquoBCRrdquo
wwwemptechcom | 18005183874 | infoemptechcom
Potential 2015 FUTA Credit Reductions from US DOL (July 2015)
UTax
These states had Title XII advance balances on Jan 1 2015 and are potentially subject to a reduction in FUTA credit on their IRS Form 940 for 2015 if the outstanding advance is not repaid by Nov 10 2015
2015 Potential Applied ForCredit Reduction 2015 Potential 2015 Potential 2015 Potential Total FUTA Credit Reduction
State(1) Due to Outstanding Advance(2) 27 add-on (3) BCR add-on(4) Credit Reduction(5) Relief (6)
California 15 00 14 29 BCR WaiverConnecticut 15 00 06 21Indiana 18 00 09 27 BCR WaiverKentucky 15 00 06 21 BCR Waiver FUTA CapNew York 15 00 00 15North Carolina 15 00 08 23Ohio 15 00 11 26 BCR WaiverSouth Carolina 18 00 03 21Virgin Islands 15 00 16 31 BCR Waiver
(1) These states have passed at least two consecutive January 1s with an outstanding Federal advance and are therefore subject to a FUTA credit reduction
(2) For each Jan 1 a state passes with an outstanding advance following the second one ERs in the state are subject to an additional 03 reduction in FUTA credit
(3) Following their third Jan 1 with an outstanding advance states are subject to an additional FUTA credit reduction called the 27 Add-on A description of this add-on is in FUTA 3302(c)(2)(B)
(4) These states are also potentially subject to the Benefit Cost Rate (BCR) additional credit reduction formula for having passed five consecutive Jan 1s with an outstanding Federal advance- FUTA section 3302 (c) (2)
(5) The FUTA credit reduction for 2015 is calculated by adding the credit reduction due to having an outstanding advance plus the reduction from the 27 add-on or the BCR add-on which if it is zero is replaced by the 27 add-on
(6) A state may apply for relief from a reduction in its FUTA credit under section FUTA 3302 The deadline for application of relief for all types was July 1 2015
(7) Final determination of the FUTA credit reduction will not be made until following the Nov 10 2015 repayment deadline
UI Tax Rate Determination
wwwemptechcom | 18005183874 | infoemptechcom
bull Primary Determination methodso Reserve Ratio (UI reserve balance avg taxable payroll)o Benefit Ratio (UI benefit charges taxable payroll)
bull New Employer UI Rate
bull Min ndash Max UI rateso Max UI rate no less than 54
bull SuccessionbullUI Transfer of Experience
bullState Rate Schedule adjustmentso Varies by overall UI trust fund balance
bull UI Voluntary Contributions
The Empire State (NY) UI Overview
wwwemptechcom | 18005183874 | infoemptechcom
bull Unemployment Rate (July 2015) 55
bull Trust Fund Positive Balance (July 2015) $8074000
bull rsquo15 Taxable Wage Base $10500 (and rising)
bull lsquo15 UI Tax Rates 21 min ndash 99 maxo 41 New ER UI
bull Paid back Title XII Federal UI loans
bull lsquo15 MinMax Weekly Benefit $100$420 (and rising)
bull State Information Data Exchange System (ldquoSIDESrdquo) UP
bull Voluntary Contribution state
The Garden State (NJ) UI Overview
wwwemptechcom | 18005183874 | infoemptechcom
bull Unemployment Rate (July 2015) 61
bull Trust Fund Positive Balance (July 2015) $255988000
bull lsquo15 Taxable Wage Base $32000
bull FY16 UI Tax Rates 12 min ndash 7 maxo New ER UI rate 34
bull lsquo15 Min Max Weekly Benefit $99-646
bull Voluntary Contribution state
The Garden State (NJ) UI Updates
wwwemptechcom | 18005183874 | infoemptechcom
Signed legislation 2014 thru July 2015
bull NJ AB3812 - requires electronic notification of death record to Dept to reduce UI fraud
bull NJ AB4189 - modifies short-time unemployment benefit lawbull NJ SB3097 - permits employee leasing companies to use ELC
experience rate or that of member companiesbull NJ SB1622 - withholding of state payments to vendors for delinquent
UI and disability taxesbull NJ SB2414 - amends DOLWD personnel access to UI claims receipt
and processing systembull NJ SB2082 - amends UI eligibility when claimant leaves work amp
subsequently laid off from work
The Constitution State (CT) UI Overview
wwwemptechcom | 18005183874 | infoemptechcom
bull Unemployment Rate (July 2015) 57
bull Trust Fund Loan Balance (Sept 2015) -$102M
bull rsquo15 Taxable Wage Base $15000
bull lsquo15 Tax Rates 19 min ndash 68 maxo New ER UI Rate 49
bull lsquo15 Potential FUTA Tax rate 21o 15 Basic FCR + 06 BCR add-ono Potential total FUTA cost per EE $189
bull rsquo15 MinMax Weekly Benefit $15 - 669
The Constitution State (CT) UI Updates
wwwemptechcom | 18005183874 | infoemptechcom
bullCT HB6707 Signed by Governor 7215 prevents ERrsquos base period account from being charged for unemployment benefits if claimant has been discharged or suspended because claimant lost their operatorrsquos license as a result of failing a drug alcohol test while off duty
bull CT is the only state subject to BCR add on (06) that has not applied for a waiver
o This is the second year CT has neglected to request a waiver
The Golden State (CA) UI Overview
wwwemptechcom | 18005183874 | infoemptechcom
bull Unemployment Rate (July 2015) 63
bull Trust Fund Loan Balance (Sept 2015) - $58B
bull lsquo15 Taxable Wage Base $7000
bull lsquo15 Tax Rates 15 min ndash 62 max o Schedule ldquoF+rdquo o 34 New ER rate
bull lsquo15 Potential FUTA Tax Rate 29o 15 Basic FCR + 14 BCR add ono $203 addtrsquol FUTA cost due to credit reduction and BCR
bull lsquo15 MinMax Weekly Benefit $40-450
The Golden State (CA) UI Updates
wwwemptechcom | 18005183874 | infoemptechcom
bull California is subject to the BCR add-on but has applied for a waivero Estimated BCR add on for 2015 is 14 o If the BCR waiver is approved the net cost is potentially $147 per
EE otherwise it could be $245 per EEo Final determination will be made by DOL after Nov 10 2015
bull Uber amp Lyft decisions on worker classification o EE vs independent contractor
bull UI appeals hearings ndash SB 1314 enacted extends deadline to file appeals
bull Administrative changes to law on UI Transfer of Experience when assets are acquired
bull SB 1131 enacted - members of LLC are not employees
The Buckeye State (OH) UI Overview
wwwemptechcom | 18005183874 | infoemptechcom
bull Unemployment Rate (July 2015) 5
bull Trust Fund Loan Balance (Sept 2015) - $875M
bull lsquo15 Taxable Wage Base $9000
bull lsquo15 Tax Rates 3 min ndash 108 max o New ER UI Tax Rate 27
bull lsquo15 Potential FUTA Tax Rate 26o 15 Basic FCR + 11 BCR add ono $182 addtrsquol FUTA cost due to credit reduction and BCR rsquo15
bull Voluntary Contribution state
Key Federal UI Legislation
wwwemptechcom | 18005183874 | infoemptechcom
bull 2004 SUTA Dumping Act
bull 2011 TAAE UI Integrity Act (Sec 252)
bull 2012 ATRAbull EE SS tax rate return to normal
Audience Questions
wwwemptechcom | 18005183874 | infoemptechcom
bull Changes in ET Structure
bull MampA Activity
2004 SUTA Dumping Prevention Act
wwwemptechcom | 18005183874 | infoemptechcom
bull SUTA Dumping (aka ldquounemployment tax avoidancerdquo) occurs by shifting EEs to a less-taxed entity to avoid paying a higher UI tax rate
bull Migration of EEs between legal entities (MampA consolidation etc) may trigger time-sensitive mandatory compliance reporting ndash misunderstood amp often missed
bull Penalties for missing or incorrect reporting can include max UI ratings civil ampor criminal penaltiesbull SUTA Dumping Detection Software for enforcement
bull Read Employerrsquos MampA ldquoTo Dordquo List
2011 Federal Act ndash UI Integrity
wwwemptechcom | 18005183874 | infoemptechcom
bull Follow on to 2009 Executive Order to reduce improper UI payments
bull Under UI Integrity rules states must not relieve employers of charges when they fail to respond timely or adequately to UI claims related agency requests bull Pattern of Failure as little as two instances
bull Employers cannot collude with employee to misuse unemployment claim system
bull Each state has unique rules method of enforcement being formulated
ldquoPattern of Failurerdquo Financial Impact Example
wwwemptechcom | 18005183874 | infoemptechcom
Case Study
bull ER With 100 SeparationsYr ldquoPattern of Failurerdquo classification bull Benefit$ paid to claimant prior to successful Appeal by ER
FACTORS FIGURESWeekly benefit amount Assume $300
Time to appeal 8 weeks
of claims lost on initial determination amp won by ER on Appeal
10 (out of 100 total separations)
Charge to ER UI account $24000 ($2400 x 10 claims) now NON-RECOVERABLE due to ldquoPattern of Failurerdquo
Additional Exposure Negative Impact bull May raise AUDIT RISK for other UI areas
bull May elevate ER experience rating
ldquoPattern of Failurerdquo Example Letter
wwwemptechcom | 18005183874 | infoemptechcom
Compliance amp Enforcement UI Integrity
wwwemptechcom | 18005183874 | infoemptechcom
bull Unemployment Claims ldquoTriggerrdquondash Claims filings from an EE associated with a MampA event may
trigger an ldquoevaluationrdquo of the succession reporting due to confusion surrounded which ER responsible for benefit charge
bull ldquoSDDSrdquo (SUTA Dumping Detection Software) ndash Many States using SDDS to ldquocatchrdquo EE migrations ndash Flags accounts for review to see if UI succession reporting
completed
bull ldquoQETPrdquo (Questionable Employment Tax Practices)ndash Under QETP IRS and 37 states sharing information and
specifically focusing on ET for auditsndash As of mid-2012 QETP has resulted in audits of 11000
employers
Audit Alert Inter-Agency Info Sharing
wwwemptechcom | 18005183874 | infoemptechcom
bull Questionable Employment Tax Practices ldquoQETPrdquo Initiativebull 37 States amp IRSbull 12000+ business examined thru lsquo12
bull Fed amp state info sharing data mining amp cross-agency task forces
bull Significant focus on worker classification
bull Significant incentives to states to aggressively audit
UI Tax Optimization Focus
wwwemptechcom | 18005183874 | infoemptechcom
bull UI Cost Control
bull UI Retrospective Review
UI Benefit Charges Material Expense
wwwemptechcom | 18005183874 | infoemptechcom
UTax
UI Integrity Oversight Plan
wwwemptechcom | 18005183874 | infoemptechcom
UTax
Designate a Person or Team
Total UI Claims (also by
statelocation)Which claims failed to be
timely adequate
Why Who
Track winloss for protests For
losses why WhoTrack winloss for
appeals Why Who
Impact on experience
rating Calculate cost
to organization
Find amp fix areas of organizational
weakness
UI Integrity Oversight Plan
wwwemptechcom | 18005183874 | infoemptechcom
UTax
ldquoACTrdquoProvide information to UI
agencies that isAccurateComplete
Timely
Best Practices
UI Claims Admin Reporting
wwwemptechcom | 18005183874 | infoemptechcom
ldquoFloat like a butterfly sting like a bee You cannot hit what you cannot seerdquo
Muhammad AliPeriodicReports
Separations
Claims
Win LoseBy Location
Liability Charges
Retro UI Review
wwwemptechcom | 18005183874 | infoemptechcom
General Evaluationbull Contact ALL UI jurisdictions
bull Perform account balancing (per state records) ndash QTR by QTR rearward review
bull Determine what credits found eligible for refund amp if debits found if correct
bull Research for any missing incomplete or untimely reporting on the account
bull Review all MampA past 3 years
bull Help reduce source of potential penalty or increased UI tax expense
Photo credit motone
UI Resources
wwwemptechcom | 18005183874 | infoemptechcom
bull 10 Questions for Internal SUTA Dumping Assessmentbull How Nonprofit Employers Can Reduce UI Costs bull FAQs on Employment Tax Compliance amp Savings in MampA
Go here to download three pages of UI Tips from Emptech
EmptechrsquosUI Tips
Download this one page checklist to assess the state of your UI Claims Administration
Is Your UCM
Broken
Get them here
Get our Top 15 Tips for MampA Tax Treatment
EmptechBlog
Go here to see the latest news on HR Payroll and Employment Tax topics
Thank You
wwwemptechcom | 18005183874 | infoemptechcom
Questions
Contact (203) 738-0545 rhendersonemptechcom
- Employment Tax Consulting- UI Claims Management- Credits- Talent Management- Electronic I-9- Verification of Employment
UI Tax Rate Determination
wwwemptechcom | 18005183874 | infoemptechcom
bull Primary Determination methodso Reserve Ratio (UI reserve balance avg taxable payroll)o Benefit Ratio (UI benefit charges taxable payroll)
bull New Employer UI Rate
bull Min ndash Max UI rateso Max UI rate no less than 54
bull SuccessionbullUI Transfer of Experience
bullState Rate Schedule adjustmentso Varies by overall UI trust fund balance
bull UI Voluntary Contributions
The Empire State (NY) UI Overview
wwwemptechcom | 18005183874 | infoemptechcom
bull Unemployment Rate (July 2015) 55
bull Trust Fund Positive Balance (July 2015) $8074000
bull rsquo15 Taxable Wage Base $10500 (and rising)
bull lsquo15 UI Tax Rates 21 min ndash 99 maxo 41 New ER UI
bull Paid back Title XII Federal UI loans
bull lsquo15 MinMax Weekly Benefit $100$420 (and rising)
bull State Information Data Exchange System (ldquoSIDESrdquo) UP
bull Voluntary Contribution state
The Garden State (NJ) UI Overview
wwwemptechcom | 18005183874 | infoemptechcom
bull Unemployment Rate (July 2015) 61
bull Trust Fund Positive Balance (July 2015) $255988000
bull lsquo15 Taxable Wage Base $32000
bull FY16 UI Tax Rates 12 min ndash 7 maxo New ER UI rate 34
bull lsquo15 Min Max Weekly Benefit $99-646
bull Voluntary Contribution state
The Garden State (NJ) UI Updates
wwwemptechcom | 18005183874 | infoemptechcom
Signed legislation 2014 thru July 2015
bull NJ AB3812 - requires electronic notification of death record to Dept to reduce UI fraud
bull NJ AB4189 - modifies short-time unemployment benefit lawbull NJ SB3097 - permits employee leasing companies to use ELC
experience rate or that of member companiesbull NJ SB1622 - withholding of state payments to vendors for delinquent
UI and disability taxesbull NJ SB2414 - amends DOLWD personnel access to UI claims receipt
and processing systembull NJ SB2082 - amends UI eligibility when claimant leaves work amp
subsequently laid off from work
The Constitution State (CT) UI Overview
wwwemptechcom | 18005183874 | infoemptechcom
bull Unemployment Rate (July 2015) 57
bull Trust Fund Loan Balance (Sept 2015) -$102M
bull rsquo15 Taxable Wage Base $15000
bull lsquo15 Tax Rates 19 min ndash 68 maxo New ER UI Rate 49
bull lsquo15 Potential FUTA Tax rate 21o 15 Basic FCR + 06 BCR add-ono Potential total FUTA cost per EE $189
bull rsquo15 MinMax Weekly Benefit $15 - 669
The Constitution State (CT) UI Updates
wwwemptechcom | 18005183874 | infoemptechcom
bullCT HB6707 Signed by Governor 7215 prevents ERrsquos base period account from being charged for unemployment benefits if claimant has been discharged or suspended because claimant lost their operatorrsquos license as a result of failing a drug alcohol test while off duty
bull CT is the only state subject to BCR add on (06) that has not applied for a waiver
o This is the second year CT has neglected to request a waiver
The Golden State (CA) UI Overview
wwwemptechcom | 18005183874 | infoemptechcom
bull Unemployment Rate (July 2015) 63
bull Trust Fund Loan Balance (Sept 2015) - $58B
bull lsquo15 Taxable Wage Base $7000
bull lsquo15 Tax Rates 15 min ndash 62 max o Schedule ldquoF+rdquo o 34 New ER rate
bull lsquo15 Potential FUTA Tax Rate 29o 15 Basic FCR + 14 BCR add ono $203 addtrsquol FUTA cost due to credit reduction and BCR
bull lsquo15 MinMax Weekly Benefit $40-450
The Golden State (CA) UI Updates
wwwemptechcom | 18005183874 | infoemptechcom
bull California is subject to the BCR add-on but has applied for a waivero Estimated BCR add on for 2015 is 14 o If the BCR waiver is approved the net cost is potentially $147 per
EE otherwise it could be $245 per EEo Final determination will be made by DOL after Nov 10 2015
bull Uber amp Lyft decisions on worker classification o EE vs independent contractor
bull UI appeals hearings ndash SB 1314 enacted extends deadline to file appeals
bull Administrative changes to law on UI Transfer of Experience when assets are acquired
bull SB 1131 enacted - members of LLC are not employees
The Buckeye State (OH) UI Overview
wwwemptechcom | 18005183874 | infoemptechcom
bull Unemployment Rate (July 2015) 5
bull Trust Fund Loan Balance (Sept 2015) - $875M
bull lsquo15 Taxable Wage Base $9000
bull lsquo15 Tax Rates 3 min ndash 108 max o New ER UI Tax Rate 27
bull lsquo15 Potential FUTA Tax Rate 26o 15 Basic FCR + 11 BCR add ono $182 addtrsquol FUTA cost due to credit reduction and BCR rsquo15
bull Voluntary Contribution state
Key Federal UI Legislation
wwwemptechcom | 18005183874 | infoemptechcom
bull 2004 SUTA Dumping Act
bull 2011 TAAE UI Integrity Act (Sec 252)
bull 2012 ATRAbull EE SS tax rate return to normal
Audience Questions
wwwemptechcom | 18005183874 | infoemptechcom
bull Changes in ET Structure
bull MampA Activity
2004 SUTA Dumping Prevention Act
wwwemptechcom | 18005183874 | infoemptechcom
bull SUTA Dumping (aka ldquounemployment tax avoidancerdquo) occurs by shifting EEs to a less-taxed entity to avoid paying a higher UI tax rate
bull Migration of EEs between legal entities (MampA consolidation etc) may trigger time-sensitive mandatory compliance reporting ndash misunderstood amp often missed
bull Penalties for missing or incorrect reporting can include max UI ratings civil ampor criminal penaltiesbull SUTA Dumping Detection Software for enforcement
bull Read Employerrsquos MampA ldquoTo Dordquo List
2011 Federal Act ndash UI Integrity
wwwemptechcom | 18005183874 | infoemptechcom
bull Follow on to 2009 Executive Order to reduce improper UI payments
bull Under UI Integrity rules states must not relieve employers of charges when they fail to respond timely or adequately to UI claims related agency requests bull Pattern of Failure as little as two instances
bull Employers cannot collude with employee to misuse unemployment claim system
bull Each state has unique rules method of enforcement being formulated
ldquoPattern of Failurerdquo Financial Impact Example
wwwemptechcom | 18005183874 | infoemptechcom
Case Study
bull ER With 100 SeparationsYr ldquoPattern of Failurerdquo classification bull Benefit$ paid to claimant prior to successful Appeal by ER
FACTORS FIGURESWeekly benefit amount Assume $300
Time to appeal 8 weeks
of claims lost on initial determination amp won by ER on Appeal
10 (out of 100 total separations)
Charge to ER UI account $24000 ($2400 x 10 claims) now NON-RECOVERABLE due to ldquoPattern of Failurerdquo
Additional Exposure Negative Impact bull May raise AUDIT RISK for other UI areas
bull May elevate ER experience rating
ldquoPattern of Failurerdquo Example Letter
wwwemptechcom | 18005183874 | infoemptechcom
Compliance amp Enforcement UI Integrity
wwwemptechcom | 18005183874 | infoemptechcom
bull Unemployment Claims ldquoTriggerrdquondash Claims filings from an EE associated with a MampA event may
trigger an ldquoevaluationrdquo of the succession reporting due to confusion surrounded which ER responsible for benefit charge
bull ldquoSDDSrdquo (SUTA Dumping Detection Software) ndash Many States using SDDS to ldquocatchrdquo EE migrations ndash Flags accounts for review to see if UI succession reporting
completed
bull ldquoQETPrdquo (Questionable Employment Tax Practices)ndash Under QETP IRS and 37 states sharing information and
specifically focusing on ET for auditsndash As of mid-2012 QETP has resulted in audits of 11000
employers
Audit Alert Inter-Agency Info Sharing
wwwemptechcom | 18005183874 | infoemptechcom
bull Questionable Employment Tax Practices ldquoQETPrdquo Initiativebull 37 States amp IRSbull 12000+ business examined thru lsquo12
bull Fed amp state info sharing data mining amp cross-agency task forces
bull Significant focus on worker classification
bull Significant incentives to states to aggressively audit
UI Tax Optimization Focus
wwwemptechcom | 18005183874 | infoemptechcom
bull UI Cost Control
bull UI Retrospective Review
UI Benefit Charges Material Expense
wwwemptechcom | 18005183874 | infoemptechcom
UTax
UI Integrity Oversight Plan
wwwemptechcom | 18005183874 | infoemptechcom
UTax
Designate a Person or Team
Total UI Claims (also by
statelocation)Which claims failed to be
timely adequate
Why Who
Track winloss for protests For
losses why WhoTrack winloss for
appeals Why Who
Impact on experience
rating Calculate cost
to organization
Find amp fix areas of organizational
weakness
UI Integrity Oversight Plan
wwwemptechcom | 18005183874 | infoemptechcom
UTax
ldquoACTrdquoProvide information to UI
agencies that isAccurateComplete
Timely
Best Practices
UI Claims Admin Reporting
wwwemptechcom | 18005183874 | infoemptechcom
ldquoFloat like a butterfly sting like a bee You cannot hit what you cannot seerdquo
Muhammad AliPeriodicReports
Separations
Claims
Win LoseBy Location
Liability Charges
Retro UI Review
wwwemptechcom | 18005183874 | infoemptechcom
General Evaluationbull Contact ALL UI jurisdictions
bull Perform account balancing (per state records) ndash QTR by QTR rearward review
bull Determine what credits found eligible for refund amp if debits found if correct
bull Research for any missing incomplete or untimely reporting on the account
bull Review all MampA past 3 years
bull Help reduce source of potential penalty or increased UI tax expense
Photo credit motone
UI Resources
wwwemptechcom | 18005183874 | infoemptechcom
bull 10 Questions for Internal SUTA Dumping Assessmentbull How Nonprofit Employers Can Reduce UI Costs bull FAQs on Employment Tax Compliance amp Savings in MampA
Go here to download three pages of UI Tips from Emptech
EmptechrsquosUI Tips
Download this one page checklist to assess the state of your UI Claims Administration
Is Your UCM
Broken
Get them here
Get our Top 15 Tips for MampA Tax Treatment
EmptechBlog
Go here to see the latest news on HR Payroll and Employment Tax topics
Thank You
wwwemptechcom | 18005183874 | infoemptechcom
Questions
Contact (203) 738-0545 rhendersonemptechcom
- Employment Tax Consulting- UI Claims Management- Credits- Talent Management- Electronic I-9- Verification of Employment
The Empire State (NY) UI Overview
wwwemptechcom | 18005183874 | infoemptechcom
bull Unemployment Rate (July 2015) 55
bull Trust Fund Positive Balance (July 2015) $8074000
bull rsquo15 Taxable Wage Base $10500 (and rising)
bull lsquo15 UI Tax Rates 21 min ndash 99 maxo 41 New ER UI
bull Paid back Title XII Federal UI loans
bull lsquo15 MinMax Weekly Benefit $100$420 (and rising)
bull State Information Data Exchange System (ldquoSIDESrdquo) UP
bull Voluntary Contribution state
The Garden State (NJ) UI Overview
wwwemptechcom | 18005183874 | infoemptechcom
bull Unemployment Rate (July 2015) 61
bull Trust Fund Positive Balance (July 2015) $255988000
bull lsquo15 Taxable Wage Base $32000
bull FY16 UI Tax Rates 12 min ndash 7 maxo New ER UI rate 34
bull lsquo15 Min Max Weekly Benefit $99-646
bull Voluntary Contribution state
The Garden State (NJ) UI Updates
wwwemptechcom | 18005183874 | infoemptechcom
Signed legislation 2014 thru July 2015
bull NJ AB3812 - requires electronic notification of death record to Dept to reduce UI fraud
bull NJ AB4189 - modifies short-time unemployment benefit lawbull NJ SB3097 - permits employee leasing companies to use ELC
experience rate or that of member companiesbull NJ SB1622 - withholding of state payments to vendors for delinquent
UI and disability taxesbull NJ SB2414 - amends DOLWD personnel access to UI claims receipt
and processing systembull NJ SB2082 - amends UI eligibility when claimant leaves work amp
subsequently laid off from work
The Constitution State (CT) UI Overview
wwwemptechcom | 18005183874 | infoemptechcom
bull Unemployment Rate (July 2015) 57
bull Trust Fund Loan Balance (Sept 2015) -$102M
bull rsquo15 Taxable Wage Base $15000
bull lsquo15 Tax Rates 19 min ndash 68 maxo New ER UI Rate 49
bull lsquo15 Potential FUTA Tax rate 21o 15 Basic FCR + 06 BCR add-ono Potential total FUTA cost per EE $189
bull rsquo15 MinMax Weekly Benefit $15 - 669
The Constitution State (CT) UI Updates
wwwemptechcom | 18005183874 | infoemptechcom
bullCT HB6707 Signed by Governor 7215 prevents ERrsquos base period account from being charged for unemployment benefits if claimant has been discharged or suspended because claimant lost their operatorrsquos license as a result of failing a drug alcohol test while off duty
bull CT is the only state subject to BCR add on (06) that has not applied for a waiver
o This is the second year CT has neglected to request a waiver
The Golden State (CA) UI Overview
wwwemptechcom | 18005183874 | infoemptechcom
bull Unemployment Rate (July 2015) 63
bull Trust Fund Loan Balance (Sept 2015) - $58B
bull lsquo15 Taxable Wage Base $7000
bull lsquo15 Tax Rates 15 min ndash 62 max o Schedule ldquoF+rdquo o 34 New ER rate
bull lsquo15 Potential FUTA Tax Rate 29o 15 Basic FCR + 14 BCR add ono $203 addtrsquol FUTA cost due to credit reduction and BCR
bull lsquo15 MinMax Weekly Benefit $40-450
The Golden State (CA) UI Updates
wwwemptechcom | 18005183874 | infoemptechcom
bull California is subject to the BCR add-on but has applied for a waivero Estimated BCR add on for 2015 is 14 o If the BCR waiver is approved the net cost is potentially $147 per
EE otherwise it could be $245 per EEo Final determination will be made by DOL after Nov 10 2015
bull Uber amp Lyft decisions on worker classification o EE vs independent contractor
bull UI appeals hearings ndash SB 1314 enacted extends deadline to file appeals
bull Administrative changes to law on UI Transfer of Experience when assets are acquired
bull SB 1131 enacted - members of LLC are not employees
The Buckeye State (OH) UI Overview
wwwemptechcom | 18005183874 | infoemptechcom
bull Unemployment Rate (July 2015) 5
bull Trust Fund Loan Balance (Sept 2015) - $875M
bull lsquo15 Taxable Wage Base $9000
bull lsquo15 Tax Rates 3 min ndash 108 max o New ER UI Tax Rate 27
bull lsquo15 Potential FUTA Tax Rate 26o 15 Basic FCR + 11 BCR add ono $182 addtrsquol FUTA cost due to credit reduction and BCR rsquo15
bull Voluntary Contribution state
Key Federal UI Legislation
wwwemptechcom | 18005183874 | infoemptechcom
bull 2004 SUTA Dumping Act
bull 2011 TAAE UI Integrity Act (Sec 252)
bull 2012 ATRAbull EE SS tax rate return to normal
Audience Questions
wwwemptechcom | 18005183874 | infoemptechcom
bull Changes in ET Structure
bull MampA Activity
2004 SUTA Dumping Prevention Act
wwwemptechcom | 18005183874 | infoemptechcom
bull SUTA Dumping (aka ldquounemployment tax avoidancerdquo) occurs by shifting EEs to a less-taxed entity to avoid paying a higher UI tax rate
bull Migration of EEs between legal entities (MampA consolidation etc) may trigger time-sensitive mandatory compliance reporting ndash misunderstood amp often missed
bull Penalties for missing or incorrect reporting can include max UI ratings civil ampor criminal penaltiesbull SUTA Dumping Detection Software for enforcement
bull Read Employerrsquos MampA ldquoTo Dordquo List
2011 Federal Act ndash UI Integrity
wwwemptechcom | 18005183874 | infoemptechcom
bull Follow on to 2009 Executive Order to reduce improper UI payments
bull Under UI Integrity rules states must not relieve employers of charges when they fail to respond timely or adequately to UI claims related agency requests bull Pattern of Failure as little as two instances
bull Employers cannot collude with employee to misuse unemployment claim system
bull Each state has unique rules method of enforcement being formulated
ldquoPattern of Failurerdquo Financial Impact Example
wwwemptechcom | 18005183874 | infoemptechcom
Case Study
bull ER With 100 SeparationsYr ldquoPattern of Failurerdquo classification bull Benefit$ paid to claimant prior to successful Appeal by ER
FACTORS FIGURESWeekly benefit amount Assume $300
Time to appeal 8 weeks
of claims lost on initial determination amp won by ER on Appeal
10 (out of 100 total separations)
Charge to ER UI account $24000 ($2400 x 10 claims) now NON-RECOVERABLE due to ldquoPattern of Failurerdquo
Additional Exposure Negative Impact bull May raise AUDIT RISK for other UI areas
bull May elevate ER experience rating
ldquoPattern of Failurerdquo Example Letter
wwwemptechcom | 18005183874 | infoemptechcom
Compliance amp Enforcement UI Integrity
wwwemptechcom | 18005183874 | infoemptechcom
bull Unemployment Claims ldquoTriggerrdquondash Claims filings from an EE associated with a MampA event may
trigger an ldquoevaluationrdquo of the succession reporting due to confusion surrounded which ER responsible for benefit charge
bull ldquoSDDSrdquo (SUTA Dumping Detection Software) ndash Many States using SDDS to ldquocatchrdquo EE migrations ndash Flags accounts for review to see if UI succession reporting
completed
bull ldquoQETPrdquo (Questionable Employment Tax Practices)ndash Under QETP IRS and 37 states sharing information and
specifically focusing on ET for auditsndash As of mid-2012 QETP has resulted in audits of 11000
employers
Audit Alert Inter-Agency Info Sharing
wwwemptechcom | 18005183874 | infoemptechcom
bull Questionable Employment Tax Practices ldquoQETPrdquo Initiativebull 37 States amp IRSbull 12000+ business examined thru lsquo12
bull Fed amp state info sharing data mining amp cross-agency task forces
bull Significant focus on worker classification
bull Significant incentives to states to aggressively audit
UI Tax Optimization Focus
wwwemptechcom | 18005183874 | infoemptechcom
bull UI Cost Control
bull UI Retrospective Review
UI Benefit Charges Material Expense
wwwemptechcom | 18005183874 | infoemptechcom
UTax
UI Integrity Oversight Plan
wwwemptechcom | 18005183874 | infoemptechcom
UTax
Designate a Person or Team
Total UI Claims (also by
statelocation)Which claims failed to be
timely adequate
Why Who
Track winloss for protests For
losses why WhoTrack winloss for
appeals Why Who
Impact on experience
rating Calculate cost
to organization
Find amp fix areas of organizational
weakness
UI Integrity Oversight Plan
wwwemptechcom | 18005183874 | infoemptechcom
UTax
ldquoACTrdquoProvide information to UI
agencies that isAccurateComplete
Timely
Best Practices
UI Claims Admin Reporting
wwwemptechcom | 18005183874 | infoemptechcom
ldquoFloat like a butterfly sting like a bee You cannot hit what you cannot seerdquo
Muhammad AliPeriodicReports
Separations
Claims
Win LoseBy Location
Liability Charges
Retro UI Review
wwwemptechcom | 18005183874 | infoemptechcom
General Evaluationbull Contact ALL UI jurisdictions
bull Perform account balancing (per state records) ndash QTR by QTR rearward review
bull Determine what credits found eligible for refund amp if debits found if correct
bull Research for any missing incomplete or untimely reporting on the account
bull Review all MampA past 3 years
bull Help reduce source of potential penalty or increased UI tax expense
Photo credit motone
UI Resources
wwwemptechcom | 18005183874 | infoemptechcom
bull 10 Questions for Internal SUTA Dumping Assessmentbull How Nonprofit Employers Can Reduce UI Costs bull FAQs on Employment Tax Compliance amp Savings in MampA
Go here to download three pages of UI Tips from Emptech
EmptechrsquosUI Tips
Download this one page checklist to assess the state of your UI Claims Administration
Is Your UCM
Broken
Get them here
Get our Top 15 Tips for MampA Tax Treatment
EmptechBlog
Go here to see the latest news on HR Payroll and Employment Tax topics
Thank You
wwwemptechcom | 18005183874 | infoemptechcom
Questions
Contact (203) 738-0545 rhendersonemptechcom
- Employment Tax Consulting- UI Claims Management- Credits- Talent Management- Electronic I-9- Verification of Employment
The Garden State (NJ) UI Overview
wwwemptechcom | 18005183874 | infoemptechcom
bull Unemployment Rate (July 2015) 61
bull Trust Fund Positive Balance (July 2015) $255988000
bull lsquo15 Taxable Wage Base $32000
bull FY16 UI Tax Rates 12 min ndash 7 maxo New ER UI rate 34
bull lsquo15 Min Max Weekly Benefit $99-646
bull Voluntary Contribution state
The Garden State (NJ) UI Updates
wwwemptechcom | 18005183874 | infoemptechcom
Signed legislation 2014 thru July 2015
bull NJ AB3812 - requires electronic notification of death record to Dept to reduce UI fraud
bull NJ AB4189 - modifies short-time unemployment benefit lawbull NJ SB3097 - permits employee leasing companies to use ELC
experience rate or that of member companiesbull NJ SB1622 - withholding of state payments to vendors for delinquent
UI and disability taxesbull NJ SB2414 - amends DOLWD personnel access to UI claims receipt
and processing systembull NJ SB2082 - amends UI eligibility when claimant leaves work amp
subsequently laid off from work
The Constitution State (CT) UI Overview
wwwemptechcom | 18005183874 | infoemptechcom
bull Unemployment Rate (July 2015) 57
bull Trust Fund Loan Balance (Sept 2015) -$102M
bull rsquo15 Taxable Wage Base $15000
bull lsquo15 Tax Rates 19 min ndash 68 maxo New ER UI Rate 49
bull lsquo15 Potential FUTA Tax rate 21o 15 Basic FCR + 06 BCR add-ono Potential total FUTA cost per EE $189
bull rsquo15 MinMax Weekly Benefit $15 - 669
The Constitution State (CT) UI Updates
wwwemptechcom | 18005183874 | infoemptechcom
bullCT HB6707 Signed by Governor 7215 prevents ERrsquos base period account from being charged for unemployment benefits if claimant has been discharged or suspended because claimant lost their operatorrsquos license as a result of failing a drug alcohol test while off duty
bull CT is the only state subject to BCR add on (06) that has not applied for a waiver
o This is the second year CT has neglected to request a waiver
The Golden State (CA) UI Overview
wwwemptechcom | 18005183874 | infoemptechcom
bull Unemployment Rate (July 2015) 63
bull Trust Fund Loan Balance (Sept 2015) - $58B
bull lsquo15 Taxable Wage Base $7000
bull lsquo15 Tax Rates 15 min ndash 62 max o Schedule ldquoF+rdquo o 34 New ER rate
bull lsquo15 Potential FUTA Tax Rate 29o 15 Basic FCR + 14 BCR add ono $203 addtrsquol FUTA cost due to credit reduction and BCR
bull lsquo15 MinMax Weekly Benefit $40-450
The Golden State (CA) UI Updates
wwwemptechcom | 18005183874 | infoemptechcom
bull California is subject to the BCR add-on but has applied for a waivero Estimated BCR add on for 2015 is 14 o If the BCR waiver is approved the net cost is potentially $147 per
EE otherwise it could be $245 per EEo Final determination will be made by DOL after Nov 10 2015
bull Uber amp Lyft decisions on worker classification o EE vs independent contractor
bull UI appeals hearings ndash SB 1314 enacted extends deadline to file appeals
bull Administrative changes to law on UI Transfer of Experience when assets are acquired
bull SB 1131 enacted - members of LLC are not employees
The Buckeye State (OH) UI Overview
wwwemptechcom | 18005183874 | infoemptechcom
bull Unemployment Rate (July 2015) 5
bull Trust Fund Loan Balance (Sept 2015) - $875M
bull lsquo15 Taxable Wage Base $9000
bull lsquo15 Tax Rates 3 min ndash 108 max o New ER UI Tax Rate 27
bull lsquo15 Potential FUTA Tax Rate 26o 15 Basic FCR + 11 BCR add ono $182 addtrsquol FUTA cost due to credit reduction and BCR rsquo15
bull Voluntary Contribution state
Key Federal UI Legislation
wwwemptechcom | 18005183874 | infoemptechcom
bull 2004 SUTA Dumping Act
bull 2011 TAAE UI Integrity Act (Sec 252)
bull 2012 ATRAbull EE SS tax rate return to normal
Audience Questions
wwwemptechcom | 18005183874 | infoemptechcom
bull Changes in ET Structure
bull MampA Activity
2004 SUTA Dumping Prevention Act
wwwemptechcom | 18005183874 | infoemptechcom
bull SUTA Dumping (aka ldquounemployment tax avoidancerdquo) occurs by shifting EEs to a less-taxed entity to avoid paying a higher UI tax rate
bull Migration of EEs between legal entities (MampA consolidation etc) may trigger time-sensitive mandatory compliance reporting ndash misunderstood amp often missed
bull Penalties for missing or incorrect reporting can include max UI ratings civil ampor criminal penaltiesbull SUTA Dumping Detection Software for enforcement
bull Read Employerrsquos MampA ldquoTo Dordquo List
2011 Federal Act ndash UI Integrity
wwwemptechcom | 18005183874 | infoemptechcom
bull Follow on to 2009 Executive Order to reduce improper UI payments
bull Under UI Integrity rules states must not relieve employers of charges when they fail to respond timely or adequately to UI claims related agency requests bull Pattern of Failure as little as two instances
bull Employers cannot collude with employee to misuse unemployment claim system
bull Each state has unique rules method of enforcement being formulated
ldquoPattern of Failurerdquo Financial Impact Example
wwwemptechcom | 18005183874 | infoemptechcom
Case Study
bull ER With 100 SeparationsYr ldquoPattern of Failurerdquo classification bull Benefit$ paid to claimant prior to successful Appeal by ER
FACTORS FIGURESWeekly benefit amount Assume $300
Time to appeal 8 weeks
of claims lost on initial determination amp won by ER on Appeal
10 (out of 100 total separations)
Charge to ER UI account $24000 ($2400 x 10 claims) now NON-RECOVERABLE due to ldquoPattern of Failurerdquo
Additional Exposure Negative Impact bull May raise AUDIT RISK for other UI areas
bull May elevate ER experience rating
ldquoPattern of Failurerdquo Example Letter
wwwemptechcom | 18005183874 | infoemptechcom
Compliance amp Enforcement UI Integrity
wwwemptechcom | 18005183874 | infoemptechcom
bull Unemployment Claims ldquoTriggerrdquondash Claims filings from an EE associated with a MampA event may
trigger an ldquoevaluationrdquo of the succession reporting due to confusion surrounded which ER responsible for benefit charge
bull ldquoSDDSrdquo (SUTA Dumping Detection Software) ndash Many States using SDDS to ldquocatchrdquo EE migrations ndash Flags accounts for review to see if UI succession reporting
completed
bull ldquoQETPrdquo (Questionable Employment Tax Practices)ndash Under QETP IRS and 37 states sharing information and
specifically focusing on ET for auditsndash As of mid-2012 QETP has resulted in audits of 11000
employers
Audit Alert Inter-Agency Info Sharing
wwwemptechcom | 18005183874 | infoemptechcom
bull Questionable Employment Tax Practices ldquoQETPrdquo Initiativebull 37 States amp IRSbull 12000+ business examined thru lsquo12
bull Fed amp state info sharing data mining amp cross-agency task forces
bull Significant focus on worker classification
bull Significant incentives to states to aggressively audit
UI Tax Optimization Focus
wwwemptechcom | 18005183874 | infoemptechcom
bull UI Cost Control
bull UI Retrospective Review
UI Benefit Charges Material Expense
wwwemptechcom | 18005183874 | infoemptechcom
UTax
UI Integrity Oversight Plan
wwwemptechcom | 18005183874 | infoemptechcom
UTax
Designate a Person or Team
Total UI Claims (also by
statelocation)Which claims failed to be
timely adequate
Why Who
Track winloss for protests For
losses why WhoTrack winloss for
appeals Why Who
Impact on experience
rating Calculate cost
to organization
Find amp fix areas of organizational
weakness
UI Integrity Oversight Plan
wwwemptechcom | 18005183874 | infoemptechcom
UTax
ldquoACTrdquoProvide information to UI
agencies that isAccurateComplete
Timely
Best Practices
UI Claims Admin Reporting
wwwemptechcom | 18005183874 | infoemptechcom
ldquoFloat like a butterfly sting like a bee You cannot hit what you cannot seerdquo
Muhammad AliPeriodicReports
Separations
Claims
Win LoseBy Location
Liability Charges
Retro UI Review
wwwemptechcom | 18005183874 | infoemptechcom
General Evaluationbull Contact ALL UI jurisdictions
bull Perform account balancing (per state records) ndash QTR by QTR rearward review
bull Determine what credits found eligible for refund amp if debits found if correct
bull Research for any missing incomplete or untimely reporting on the account
bull Review all MampA past 3 years
bull Help reduce source of potential penalty or increased UI tax expense
Photo credit motone
UI Resources
wwwemptechcom | 18005183874 | infoemptechcom
bull 10 Questions for Internal SUTA Dumping Assessmentbull How Nonprofit Employers Can Reduce UI Costs bull FAQs on Employment Tax Compliance amp Savings in MampA
Go here to download three pages of UI Tips from Emptech
EmptechrsquosUI Tips
Download this one page checklist to assess the state of your UI Claims Administration
Is Your UCM
Broken
Get them here
Get our Top 15 Tips for MampA Tax Treatment
EmptechBlog
Go here to see the latest news on HR Payroll and Employment Tax topics
Thank You
wwwemptechcom | 18005183874 | infoemptechcom
Questions
Contact (203) 738-0545 rhendersonemptechcom
- Employment Tax Consulting- UI Claims Management- Credits- Talent Management- Electronic I-9- Verification of Employment
The Garden State (NJ) UI Updates
wwwemptechcom | 18005183874 | infoemptechcom
Signed legislation 2014 thru July 2015
bull NJ AB3812 - requires electronic notification of death record to Dept to reduce UI fraud
bull NJ AB4189 - modifies short-time unemployment benefit lawbull NJ SB3097 - permits employee leasing companies to use ELC
experience rate or that of member companiesbull NJ SB1622 - withholding of state payments to vendors for delinquent
UI and disability taxesbull NJ SB2414 - amends DOLWD personnel access to UI claims receipt
and processing systembull NJ SB2082 - amends UI eligibility when claimant leaves work amp
subsequently laid off from work
The Constitution State (CT) UI Overview
wwwemptechcom | 18005183874 | infoemptechcom
bull Unemployment Rate (July 2015) 57
bull Trust Fund Loan Balance (Sept 2015) -$102M
bull rsquo15 Taxable Wage Base $15000
bull lsquo15 Tax Rates 19 min ndash 68 maxo New ER UI Rate 49
bull lsquo15 Potential FUTA Tax rate 21o 15 Basic FCR + 06 BCR add-ono Potential total FUTA cost per EE $189
bull rsquo15 MinMax Weekly Benefit $15 - 669
The Constitution State (CT) UI Updates
wwwemptechcom | 18005183874 | infoemptechcom
bullCT HB6707 Signed by Governor 7215 prevents ERrsquos base period account from being charged for unemployment benefits if claimant has been discharged or suspended because claimant lost their operatorrsquos license as a result of failing a drug alcohol test while off duty
bull CT is the only state subject to BCR add on (06) that has not applied for a waiver
o This is the second year CT has neglected to request a waiver
The Golden State (CA) UI Overview
wwwemptechcom | 18005183874 | infoemptechcom
bull Unemployment Rate (July 2015) 63
bull Trust Fund Loan Balance (Sept 2015) - $58B
bull lsquo15 Taxable Wage Base $7000
bull lsquo15 Tax Rates 15 min ndash 62 max o Schedule ldquoF+rdquo o 34 New ER rate
bull lsquo15 Potential FUTA Tax Rate 29o 15 Basic FCR + 14 BCR add ono $203 addtrsquol FUTA cost due to credit reduction and BCR
bull lsquo15 MinMax Weekly Benefit $40-450
The Golden State (CA) UI Updates
wwwemptechcom | 18005183874 | infoemptechcom
bull California is subject to the BCR add-on but has applied for a waivero Estimated BCR add on for 2015 is 14 o If the BCR waiver is approved the net cost is potentially $147 per
EE otherwise it could be $245 per EEo Final determination will be made by DOL after Nov 10 2015
bull Uber amp Lyft decisions on worker classification o EE vs independent contractor
bull UI appeals hearings ndash SB 1314 enacted extends deadline to file appeals
bull Administrative changes to law on UI Transfer of Experience when assets are acquired
bull SB 1131 enacted - members of LLC are not employees
The Buckeye State (OH) UI Overview
wwwemptechcom | 18005183874 | infoemptechcom
bull Unemployment Rate (July 2015) 5
bull Trust Fund Loan Balance (Sept 2015) - $875M
bull lsquo15 Taxable Wage Base $9000
bull lsquo15 Tax Rates 3 min ndash 108 max o New ER UI Tax Rate 27
bull lsquo15 Potential FUTA Tax Rate 26o 15 Basic FCR + 11 BCR add ono $182 addtrsquol FUTA cost due to credit reduction and BCR rsquo15
bull Voluntary Contribution state
Key Federal UI Legislation
wwwemptechcom | 18005183874 | infoemptechcom
bull 2004 SUTA Dumping Act
bull 2011 TAAE UI Integrity Act (Sec 252)
bull 2012 ATRAbull EE SS tax rate return to normal
Audience Questions
wwwemptechcom | 18005183874 | infoemptechcom
bull Changes in ET Structure
bull MampA Activity
2004 SUTA Dumping Prevention Act
wwwemptechcom | 18005183874 | infoemptechcom
bull SUTA Dumping (aka ldquounemployment tax avoidancerdquo) occurs by shifting EEs to a less-taxed entity to avoid paying a higher UI tax rate
bull Migration of EEs between legal entities (MampA consolidation etc) may trigger time-sensitive mandatory compliance reporting ndash misunderstood amp often missed
bull Penalties for missing or incorrect reporting can include max UI ratings civil ampor criminal penaltiesbull SUTA Dumping Detection Software for enforcement
bull Read Employerrsquos MampA ldquoTo Dordquo List
2011 Federal Act ndash UI Integrity
wwwemptechcom | 18005183874 | infoemptechcom
bull Follow on to 2009 Executive Order to reduce improper UI payments
bull Under UI Integrity rules states must not relieve employers of charges when they fail to respond timely or adequately to UI claims related agency requests bull Pattern of Failure as little as two instances
bull Employers cannot collude with employee to misuse unemployment claim system
bull Each state has unique rules method of enforcement being formulated
ldquoPattern of Failurerdquo Financial Impact Example
wwwemptechcom | 18005183874 | infoemptechcom
Case Study
bull ER With 100 SeparationsYr ldquoPattern of Failurerdquo classification bull Benefit$ paid to claimant prior to successful Appeal by ER
FACTORS FIGURESWeekly benefit amount Assume $300
Time to appeal 8 weeks
of claims lost on initial determination amp won by ER on Appeal
10 (out of 100 total separations)
Charge to ER UI account $24000 ($2400 x 10 claims) now NON-RECOVERABLE due to ldquoPattern of Failurerdquo
Additional Exposure Negative Impact bull May raise AUDIT RISK for other UI areas
bull May elevate ER experience rating
ldquoPattern of Failurerdquo Example Letter
wwwemptechcom | 18005183874 | infoemptechcom
Compliance amp Enforcement UI Integrity
wwwemptechcom | 18005183874 | infoemptechcom
bull Unemployment Claims ldquoTriggerrdquondash Claims filings from an EE associated with a MampA event may
trigger an ldquoevaluationrdquo of the succession reporting due to confusion surrounded which ER responsible for benefit charge
bull ldquoSDDSrdquo (SUTA Dumping Detection Software) ndash Many States using SDDS to ldquocatchrdquo EE migrations ndash Flags accounts for review to see if UI succession reporting
completed
bull ldquoQETPrdquo (Questionable Employment Tax Practices)ndash Under QETP IRS and 37 states sharing information and
specifically focusing on ET for auditsndash As of mid-2012 QETP has resulted in audits of 11000
employers
Audit Alert Inter-Agency Info Sharing
wwwemptechcom | 18005183874 | infoemptechcom
bull Questionable Employment Tax Practices ldquoQETPrdquo Initiativebull 37 States amp IRSbull 12000+ business examined thru lsquo12
bull Fed amp state info sharing data mining amp cross-agency task forces
bull Significant focus on worker classification
bull Significant incentives to states to aggressively audit
UI Tax Optimization Focus
wwwemptechcom | 18005183874 | infoemptechcom
bull UI Cost Control
bull UI Retrospective Review
UI Benefit Charges Material Expense
wwwemptechcom | 18005183874 | infoemptechcom
UTax
UI Integrity Oversight Plan
wwwemptechcom | 18005183874 | infoemptechcom
UTax
Designate a Person or Team
Total UI Claims (also by
statelocation)Which claims failed to be
timely adequate
Why Who
Track winloss for protests For
losses why WhoTrack winloss for
appeals Why Who
Impact on experience
rating Calculate cost
to organization
Find amp fix areas of organizational
weakness
UI Integrity Oversight Plan
wwwemptechcom | 18005183874 | infoemptechcom
UTax
ldquoACTrdquoProvide information to UI
agencies that isAccurateComplete
Timely
Best Practices
UI Claims Admin Reporting
wwwemptechcom | 18005183874 | infoemptechcom
ldquoFloat like a butterfly sting like a bee You cannot hit what you cannot seerdquo
Muhammad AliPeriodicReports
Separations
Claims
Win LoseBy Location
Liability Charges
Retro UI Review
wwwemptechcom | 18005183874 | infoemptechcom
General Evaluationbull Contact ALL UI jurisdictions
bull Perform account balancing (per state records) ndash QTR by QTR rearward review
bull Determine what credits found eligible for refund amp if debits found if correct
bull Research for any missing incomplete or untimely reporting on the account
bull Review all MampA past 3 years
bull Help reduce source of potential penalty or increased UI tax expense
Photo credit motone
UI Resources
wwwemptechcom | 18005183874 | infoemptechcom
bull 10 Questions for Internal SUTA Dumping Assessmentbull How Nonprofit Employers Can Reduce UI Costs bull FAQs on Employment Tax Compliance amp Savings in MampA
Go here to download three pages of UI Tips from Emptech
EmptechrsquosUI Tips
Download this one page checklist to assess the state of your UI Claims Administration
Is Your UCM
Broken
Get them here
Get our Top 15 Tips for MampA Tax Treatment
EmptechBlog
Go here to see the latest news on HR Payroll and Employment Tax topics
Thank You
wwwemptechcom | 18005183874 | infoemptechcom
Questions
Contact (203) 738-0545 rhendersonemptechcom
- Employment Tax Consulting- UI Claims Management- Credits- Talent Management- Electronic I-9- Verification of Employment
The Constitution State (CT) UI Overview
wwwemptechcom | 18005183874 | infoemptechcom
bull Unemployment Rate (July 2015) 57
bull Trust Fund Loan Balance (Sept 2015) -$102M
bull rsquo15 Taxable Wage Base $15000
bull lsquo15 Tax Rates 19 min ndash 68 maxo New ER UI Rate 49
bull lsquo15 Potential FUTA Tax rate 21o 15 Basic FCR + 06 BCR add-ono Potential total FUTA cost per EE $189
bull rsquo15 MinMax Weekly Benefit $15 - 669
The Constitution State (CT) UI Updates
wwwemptechcom | 18005183874 | infoemptechcom
bullCT HB6707 Signed by Governor 7215 prevents ERrsquos base period account from being charged for unemployment benefits if claimant has been discharged or suspended because claimant lost their operatorrsquos license as a result of failing a drug alcohol test while off duty
bull CT is the only state subject to BCR add on (06) that has not applied for a waiver
o This is the second year CT has neglected to request a waiver
The Golden State (CA) UI Overview
wwwemptechcom | 18005183874 | infoemptechcom
bull Unemployment Rate (July 2015) 63
bull Trust Fund Loan Balance (Sept 2015) - $58B
bull lsquo15 Taxable Wage Base $7000
bull lsquo15 Tax Rates 15 min ndash 62 max o Schedule ldquoF+rdquo o 34 New ER rate
bull lsquo15 Potential FUTA Tax Rate 29o 15 Basic FCR + 14 BCR add ono $203 addtrsquol FUTA cost due to credit reduction and BCR
bull lsquo15 MinMax Weekly Benefit $40-450
The Golden State (CA) UI Updates
wwwemptechcom | 18005183874 | infoemptechcom
bull California is subject to the BCR add-on but has applied for a waivero Estimated BCR add on for 2015 is 14 o If the BCR waiver is approved the net cost is potentially $147 per
EE otherwise it could be $245 per EEo Final determination will be made by DOL after Nov 10 2015
bull Uber amp Lyft decisions on worker classification o EE vs independent contractor
bull UI appeals hearings ndash SB 1314 enacted extends deadline to file appeals
bull Administrative changes to law on UI Transfer of Experience when assets are acquired
bull SB 1131 enacted - members of LLC are not employees
The Buckeye State (OH) UI Overview
wwwemptechcom | 18005183874 | infoemptechcom
bull Unemployment Rate (July 2015) 5
bull Trust Fund Loan Balance (Sept 2015) - $875M
bull lsquo15 Taxable Wage Base $9000
bull lsquo15 Tax Rates 3 min ndash 108 max o New ER UI Tax Rate 27
bull lsquo15 Potential FUTA Tax Rate 26o 15 Basic FCR + 11 BCR add ono $182 addtrsquol FUTA cost due to credit reduction and BCR rsquo15
bull Voluntary Contribution state
Key Federal UI Legislation
wwwemptechcom | 18005183874 | infoemptechcom
bull 2004 SUTA Dumping Act
bull 2011 TAAE UI Integrity Act (Sec 252)
bull 2012 ATRAbull EE SS tax rate return to normal
Audience Questions
wwwemptechcom | 18005183874 | infoemptechcom
bull Changes in ET Structure
bull MampA Activity
2004 SUTA Dumping Prevention Act
wwwemptechcom | 18005183874 | infoemptechcom
bull SUTA Dumping (aka ldquounemployment tax avoidancerdquo) occurs by shifting EEs to a less-taxed entity to avoid paying a higher UI tax rate
bull Migration of EEs between legal entities (MampA consolidation etc) may trigger time-sensitive mandatory compliance reporting ndash misunderstood amp often missed
bull Penalties for missing or incorrect reporting can include max UI ratings civil ampor criminal penaltiesbull SUTA Dumping Detection Software for enforcement
bull Read Employerrsquos MampA ldquoTo Dordquo List
2011 Federal Act ndash UI Integrity
wwwemptechcom | 18005183874 | infoemptechcom
bull Follow on to 2009 Executive Order to reduce improper UI payments
bull Under UI Integrity rules states must not relieve employers of charges when they fail to respond timely or adequately to UI claims related agency requests bull Pattern of Failure as little as two instances
bull Employers cannot collude with employee to misuse unemployment claim system
bull Each state has unique rules method of enforcement being formulated
ldquoPattern of Failurerdquo Financial Impact Example
wwwemptechcom | 18005183874 | infoemptechcom
Case Study
bull ER With 100 SeparationsYr ldquoPattern of Failurerdquo classification bull Benefit$ paid to claimant prior to successful Appeal by ER
FACTORS FIGURESWeekly benefit amount Assume $300
Time to appeal 8 weeks
of claims lost on initial determination amp won by ER on Appeal
10 (out of 100 total separations)
Charge to ER UI account $24000 ($2400 x 10 claims) now NON-RECOVERABLE due to ldquoPattern of Failurerdquo
Additional Exposure Negative Impact bull May raise AUDIT RISK for other UI areas
bull May elevate ER experience rating
ldquoPattern of Failurerdquo Example Letter
wwwemptechcom | 18005183874 | infoemptechcom
Compliance amp Enforcement UI Integrity
wwwemptechcom | 18005183874 | infoemptechcom
bull Unemployment Claims ldquoTriggerrdquondash Claims filings from an EE associated with a MampA event may
trigger an ldquoevaluationrdquo of the succession reporting due to confusion surrounded which ER responsible for benefit charge
bull ldquoSDDSrdquo (SUTA Dumping Detection Software) ndash Many States using SDDS to ldquocatchrdquo EE migrations ndash Flags accounts for review to see if UI succession reporting
completed
bull ldquoQETPrdquo (Questionable Employment Tax Practices)ndash Under QETP IRS and 37 states sharing information and
specifically focusing on ET for auditsndash As of mid-2012 QETP has resulted in audits of 11000
employers
Audit Alert Inter-Agency Info Sharing
wwwemptechcom | 18005183874 | infoemptechcom
bull Questionable Employment Tax Practices ldquoQETPrdquo Initiativebull 37 States amp IRSbull 12000+ business examined thru lsquo12
bull Fed amp state info sharing data mining amp cross-agency task forces
bull Significant focus on worker classification
bull Significant incentives to states to aggressively audit
UI Tax Optimization Focus
wwwemptechcom | 18005183874 | infoemptechcom
bull UI Cost Control
bull UI Retrospective Review
UI Benefit Charges Material Expense
wwwemptechcom | 18005183874 | infoemptechcom
UTax
UI Integrity Oversight Plan
wwwemptechcom | 18005183874 | infoemptechcom
UTax
Designate a Person or Team
Total UI Claims (also by
statelocation)Which claims failed to be
timely adequate
Why Who
Track winloss for protests For
losses why WhoTrack winloss for
appeals Why Who
Impact on experience
rating Calculate cost
to organization
Find amp fix areas of organizational
weakness
UI Integrity Oversight Plan
wwwemptechcom | 18005183874 | infoemptechcom
UTax
ldquoACTrdquoProvide information to UI
agencies that isAccurateComplete
Timely
Best Practices
UI Claims Admin Reporting
wwwemptechcom | 18005183874 | infoemptechcom
ldquoFloat like a butterfly sting like a bee You cannot hit what you cannot seerdquo
Muhammad AliPeriodicReports
Separations
Claims
Win LoseBy Location
Liability Charges
Retro UI Review
wwwemptechcom | 18005183874 | infoemptechcom
General Evaluationbull Contact ALL UI jurisdictions
bull Perform account balancing (per state records) ndash QTR by QTR rearward review
bull Determine what credits found eligible for refund amp if debits found if correct
bull Research for any missing incomplete or untimely reporting on the account
bull Review all MampA past 3 years
bull Help reduce source of potential penalty or increased UI tax expense
Photo credit motone
UI Resources
wwwemptechcom | 18005183874 | infoemptechcom
bull 10 Questions for Internal SUTA Dumping Assessmentbull How Nonprofit Employers Can Reduce UI Costs bull FAQs on Employment Tax Compliance amp Savings in MampA
Go here to download three pages of UI Tips from Emptech
EmptechrsquosUI Tips
Download this one page checklist to assess the state of your UI Claims Administration
Is Your UCM
Broken
Get them here
Get our Top 15 Tips for MampA Tax Treatment
EmptechBlog
Go here to see the latest news on HR Payroll and Employment Tax topics
Thank You
wwwemptechcom | 18005183874 | infoemptechcom
Questions
Contact (203) 738-0545 rhendersonemptechcom
- Employment Tax Consulting- UI Claims Management- Credits- Talent Management- Electronic I-9- Verification of Employment
The Constitution State (CT) UI Updates
wwwemptechcom | 18005183874 | infoemptechcom
bullCT HB6707 Signed by Governor 7215 prevents ERrsquos base period account from being charged for unemployment benefits if claimant has been discharged or suspended because claimant lost their operatorrsquos license as a result of failing a drug alcohol test while off duty
bull CT is the only state subject to BCR add on (06) that has not applied for a waiver
o This is the second year CT has neglected to request a waiver
The Golden State (CA) UI Overview
wwwemptechcom | 18005183874 | infoemptechcom
bull Unemployment Rate (July 2015) 63
bull Trust Fund Loan Balance (Sept 2015) - $58B
bull lsquo15 Taxable Wage Base $7000
bull lsquo15 Tax Rates 15 min ndash 62 max o Schedule ldquoF+rdquo o 34 New ER rate
bull lsquo15 Potential FUTA Tax Rate 29o 15 Basic FCR + 14 BCR add ono $203 addtrsquol FUTA cost due to credit reduction and BCR
bull lsquo15 MinMax Weekly Benefit $40-450
The Golden State (CA) UI Updates
wwwemptechcom | 18005183874 | infoemptechcom
bull California is subject to the BCR add-on but has applied for a waivero Estimated BCR add on for 2015 is 14 o If the BCR waiver is approved the net cost is potentially $147 per
EE otherwise it could be $245 per EEo Final determination will be made by DOL after Nov 10 2015
bull Uber amp Lyft decisions on worker classification o EE vs independent contractor
bull UI appeals hearings ndash SB 1314 enacted extends deadline to file appeals
bull Administrative changes to law on UI Transfer of Experience when assets are acquired
bull SB 1131 enacted - members of LLC are not employees
The Buckeye State (OH) UI Overview
wwwemptechcom | 18005183874 | infoemptechcom
bull Unemployment Rate (July 2015) 5
bull Trust Fund Loan Balance (Sept 2015) - $875M
bull lsquo15 Taxable Wage Base $9000
bull lsquo15 Tax Rates 3 min ndash 108 max o New ER UI Tax Rate 27
bull lsquo15 Potential FUTA Tax Rate 26o 15 Basic FCR + 11 BCR add ono $182 addtrsquol FUTA cost due to credit reduction and BCR rsquo15
bull Voluntary Contribution state
Key Federal UI Legislation
wwwemptechcom | 18005183874 | infoemptechcom
bull 2004 SUTA Dumping Act
bull 2011 TAAE UI Integrity Act (Sec 252)
bull 2012 ATRAbull EE SS tax rate return to normal
Audience Questions
wwwemptechcom | 18005183874 | infoemptechcom
bull Changes in ET Structure
bull MampA Activity
2004 SUTA Dumping Prevention Act
wwwemptechcom | 18005183874 | infoemptechcom
bull SUTA Dumping (aka ldquounemployment tax avoidancerdquo) occurs by shifting EEs to a less-taxed entity to avoid paying a higher UI tax rate
bull Migration of EEs between legal entities (MampA consolidation etc) may trigger time-sensitive mandatory compliance reporting ndash misunderstood amp often missed
bull Penalties for missing or incorrect reporting can include max UI ratings civil ampor criminal penaltiesbull SUTA Dumping Detection Software for enforcement
bull Read Employerrsquos MampA ldquoTo Dordquo List
2011 Federal Act ndash UI Integrity
wwwemptechcom | 18005183874 | infoemptechcom
bull Follow on to 2009 Executive Order to reduce improper UI payments
bull Under UI Integrity rules states must not relieve employers of charges when they fail to respond timely or adequately to UI claims related agency requests bull Pattern of Failure as little as two instances
bull Employers cannot collude with employee to misuse unemployment claim system
bull Each state has unique rules method of enforcement being formulated
ldquoPattern of Failurerdquo Financial Impact Example
wwwemptechcom | 18005183874 | infoemptechcom
Case Study
bull ER With 100 SeparationsYr ldquoPattern of Failurerdquo classification bull Benefit$ paid to claimant prior to successful Appeal by ER
FACTORS FIGURESWeekly benefit amount Assume $300
Time to appeal 8 weeks
of claims lost on initial determination amp won by ER on Appeal
10 (out of 100 total separations)
Charge to ER UI account $24000 ($2400 x 10 claims) now NON-RECOVERABLE due to ldquoPattern of Failurerdquo
Additional Exposure Negative Impact bull May raise AUDIT RISK for other UI areas
bull May elevate ER experience rating
ldquoPattern of Failurerdquo Example Letter
wwwemptechcom | 18005183874 | infoemptechcom
Compliance amp Enforcement UI Integrity
wwwemptechcom | 18005183874 | infoemptechcom
bull Unemployment Claims ldquoTriggerrdquondash Claims filings from an EE associated with a MampA event may
trigger an ldquoevaluationrdquo of the succession reporting due to confusion surrounded which ER responsible for benefit charge
bull ldquoSDDSrdquo (SUTA Dumping Detection Software) ndash Many States using SDDS to ldquocatchrdquo EE migrations ndash Flags accounts for review to see if UI succession reporting
completed
bull ldquoQETPrdquo (Questionable Employment Tax Practices)ndash Under QETP IRS and 37 states sharing information and
specifically focusing on ET for auditsndash As of mid-2012 QETP has resulted in audits of 11000
employers
Audit Alert Inter-Agency Info Sharing
wwwemptechcom | 18005183874 | infoemptechcom
bull Questionable Employment Tax Practices ldquoQETPrdquo Initiativebull 37 States amp IRSbull 12000+ business examined thru lsquo12
bull Fed amp state info sharing data mining amp cross-agency task forces
bull Significant focus on worker classification
bull Significant incentives to states to aggressively audit
UI Tax Optimization Focus
wwwemptechcom | 18005183874 | infoemptechcom
bull UI Cost Control
bull UI Retrospective Review
UI Benefit Charges Material Expense
wwwemptechcom | 18005183874 | infoemptechcom
UTax
UI Integrity Oversight Plan
wwwemptechcom | 18005183874 | infoemptechcom
UTax
Designate a Person or Team
Total UI Claims (also by
statelocation)Which claims failed to be
timely adequate
Why Who
Track winloss for protests For
losses why WhoTrack winloss for
appeals Why Who
Impact on experience
rating Calculate cost
to organization
Find amp fix areas of organizational
weakness
UI Integrity Oversight Plan
wwwemptechcom | 18005183874 | infoemptechcom
UTax
ldquoACTrdquoProvide information to UI
agencies that isAccurateComplete
Timely
Best Practices
UI Claims Admin Reporting
wwwemptechcom | 18005183874 | infoemptechcom
ldquoFloat like a butterfly sting like a bee You cannot hit what you cannot seerdquo
Muhammad AliPeriodicReports
Separations
Claims
Win LoseBy Location
Liability Charges
Retro UI Review
wwwemptechcom | 18005183874 | infoemptechcom
General Evaluationbull Contact ALL UI jurisdictions
bull Perform account balancing (per state records) ndash QTR by QTR rearward review
bull Determine what credits found eligible for refund amp if debits found if correct
bull Research for any missing incomplete or untimely reporting on the account
bull Review all MampA past 3 years
bull Help reduce source of potential penalty or increased UI tax expense
Photo credit motone
UI Resources
wwwemptechcom | 18005183874 | infoemptechcom
bull 10 Questions for Internal SUTA Dumping Assessmentbull How Nonprofit Employers Can Reduce UI Costs bull FAQs on Employment Tax Compliance amp Savings in MampA
Go here to download three pages of UI Tips from Emptech
EmptechrsquosUI Tips
Download this one page checklist to assess the state of your UI Claims Administration
Is Your UCM
Broken
Get them here
Get our Top 15 Tips for MampA Tax Treatment
EmptechBlog
Go here to see the latest news on HR Payroll and Employment Tax topics
Thank You
wwwemptechcom | 18005183874 | infoemptechcom
Questions
Contact (203) 738-0545 rhendersonemptechcom
- Employment Tax Consulting- UI Claims Management- Credits- Talent Management- Electronic I-9- Verification of Employment
The Golden State (CA) UI Overview
wwwemptechcom | 18005183874 | infoemptechcom
bull Unemployment Rate (July 2015) 63
bull Trust Fund Loan Balance (Sept 2015) - $58B
bull lsquo15 Taxable Wage Base $7000
bull lsquo15 Tax Rates 15 min ndash 62 max o Schedule ldquoF+rdquo o 34 New ER rate
bull lsquo15 Potential FUTA Tax Rate 29o 15 Basic FCR + 14 BCR add ono $203 addtrsquol FUTA cost due to credit reduction and BCR
bull lsquo15 MinMax Weekly Benefit $40-450
The Golden State (CA) UI Updates
wwwemptechcom | 18005183874 | infoemptechcom
bull California is subject to the BCR add-on but has applied for a waivero Estimated BCR add on for 2015 is 14 o If the BCR waiver is approved the net cost is potentially $147 per
EE otherwise it could be $245 per EEo Final determination will be made by DOL after Nov 10 2015
bull Uber amp Lyft decisions on worker classification o EE vs independent contractor
bull UI appeals hearings ndash SB 1314 enacted extends deadline to file appeals
bull Administrative changes to law on UI Transfer of Experience when assets are acquired
bull SB 1131 enacted - members of LLC are not employees
The Buckeye State (OH) UI Overview
wwwemptechcom | 18005183874 | infoemptechcom
bull Unemployment Rate (July 2015) 5
bull Trust Fund Loan Balance (Sept 2015) - $875M
bull lsquo15 Taxable Wage Base $9000
bull lsquo15 Tax Rates 3 min ndash 108 max o New ER UI Tax Rate 27
bull lsquo15 Potential FUTA Tax Rate 26o 15 Basic FCR + 11 BCR add ono $182 addtrsquol FUTA cost due to credit reduction and BCR rsquo15
bull Voluntary Contribution state
Key Federal UI Legislation
wwwemptechcom | 18005183874 | infoemptechcom
bull 2004 SUTA Dumping Act
bull 2011 TAAE UI Integrity Act (Sec 252)
bull 2012 ATRAbull EE SS tax rate return to normal
Audience Questions
wwwemptechcom | 18005183874 | infoemptechcom
bull Changes in ET Structure
bull MampA Activity
2004 SUTA Dumping Prevention Act
wwwemptechcom | 18005183874 | infoemptechcom
bull SUTA Dumping (aka ldquounemployment tax avoidancerdquo) occurs by shifting EEs to a less-taxed entity to avoid paying a higher UI tax rate
bull Migration of EEs between legal entities (MampA consolidation etc) may trigger time-sensitive mandatory compliance reporting ndash misunderstood amp often missed
bull Penalties for missing or incorrect reporting can include max UI ratings civil ampor criminal penaltiesbull SUTA Dumping Detection Software for enforcement
bull Read Employerrsquos MampA ldquoTo Dordquo List
2011 Federal Act ndash UI Integrity
wwwemptechcom | 18005183874 | infoemptechcom
bull Follow on to 2009 Executive Order to reduce improper UI payments
bull Under UI Integrity rules states must not relieve employers of charges when they fail to respond timely or adequately to UI claims related agency requests bull Pattern of Failure as little as two instances
bull Employers cannot collude with employee to misuse unemployment claim system
bull Each state has unique rules method of enforcement being formulated
ldquoPattern of Failurerdquo Financial Impact Example
wwwemptechcom | 18005183874 | infoemptechcom
Case Study
bull ER With 100 SeparationsYr ldquoPattern of Failurerdquo classification bull Benefit$ paid to claimant prior to successful Appeal by ER
FACTORS FIGURESWeekly benefit amount Assume $300
Time to appeal 8 weeks
of claims lost on initial determination amp won by ER on Appeal
10 (out of 100 total separations)
Charge to ER UI account $24000 ($2400 x 10 claims) now NON-RECOVERABLE due to ldquoPattern of Failurerdquo
Additional Exposure Negative Impact bull May raise AUDIT RISK for other UI areas
bull May elevate ER experience rating
ldquoPattern of Failurerdquo Example Letter
wwwemptechcom | 18005183874 | infoemptechcom
Compliance amp Enforcement UI Integrity
wwwemptechcom | 18005183874 | infoemptechcom
bull Unemployment Claims ldquoTriggerrdquondash Claims filings from an EE associated with a MampA event may
trigger an ldquoevaluationrdquo of the succession reporting due to confusion surrounded which ER responsible for benefit charge
bull ldquoSDDSrdquo (SUTA Dumping Detection Software) ndash Many States using SDDS to ldquocatchrdquo EE migrations ndash Flags accounts for review to see if UI succession reporting
completed
bull ldquoQETPrdquo (Questionable Employment Tax Practices)ndash Under QETP IRS and 37 states sharing information and
specifically focusing on ET for auditsndash As of mid-2012 QETP has resulted in audits of 11000
employers
Audit Alert Inter-Agency Info Sharing
wwwemptechcom | 18005183874 | infoemptechcom
bull Questionable Employment Tax Practices ldquoQETPrdquo Initiativebull 37 States amp IRSbull 12000+ business examined thru lsquo12
bull Fed amp state info sharing data mining amp cross-agency task forces
bull Significant focus on worker classification
bull Significant incentives to states to aggressively audit
UI Tax Optimization Focus
wwwemptechcom | 18005183874 | infoemptechcom
bull UI Cost Control
bull UI Retrospective Review
UI Benefit Charges Material Expense
wwwemptechcom | 18005183874 | infoemptechcom
UTax
UI Integrity Oversight Plan
wwwemptechcom | 18005183874 | infoemptechcom
UTax
Designate a Person or Team
Total UI Claims (also by
statelocation)Which claims failed to be
timely adequate
Why Who
Track winloss for protests For
losses why WhoTrack winloss for
appeals Why Who
Impact on experience
rating Calculate cost
to organization
Find amp fix areas of organizational
weakness
UI Integrity Oversight Plan
wwwemptechcom | 18005183874 | infoemptechcom
UTax
ldquoACTrdquoProvide information to UI
agencies that isAccurateComplete
Timely
Best Practices
UI Claims Admin Reporting
wwwemptechcom | 18005183874 | infoemptechcom
ldquoFloat like a butterfly sting like a bee You cannot hit what you cannot seerdquo
Muhammad AliPeriodicReports
Separations
Claims
Win LoseBy Location
Liability Charges
Retro UI Review
wwwemptechcom | 18005183874 | infoemptechcom
General Evaluationbull Contact ALL UI jurisdictions
bull Perform account balancing (per state records) ndash QTR by QTR rearward review
bull Determine what credits found eligible for refund amp if debits found if correct
bull Research for any missing incomplete or untimely reporting on the account
bull Review all MampA past 3 years
bull Help reduce source of potential penalty or increased UI tax expense
Photo credit motone
UI Resources
wwwemptechcom | 18005183874 | infoemptechcom
bull 10 Questions for Internal SUTA Dumping Assessmentbull How Nonprofit Employers Can Reduce UI Costs bull FAQs on Employment Tax Compliance amp Savings in MampA
Go here to download three pages of UI Tips from Emptech
EmptechrsquosUI Tips
Download this one page checklist to assess the state of your UI Claims Administration
Is Your UCM
Broken
Get them here
Get our Top 15 Tips for MampA Tax Treatment
EmptechBlog
Go here to see the latest news on HR Payroll and Employment Tax topics
Thank You
wwwemptechcom | 18005183874 | infoemptechcom
Questions
Contact (203) 738-0545 rhendersonemptechcom
- Employment Tax Consulting- UI Claims Management- Credits- Talent Management- Electronic I-9- Verification of Employment
The Golden State (CA) UI Updates
wwwemptechcom | 18005183874 | infoemptechcom
bull California is subject to the BCR add-on but has applied for a waivero Estimated BCR add on for 2015 is 14 o If the BCR waiver is approved the net cost is potentially $147 per
EE otherwise it could be $245 per EEo Final determination will be made by DOL after Nov 10 2015
bull Uber amp Lyft decisions on worker classification o EE vs independent contractor
bull UI appeals hearings ndash SB 1314 enacted extends deadline to file appeals
bull Administrative changes to law on UI Transfer of Experience when assets are acquired
bull SB 1131 enacted - members of LLC are not employees
The Buckeye State (OH) UI Overview
wwwemptechcom | 18005183874 | infoemptechcom
bull Unemployment Rate (July 2015) 5
bull Trust Fund Loan Balance (Sept 2015) - $875M
bull lsquo15 Taxable Wage Base $9000
bull lsquo15 Tax Rates 3 min ndash 108 max o New ER UI Tax Rate 27
bull lsquo15 Potential FUTA Tax Rate 26o 15 Basic FCR + 11 BCR add ono $182 addtrsquol FUTA cost due to credit reduction and BCR rsquo15
bull Voluntary Contribution state
Key Federal UI Legislation
wwwemptechcom | 18005183874 | infoemptechcom
bull 2004 SUTA Dumping Act
bull 2011 TAAE UI Integrity Act (Sec 252)
bull 2012 ATRAbull EE SS tax rate return to normal
Audience Questions
wwwemptechcom | 18005183874 | infoemptechcom
bull Changes in ET Structure
bull MampA Activity
2004 SUTA Dumping Prevention Act
wwwemptechcom | 18005183874 | infoemptechcom
bull SUTA Dumping (aka ldquounemployment tax avoidancerdquo) occurs by shifting EEs to a less-taxed entity to avoid paying a higher UI tax rate
bull Migration of EEs between legal entities (MampA consolidation etc) may trigger time-sensitive mandatory compliance reporting ndash misunderstood amp often missed
bull Penalties for missing or incorrect reporting can include max UI ratings civil ampor criminal penaltiesbull SUTA Dumping Detection Software for enforcement
bull Read Employerrsquos MampA ldquoTo Dordquo List
2011 Federal Act ndash UI Integrity
wwwemptechcom | 18005183874 | infoemptechcom
bull Follow on to 2009 Executive Order to reduce improper UI payments
bull Under UI Integrity rules states must not relieve employers of charges when they fail to respond timely or adequately to UI claims related agency requests bull Pattern of Failure as little as two instances
bull Employers cannot collude with employee to misuse unemployment claim system
bull Each state has unique rules method of enforcement being formulated
ldquoPattern of Failurerdquo Financial Impact Example
wwwemptechcom | 18005183874 | infoemptechcom
Case Study
bull ER With 100 SeparationsYr ldquoPattern of Failurerdquo classification bull Benefit$ paid to claimant prior to successful Appeal by ER
FACTORS FIGURESWeekly benefit amount Assume $300
Time to appeal 8 weeks
of claims lost on initial determination amp won by ER on Appeal
10 (out of 100 total separations)
Charge to ER UI account $24000 ($2400 x 10 claims) now NON-RECOVERABLE due to ldquoPattern of Failurerdquo
Additional Exposure Negative Impact bull May raise AUDIT RISK for other UI areas
bull May elevate ER experience rating
ldquoPattern of Failurerdquo Example Letter
wwwemptechcom | 18005183874 | infoemptechcom
Compliance amp Enforcement UI Integrity
wwwemptechcom | 18005183874 | infoemptechcom
bull Unemployment Claims ldquoTriggerrdquondash Claims filings from an EE associated with a MampA event may
trigger an ldquoevaluationrdquo of the succession reporting due to confusion surrounded which ER responsible for benefit charge
bull ldquoSDDSrdquo (SUTA Dumping Detection Software) ndash Many States using SDDS to ldquocatchrdquo EE migrations ndash Flags accounts for review to see if UI succession reporting
completed
bull ldquoQETPrdquo (Questionable Employment Tax Practices)ndash Under QETP IRS and 37 states sharing information and
specifically focusing on ET for auditsndash As of mid-2012 QETP has resulted in audits of 11000
employers
Audit Alert Inter-Agency Info Sharing
wwwemptechcom | 18005183874 | infoemptechcom
bull Questionable Employment Tax Practices ldquoQETPrdquo Initiativebull 37 States amp IRSbull 12000+ business examined thru lsquo12
bull Fed amp state info sharing data mining amp cross-agency task forces
bull Significant focus on worker classification
bull Significant incentives to states to aggressively audit
UI Tax Optimization Focus
wwwemptechcom | 18005183874 | infoemptechcom
bull UI Cost Control
bull UI Retrospective Review
UI Benefit Charges Material Expense
wwwemptechcom | 18005183874 | infoemptechcom
UTax
UI Integrity Oversight Plan
wwwemptechcom | 18005183874 | infoemptechcom
UTax
Designate a Person or Team
Total UI Claims (also by
statelocation)Which claims failed to be
timely adequate
Why Who
Track winloss for protests For
losses why WhoTrack winloss for
appeals Why Who
Impact on experience
rating Calculate cost
to organization
Find amp fix areas of organizational
weakness
UI Integrity Oversight Plan
wwwemptechcom | 18005183874 | infoemptechcom
UTax
ldquoACTrdquoProvide information to UI
agencies that isAccurateComplete
Timely
Best Practices
UI Claims Admin Reporting
wwwemptechcom | 18005183874 | infoemptechcom
ldquoFloat like a butterfly sting like a bee You cannot hit what you cannot seerdquo
Muhammad AliPeriodicReports
Separations
Claims
Win LoseBy Location
Liability Charges
Retro UI Review
wwwemptechcom | 18005183874 | infoemptechcom
General Evaluationbull Contact ALL UI jurisdictions
bull Perform account balancing (per state records) ndash QTR by QTR rearward review
bull Determine what credits found eligible for refund amp if debits found if correct
bull Research for any missing incomplete or untimely reporting on the account
bull Review all MampA past 3 years
bull Help reduce source of potential penalty or increased UI tax expense
Photo credit motone
UI Resources
wwwemptechcom | 18005183874 | infoemptechcom
bull 10 Questions for Internal SUTA Dumping Assessmentbull How Nonprofit Employers Can Reduce UI Costs bull FAQs on Employment Tax Compliance amp Savings in MampA
Go here to download three pages of UI Tips from Emptech
EmptechrsquosUI Tips
Download this one page checklist to assess the state of your UI Claims Administration
Is Your UCM
Broken
Get them here
Get our Top 15 Tips for MampA Tax Treatment
EmptechBlog
Go here to see the latest news on HR Payroll and Employment Tax topics
Thank You
wwwemptechcom | 18005183874 | infoemptechcom
Questions
Contact (203) 738-0545 rhendersonemptechcom
- Employment Tax Consulting- UI Claims Management- Credits- Talent Management- Electronic I-9- Verification of Employment
The Buckeye State (OH) UI Overview
wwwemptechcom | 18005183874 | infoemptechcom
bull Unemployment Rate (July 2015) 5
bull Trust Fund Loan Balance (Sept 2015) - $875M
bull lsquo15 Taxable Wage Base $9000
bull lsquo15 Tax Rates 3 min ndash 108 max o New ER UI Tax Rate 27
bull lsquo15 Potential FUTA Tax Rate 26o 15 Basic FCR + 11 BCR add ono $182 addtrsquol FUTA cost due to credit reduction and BCR rsquo15
bull Voluntary Contribution state
Key Federal UI Legislation
wwwemptechcom | 18005183874 | infoemptechcom
bull 2004 SUTA Dumping Act
bull 2011 TAAE UI Integrity Act (Sec 252)
bull 2012 ATRAbull EE SS tax rate return to normal
Audience Questions
wwwemptechcom | 18005183874 | infoemptechcom
bull Changes in ET Structure
bull MampA Activity
2004 SUTA Dumping Prevention Act
wwwemptechcom | 18005183874 | infoemptechcom
bull SUTA Dumping (aka ldquounemployment tax avoidancerdquo) occurs by shifting EEs to a less-taxed entity to avoid paying a higher UI tax rate
bull Migration of EEs between legal entities (MampA consolidation etc) may trigger time-sensitive mandatory compliance reporting ndash misunderstood amp often missed
bull Penalties for missing or incorrect reporting can include max UI ratings civil ampor criminal penaltiesbull SUTA Dumping Detection Software for enforcement
bull Read Employerrsquos MampA ldquoTo Dordquo List
2011 Federal Act ndash UI Integrity
wwwemptechcom | 18005183874 | infoemptechcom
bull Follow on to 2009 Executive Order to reduce improper UI payments
bull Under UI Integrity rules states must not relieve employers of charges when they fail to respond timely or adequately to UI claims related agency requests bull Pattern of Failure as little as two instances
bull Employers cannot collude with employee to misuse unemployment claim system
bull Each state has unique rules method of enforcement being formulated
ldquoPattern of Failurerdquo Financial Impact Example
wwwemptechcom | 18005183874 | infoemptechcom
Case Study
bull ER With 100 SeparationsYr ldquoPattern of Failurerdquo classification bull Benefit$ paid to claimant prior to successful Appeal by ER
FACTORS FIGURESWeekly benefit amount Assume $300
Time to appeal 8 weeks
of claims lost on initial determination amp won by ER on Appeal
10 (out of 100 total separations)
Charge to ER UI account $24000 ($2400 x 10 claims) now NON-RECOVERABLE due to ldquoPattern of Failurerdquo
Additional Exposure Negative Impact bull May raise AUDIT RISK for other UI areas
bull May elevate ER experience rating
ldquoPattern of Failurerdquo Example Letter
wwwemptechcom | 18005183874 | infoemptechcom
Compliance amp Enforcement UI Integrity
wwwemptechcom | 18005183874 | infoemptechcom
bull Unemployment Claims ldquoTriggerrdquondash Claims filings from an EE associated with a MampA event may
trigger an ldquoevaluationrdquo of the succession reporting due to confusion surrounded which ER responsible for benefit charge
bull ldquoSDDSrdquo (SUTA Dumping Detection Software) ndash Many States using SDDS to ldquocatchrdquo EE migrations ndash Flags accounts for review to see if UI succession reporting
completed
bull ldquoQETPrdquo (Questionable Employment Tax Practices)ndash Under QETP IRS and 37 states sharing information and
specifically focusing on ET for auditsndash As of mid-2012 QETP has resulted in audits of 11000
employers
Audit Alert Inter-Agency Info Sharing
wwwemptechcom | 18005183874 | infoemptechcom
bull Questionable Employment Tax Practices ldquoQETPrdquo Initiativebull 37 States amp IRSbull 12000+ business examined thru lsquo12
bull Fed amp state info sharing data mining amp cross-agency task forces
bull Significant focus on worker classification
bull Significant incentives to states to aggressively audit
UI Tax Optimization Focus
wwwemptechcom | 18005183874 | infoemptechcom
bull UI Cost Control
bull UI Retrospective Review
UI Benefit Charges Material Expense
wwwemptechcom | 18005183874 | infoemptechcom
UTax
UI Integrity Oversight Plan
wwwemptechcom | 18005183874 | infoemptechcom
UTax
Designate a Person or Team
Total UI Claims (also by
statelocation)Which claims failed to be
timely adequate
Why Who
Track winloss for protests For
losses why WhoTrack winloss for
appeals Why Who
Impact on experience
rating Calculate cost
to organization
Find amp fix areas of organizational
weakness
UI Integrity Oversight Plan
wwwemptechcom | 18005183874 | infoemptechcom
UTax
ldquoACTrdquoProvide information to UI
agencies that isAccurateComplete
Timely
Best Practices
UI Claims Admin Reporting
wwwemptechcom | 18005183874 | infoemptechcom
ldquoFloat like a butterfly sting like a bee You cannot hit what you cannot seerdquo
Muhammad AliPeriodicReports
Separations
Claims
Win LoseBy Location
Liability Charges
Retro UI Review
wwwemptechcom | 18005183874 | infoemptechcom
General Evaluationbull Contact ALL UI jurisdictions
bull Perform account balancing (per state records) ndash QTR by QTR rearward review
bull Determine what credits found eligible for refund amp if debits found if correct
bull Research for any missing incomplete or untimely reporting on the account
bull Review all MampA past 3 years
bull Help reduce source of potential penalty or increased UI tax expense
Photo credit motone
UI Resources
wwwemptechcom | 18005183874 | infoemptechcom
bull 10 Questions for Internal SUTA Dumping Assessmentbull How Nonprofit Employers Can Reduce UI Costs bull FAQs on Employment Tax Compliance amp Savings in MampA
Go here to download three pages of UI Tips from Emptech
EmptechrsquosUI Tips
Download this one page checklist to assess the state of your UI Claims Administration
Is Your UCM
Broken
Get them here
Get our Top 15 Tips for MampA Tax Treatment
EmptechBlog
Go here to see the latest news on HR Payroll and Employment Tax topics
Thank You
wwwemptechcom | 18005183874 | infoemptechcom
Questions
Contact (203) 738-0545 rhendersonemptechcom
- Employment Tax Consulting- UI Claims Management- Credits- Talent Management- Electronic I-9- Verification of Employment
Key Federal UI Legislation
wwwemptechcom | 18005183874 | infoemptechcom
bull 2004 SUTA Dumping Act
bull 2011 TAAE UI Integrity Act (Sec 252)
bull 2012 ATRAbull EE SS tax rate return to normal
Audience Questions
wwwemptechcom | 18005183874 | infoemptechcom
bull Changes in ET Structure
bull MampA Activity
2004 SUTA Dumping Prevention Act
wwwemptechcom | 18005183874 | infoemptechcom
bull SUTA Dumping (aka ldquounemployment tax avoidancerdquo) occurs by shifting EEs to a less-taxed entity to avoid paying a higher UI tax rate
bull Migration of EEs between legal entities (MampA consolidation etc) may trigger time-sensitive mandatory compliance reporting ndash misunderstood amp often missed
bull Penalties for missing or incorrect reporting can include max UI ratings civil ampor criminal penaltiesbull SUTA Dumping Detection Software for enforcement
bull Read Employerrsquos MampA ldquoTo Dordquo List
2011 Federal Act ndash UI Integrity
wwwemptechcom | 18005183874 | infoemptechcom
bull Follow on to 2009 Executive Order to reduce improper UI payments
bull Under UI Integrity rules states must not relieve employers of charges when they fail to respond timely or adequately to UI claims related agency requests bull Pattern of Failure as little as two instances
bull Employers cannot collude with employee to misuse unemployment claim system
bull Each state has unique rules method of enforcement being formulated
ldquoPattern of Failurerdquo Financial Impact Example
wwwemptechcom | 18005183874 | infoemptechcom
Case Study
bull ER With 100 SeparationsYr ldquoPattern of Failurerdquo classification bull Benefit$ paid to claimant prior to successful Appeal by ER
FACTORS FIGURESWeekly benefit amount Assume $300
Time to appeal 8 weeks
of claims lost on initial determination amp won by ER on Appeal
10 (out of 100 total separations)
Charge to ER UI account $24000 ($2400 x 10 claims) now NON-RECOVERABLE due to ldquoPattern of Failurerdquo
Additional Exposure Negative Impact bull May raise AUDIT RISK for other UI areas
bull May elevate ER experience rating
ldquoPattern of Failurerdquo Example Letter
wwwemptechcom | 18005183874 | infoemptechcom
Compliance amp Enforcement UI Integrity
wwwemptechcom | 18005183874 | infoemptechcom
bull Unemployment Claims ldquoTriggerrdquondash Claims filings from an EE associated with a MampA event may
trigger an ldquoevaluationrdquo of the succession reporting due to confusion surrounded which ER responsible for benefit charge
bull ldquoSDDSrdquo (SUTA Dumping Detection Software) ndash Many States using SDDS to ldquocatchrdquo EE migrations ndash Flags accounts for review to see if UI succession reporting
completed
bull ldquoQETPrdquo (Questionable Employment Tax Practices)ndash Under QETP IRS and 37 states sharing information and
specifically focusing on ET for auditsndash As of mid-2012 QETP has resulted in audits of 11000
employers
Audit Alert Inter-Agency Info Sharing
wwwemptechcom | 18005183874 | infoemptechcom
bull Questionable Employment Tax Practices ldquoQETPrdquo Initiativebull 37 States amp IRSbull 12000+ business examined thru lsquo12
bull Fed amp state info sharing data mining amp cross-agency task forces
bull Significant focus on worker classification
bull Significant incentives to states to aggressively audit
UI Tax Optimization Focus
wwwemptechcom | 18005183874 | infoemptechcom
bull UI Cost Control
bull UI Retrospective Review
UI Benefit Charges Material Expense
wwwemptechcom | 18005183874 | infoemptechcom
UTax
UI Integrity Oversight Plan
wwwemptechcom | 18005183874 | infoemptechcom
UTax
Designate a Person or Team
Total UI Claims (also by
statelocation)Which claims failed to be
timely adequate
Why Who
Track winloss for protests For
losses why WhoTrack winloss for
appeals Why Who
Impact on experience
rating Calculate cost
to organization
Find amp fix areas of organizational
weakness
UI Integrity Oversight Plan
wwwemptechcom | 18005183874 | infoemptechcom
UTax
ldquoACTrdquoProvide information to UI
agencies that isAccurateComplete
Timely
Best Practices
UI Claims Admin Reporting
wwwemptechcom | 18005183874 | infoemptechcom
ldquoFloat like a butterfly sting like a bee You cannot hit what you cannot seerdquo
Muhammad AliPeriodicReports
Separations
Claims
Win LoseBy Location
Liability Charges
Retro UI Review
wwwemptechcom | 18005183874 | infoemptechcom
General Evaluationbull Contact ALL UI jurisdictions
bull Perform account balancing (per state records) ndash QTR by QTR rearward review
bull Determine what credits found eligible for refund amp if debits found if correct
bull Research for any missing incomplete or untimely reporting on the account
bull Review all MampA past 3 years
bull Help reduce source of potential penalty or increased UI tax expense
Photo credit motone
UI Resources
wwwemptechcom | 18005183874 | infoemptechcom
bull 10 Questions for Internal SUTA Dumping Assessmentbull How Nonprofit Employers Can Reduce UI Costs bull FAQs on Employment Tax Compliance amp Savings in MampA
Go here to download three pages of UI Tips from Emptech
EmptechrsquosUI Tips
Download this one page checklist to assess the state of your UI Claims Administration
Is Your UCM
Broken
Get them here
Get our Top 15 Tips for MampA Tax Treatment
EmptechBlog
Go here to see the latest news on HR Payroll and Employment Tax topics
Thank You
wwwemptechcom | 18005183874 | infoemptechcom
Questions
Contact (203) 738-0545 rhendersonemptechcom
- Employment Tax Consulting- UI Claims Management- Credits- Talent Management- Electronic I-9- Verification of Employment
Audience Questions
wwwemptechcom | 18005183874 | infoemptechcom
bull Changes in ET Structure
bull MampA Activity
2004 SUTA Dumping Prevention Act
wwwemptechcom | 18005183874 | infoemptechcom
bull SUTA Dumping (aka ldquounemployment tax avoidancerdquo) occurs by shifting EEs to a less-taxed entity to avoid paying a higher UI tax rate
bull Migration of EEs between legal entities (MampA consolidation etc) may trigger time-sensitive mandatory compliance reporting ndash misunderstood amp often missed
bull Penalties for missing or incorrect reporting can include max UI ratings civil ampor criminal penaltiesbull SUTA Dumping Detection Software for enforcement
bull Read Employerrsquos MampA ldquoTo Dordquo List
2011 Federal Act ndash UI Integrity
wwwemptechcom | 18005183874 | infoemptechcom
bull Follow on to 2009 Executive Order to reduce improper UI payments
bull Under UI Integrity rules states must not relieve employers of charges when they fail to respond timely or adequately to UI claims related agency requests bull Pattern of Failure as little as two instances
bull Employers cannot collude with employee to misuse unemployment claim system
bull Each state has unique rules method of enforcement being formulated
ldquoPattern of Failurerdquo Financial Impact Example
wwwemptechcom | 18005183874 | infoemptechcom
Case Study
bull ER With 100 SeparationsYr ldquoPattern of Failurerdquo classification bull Benefit$ paid to claimant prior to successful Appeal by ER
FACTORS FIGURESWeekly benefit amount Assume $300
Time to appeal 8 weeks
of claims lost on initial determination amp won by ER on Appeal
10 (out of 100 total separations)
Charge to ER UI account $24000 ($2400 x 10 claims) now NON-RECOVERABLE due to ldquoPattern of Failurerdquo
Additional Exposure Negative Impact bull May raise AUDIT RISK for other UI areas
bull May elevate ER experience rating
ldquoPattern of Failurerdquo Example Letter
wwwemptechcom | 18005183874 | infoemptechcom
Compliance amp Enforcement UI Integrity
wwwemptechcom | 18005183874 | infoemptechcom
bull Unemployment Claims ldquoTriggerrdquondash Claims filings from an EE associated with a MampA event may
trigger an ldquoevaluationrdquo of the succession reporting due to confusion surrounded which ER responsible for benefit charge
bull ldquoSDDSrdquo (SUTA Dumping Detection Software) ndash Many States using SDDS to ldquocatchrdquo EE migrations ndash Flags accounts for review to see if UI succession reporting
completed
bull ldquoQETPrdquo (Questionable Employment Tax Practices)ndash Under QETP IRS and 37 states sharing information and
specifically focusing on ET for auditsndash As of mid-2012 QETP has resulted in audits of 11000
employers
Audit Alert Inter-Agency Info Sharing
wwwemptechcom | 18005183874 | infoemptechcom
bull Questionable Employment Tax Practices ldquoQETPrdquo Initiativebull 37 States amp IRSbull 12000+ business examined thru lsquo12
bull Fed amp state info sharing data mining amp cross-agency task forces
bull Significant focus on worker classification
bull Significant incentives to states to aggressively audit
UI Tax Optimization Focus
wwwemptechcom | 18005183874 | infoemptechcom
bull UI Cost Control
bull UI Retrospective Review
UI Benefit Charges Material Expense
wwwemptechcom | 18005183874 | infoemptechcom
UTax
UI Integrity Oversight Plan
wwwemptechcom | 18005183874 | infoemptechcom
UTax
Designate a Person or Team
Total UI Claims (also by
statelocation)Which claims failed to be
timely adequate
Why Who
Track winloss for protests For
losses why WhoTrack winloss for
appeals Why Who
Impact on experience
rating Calculate cost
to organization
Find amp fix areas of organizational
weakness
UI Integrity Oversight Plan
wwwemptechcom | 18005183874 | infoemptechcom
UTax
ldquoACTrdquoProvide information to UI
agencies that isAccurateComplete
Timely
Best Practices
UI Claims Admin Reporting
wwwemptechcom | 18005183874 | infoemptechcom
ldquoFloat like a butterfly sting like a bee You cannot hit what you cannot seerdquo
Muhammad AliPeriodicReports
Separations
Claims
Win LoseBy Location
Liability Charges
Retro UI Review
wwwemptechcom | 18005183874 | infoemptechcom
General Evaluationbull Contact ALL UI jurisdictions
bull Perform account balancing (per state records) ndash QTR by QTR rearward review
bull Determine what credits found eligible for refund amp if debits found if correct
bull Research for any missing incomplete or untimely reporting on the account
bull Review all MampA past 3 years
bull Help reduce source of potential penalty or increased UI tax expense
Photo credit motone
UI Resources
wwwemptechcom | 18005183874 | infoemptechcom
bull 10 Questions for Internal SUTA Dumping Assessmentbull How Nonprofit Employers Can Reduce UI Costs bull FAQs on Employment Tax Compliance amp Savings in MampA
Go here to download three pages of UI Tips from Emptech
EmptechrsquosUI Tips
Download this one page checklist to assess the state of your UI Claims Administration
Is Your UCM
Broken
Get them here
Get our Top 15 Tips for MampA Tax Treatment
EmptechBlog
Go here to see the latest news on HR Payroll and Employment Tax topics
Thank You
wwwemptechcom | 18005183874 | infoemptechcom
Questions
Contact (203) 738-0545 rhendersonemptechcom
- Employment Tax Consulting- UI Claims Management- Credits- Talent Management- Electronic I-9- Verification of Employment
2004 SUTA Dumping Prevention Act
wwwemptechcom | 18005183874 | infoemptechcom
bull SUTA Dumping (aka ldquounemployment tax avoidancerdquo) occurs by shifting EEs to a less-taxed entity to avoid paying a higher UI tax rate
bull Migration of EEs between legal entities (MampA consolidation etc) may trigger time-sensitive mandatory compliance reporting ndash misunderstood amp often missed
bull Penalties for missing or incorrect reporting can include max UI ratings civil ampor criminal penaltiesbull SUTA Dumping Detection Software for enforcement
bull Read Employerrsquos MampA ldquoTo Dordquo List
2011 Federal Act ndash UI Integrity
wwwemptechcom | 18005183874 | infoemptechcom
bull Follow on to 2009 Executive Order to reduce improper UI payments
bull Under UI Integrity rules states must not relieve employers of charges when they fail to respond timely or adequately to UI claims related agency requests bull Pattern of Failure as little as two instances
bull Employers cannot collude with employee to misuse unemployment claim system
bull Each state has unique rules method of enforcement being formulated
ldquoPattern of Failurerdquo Financial Impact Example
wwwemptechcom | 18005183874 | infoemptechcom
Case Study
bull ER With 100 SeparationsYr ldquoPattern of Failurerdquo classification bull Benefit$ paid to claimant prior to successful Appeal by ER
FACTORS FIGURESWeekly benefit amount Assume $300
Time to appeal 8 weeks
of claims lost on initial determination amp won by ER on Appeal
10 (out of 100 total separations)
Charge to ER UI account $24000 ($2400 x 10 claims) now NON-RECOVERABLE due to ldquoPattern of Failurerdquo
Additional Exposure Negative Impact bull May raise AUDIT RISK for other UI areas
bull May elevate ER experience rating
ldquoPattern of Failurerdquo Example Letter
wwwemptechcom | 18005183874 | infoemptechcom
Compliance amp Enforcement UI Integrity
wwwemptechcom | 18005183874 | infoemptechcom
bull Unemployment Claims ldquoTriggerrdquondash Claims filings from an EE associated with a MampA event may
trigger an ldquoevaluationrdquo of the succession reporting due to confusion surrounded which ER responsible for benefit charge
bull ldquoSDDSrdquo (SUTA Dumping Detection Software) ndash Many States using SDDS to ldquocatchrdquo EE migrations ndash Flags accounts for review to see if UI succession reporting
completed
bull ldquoQETPrdquo (Questionable Employment Tax Practices)ndash Under QETP IRS and 37 states sharing information and
specifically focusing on ET for auditsndash As of mid-2012 QETP has resulted in audits of 11000
employers
Audit Alert Inter-Agency Info Sharing
wwwemptechcom | 18005183874 | infoemptechcom
bull Questionable Employment Tax Practices ldquoQETPrdquo Initiativebull 37 States amp IRSbull 12000+ business examined thru lsquo12
bull Fed amp state info sharing data mining amp cross-agency task forces
bull Significant focus on worker classification
bull Significant incentives to states to aggressively audit
UI Tax Optimization Focus
wwwemptechcom | 18005183874 | infoemptechcom
bull UI Cost Control
bull UI Retrospective Review
UI Benefit Charges Material Expense
wwwemptechcom | 18005183874 | infoemptechcom
UTax
UI Integrity Oversight Plan
wwwemptechcom | 18005183874 | infoemptechcom
UTax
Designate a Person or Team
Total UI Claims (also by
statelocation)Which claims failed to be
timely adequate
Why Who
Track winloss for protests For
losses why WhoTrack winloss for
appeals Why Who
Impact on experience
rating Calculate cost
to organization
Find amp fix areas of organizational
weakness
UI Integrity Oversight Plan
wwwemptechcom | 18005183874 | infoemptechcom
UTax
ldquoACTrdquoProvide information to UI
agencies that isAccurateComplete
Timely
Best Practices
UI Claims Admin Reporting
wwwemptechcom | 18005183874 | infoemptechcom
ldquoFloat like a butterfly sting like a bee You cannot hit what you cannot seerdquo
Muhammad AliPeriodicReports
Separations
Claims
Win LoseBy Location
Liability Charges
Retro UI Review
wwwemptechcom | 18005183874 | infoemptechcom
General Evaluationbull Contact ALL UI jurisdictions
bull Perform account balancing (per state records) ndash QTR by QTR rearward review
bull Determine what credits found eligible for refund amp if debits found if correct
bull Research for any missing incomplete or untimely reporting on the account
bull Review all MampA past 3 years
bull Help reduce source of potential penalty or increased UI tax expense
Photo credit motone
UI Resources
wwwemptechcom | 18005183874 | infoemptechcom
bull 10 Questions for Internal SUTA Dumping Assessmentbull How Nonprofit Employers Can Reduce UI Costs bull FAQs on Employment Tax Compliance amp Savings in MampA
Go here to download three pages of UI Tips from Emptech
EmptechrsquosUI Tips
Download this one page checklist to assess the state of your UI Claims Administration
Is Your UCM
Broken
Get them here
Get our Top 15 Tips for MampA Tax Treatment
EmptechBlog
Go here to see the latest news on HR Payroll and Employment Tax topics
Thank You
wwwemptechcom | 18005183874 | infoemptechcom
Questions
Contact (203) 738-0545 rhendersonemptechcom
- Employment Tax Consulting- UI Claims Management- Credits- Talent Management- Electronic I-9- Verification of Employment
2011 Federal Act ndash UI Integrity
wwwemptechcom | 18005183874 | infoemptechcom
bull Follow on to 2009 Executive Order to reduce improper UI payments
bull Under UI Integrity rules states must not relieve employers of charges when they fail to respond timely or adequately to UI claims related agency requests bull Pattern of Failure as little as two instances
bull Employers cannot collude with employee to misuse unemployment claim system
bull Each state has unique rules method of enforcement being formulated
ldquoPattern of Failurerdquo Financial Impact Example
wwwemptechcom | 18005183874 | infoemptechcom
Case Study
bull ER With 100 SeparationsYr ldquoPattern of Failurerdquo classification bull Benefit$ paid to claimant prior to successful Appeal by ER
FACTORS FIGURESWeekly benefit amount Assume $300
Time to appeal 8 weeks
of claims lost on initial determination amp won by ER on Appeal
10 (out of 100 total separations)
Charge to ER UI account $24000 ($2400 x 10 claims) now NON-RECOVERABLE due to ldquoPattern of Failurerdquo
Additional Exposure Negative Impact bull May raise AUDIT RISK for other UI areas
bull May elevate ER experience rating
ldquoPattern of Failurerdquo Example Letter
wwwemptechcom | 18005183874 | infoemptechcom
Compliance amp Enforcement UI Integrity
wwwemptechcom | 18005183874 | infoemptechcom
bull Unemployment Claims ldquoTriggerrdquondash Claims filings from an EE associated with a MampA event may
trigger an ldquoevaluationrdquo of the succession reporting due to confusion surrounded which ER responsible for benefit charge
bull ldquoSDDSrdquo (SUTA Dumping Detection Software) ndash Many States using SDDS to ldquocatchrdquo EE migrations ndash Flags accounts for review to see if UI succession reporting
completed
bull ldquoQETPrdquo (Questionable Employment Tax Practices)ndash Under QETP IRS and 37 states sharing information and
specifically focusing on ET for auditsndash As of mid-2012 QETP has resulted in audits of 11000
employers
Audit Alert Inter-Agency Info Sharing
wwwemptechcom | 18005183874 | infoemptechcom
bull Questionable Employment Tax Practices ldquoQETPrdquo Initiativebull 37 States amp IRSbull 12000+ business examined thru lsquo12
bull Fed amp state info sharing data mining amp cross-agency task forces
bull Significant focus on worker classification
bull Significant incentives to states to aggressively audit
UI Tax Optimization Focus
wwwemptechcom | 18005183874 | infoemptechcom
bull UI Cost Control
bull UI Retrospective Review
UI Benefit Charges Material Expense
wwwemptechcom | 18005183874 | infoemptechcom
UTax
UI Integrity Oversight Plan
wwwemptechcom | 18005183874 | infoemptechcom
UTax
Designate a Person or Team
Total UI Claims (also by
statelocation)Which claims failed to be
timely adequate
Why Who
Track winloss for protests For
losses why WhoTrack winloss for
appeals Why Who
Impact on experience
rating Calculate cost
to organization
Find amp fix areas of organizational
weakness
UI Integrity Oversight Plan
wwwemptechcom | 18005183874 | infoemptechcom
UTax
ldquoACTrdquoProvide information to UI
agencies that isAccurateComplete
Timely
Best Practices
UI Claims Admin Reporting
wwwemptechcom | 18005183874 | infoemptechcom
ldquoFloat like a butterfly sting like a bee You cannot hit what you cannot seerdquo
Muhammad AliPeriodicReports
Separations
Claims
Win LoseBy Location
Liability Charges
Retro UI Review
wwwemptechcom | 18005183874 | infoemptechcom
General Evaluationbull Contact ALL UI jurisdictions
bull Perform account balancing (per state records) ndash QTR by QTR rearward review
bull Determine what credits found eligible for refund amp if debits found if correct
bull Research for any missing incomplete or untimely reporting on the account
bull Review all MampA past 3 years
bull Help reduce source of potential penalty or increased UI tax expense
Photo credit motone
UI Resources
wwwemptechcom | 18005183874 | infoemptechcom
bull 10 Questions for Internal SUTA Dumping Assessmentbull How Nonprofit Employers Can Reduce UI Costs bull FAQs on Employment Tax Compliance amp Savings in MampA
Go here to download three pages of UI Tips from Emptech
EmptechrsquosUI Tips
Download this one page checklist to assess the state of your UI Claims Administration
Is Your UCM
Broken
Get them here
Get our Top 15 Tips for MampA Tax Treatment
EmptechBlog
Go here to see the latest news on HR Payroll and Employment Tax topics
Thank You
wwwemptechcom | 18005183874 | infoemptechcom
Questions
Contact (203) 738-0545 rhendersonemptechcom
- Employment Tax Consulting- UI Claims Management- Credits- Talent Management- Electronic I-9- Verification of Employment
ldquoPattern of Failurerdquo Financial Impact Example
wwwemptechcom | 18005183874 | infoemptechcom
Case Study
bull ER With 100 SeparationsYr ldquoPattern of Failurerdquo classification bull Benefit$ paid to claimant prior to successful Appeal by ER
FACTORS FIGURESWeekly benefit amount Assume $300
Time to appeal 8 weeks
of claims lost on initial determination amp won by ER on Appeal
10 (out of 100 total separations)
Charge to ER UI account $24000 ($2400 x 10 claims) now NON-RECOVERABLE due to ldquoPattern of Failurerdquo
Additional Exposure Negative Impact bull May raise AUDIT RISK for other UI areas
bull May elevate ER experience rating
ldquoPattern of Failurerdquo Example Letter
wwwemptechcom | 18005183874 | infoemptechcom
Compliance amp Enforcement UI Integrity
wwwemptechcom | 18005183874 | infoemptechcom
bull Unemployment Claims ldquoTriggerrdquondash Claims filings from an EE associated with a MampA event may
trigger an ldquoevaluationrdquo of the succession reporting due to confusion surrounded which ER responsible for benefit charge
bull ldquoSDDSrdquo (SUTA Dumping Detection Software) ndash Many States using SDDS to ldquocatchrdquo EE migrations ndash Flags accounts for review to see if UI succession reporting
completed
bull ldquoQETPrdquo (Questionable Employment Tax Practices)ndash Under QETP IRS and 37 states sharing information and
specifically focusing on ET for auditsndash As of mid-2012 QETP has resulted in audits of 11000
employers
Audit Alert Inter-Agency Info Sharing
wwwemptechcom | 18005183874 | infoemptechcom
bull Questionable Employment Tax Practices ldquoQETPrdquo Initiativebull 37 States amp IRSbull 12000+ business examined thru lsquo12
bull Fed amp state info sharing data mining amp cross-agency task forces
bull Significant focus on worker classification
bull Significant incentives to states to aggressively audit
UI Tax Optimization Focus
wwwemptechcom | 18005183874 | infoemptechcom
bull UI Cost Control
bull UI Retrospective Review
UI Benefit Charges Material Expense
wwwemptechcom | 18005183874 | infoemptechcom
UTax
UI Integrity Oversight Plan
wwwemptechcom | 18005183874 | infoemptechcom
UTax
Designate a Person or Team
Total UI Claims (also by
statelocation)Which claims failed to be
timely adequate
Why Who
Track winloss for protests For
losses why WhoTrack winloss for
appeals Why Who
Impact on experience
rating Calculate cost
to organization
Find amp fix areas of organizational
weakness
UI Integrity Oversight Plan
wwwemptechcom | 18005183874 | infoemptechcom
UTax
ldquoACTrdquoProvide information to UI
agencies that isAccurateComplete
Timely
Best Practices
UI Claims Admin Reporting
wwwemptechcom | 18005183874 | infoemptechcom
ldquoFloat like a butterfly sting like a bee You cannot hit what you cannot seerdquo
Muhammad AliPeriodicReports
Separations
Claims
Win LoseBy Location
Liability Charges
Retro UI Review
wwwemptechcom | 18005183874 | infoemptechcom
General Evaluationbull Contact ALL UI jurisdictions
bull Perform account balancing (per state records) ndash QTR by QTR rearward review
bull Determine what credits found eligible for refund amp if debits found if correct
bull Research for any missing incomplete or untimely reporting on the account
bull Review all MampA past 3 years
bull Help reduce source of potential penalty or increased UI tax expense
Photo credit motone
UI Resources
wwwemptechcom | 18005183874 | infoemptechcom
bull 10 Questions for Internal SUTA Dumping Assessmentbull How Nonprofit Employers Can Reduce UI Costs bull FAQs on Employment Tax Compliance amp Savings in MampA
Go here to download three pages of UI Tips from Emptech
EmptechrsquosUI Tips
Download this one page checklist to assess the state of your UI Claims Administration
Is Your UCM
Broken
Get them here
Get our Top 15 Tips for MampA Tax Treatment
EmptechBlog
Go here to see the latest news on HR Payroll and Employment Tax topics
Thank You
wwwemptechcom | 18005183874 | infoemptechcom
Questions
Contact (203) 738-0545 rhendersonemptechcom
- Employment Tax Consulting- UI Claims Management- Credits- Talent Management- Electronic I-9- Verification of Employment
ldquoPattern of Failurerdquo Example Letter
wwwemptechcom | 18005183874 | infoemptechcom
Compliance amp Enforcement UI Integrity
wwwemptechcom | 18005183874 | infoemptechcom
bull Unemployment Claims ldquoTriggerrdquondash Claims filings from an EE associated with a MampA event may
trigger an ldquoevaluationrdquo of the succession reporting due to confusion surrounded which ER responsible for benefit charge
bull ldquoSDDSrdquo (SUTA Dumping Detection Software) ndash Many States using SDDS to ldquocatchrdquo EE migrations ndash Flags accounts for review to see if UI succession reporting
completed
bull ldquoQETPrdquo (Questionable Employment Tax Practices)ndash Under QETP IRS and 37 states sharing information and
specifically focusing on ET for auditsndash As of mid-2012 QETP has resulted in audits of 11000
employers
Audit Alert Inter-Agency Info Sharing
wwwemptechcom | 18005183874 | infoemptechcom
bull Questionable Employment Tax Practices ldquoQETPrdquo Initiativebull 37 States amp IRSbull 12000+ business examined thru lsquo12
bull Fed amp state info sharing data mining amp cross-agency task forces
bull Significant focus on worker classification
bull Significant incentives to states to aggressively audit
UI Tax Optimization Focus
wwwemptechcom | 18005183874 | infoemptechcom
bull UI Cost Control
bull UI Retrospective Review
UI Benefit Charges Material Expense
wwwemptechcom | 18005183874 | infoemptechcom
UTax
UI Integrity Oversight Plan
wwwemptechcom | 18005183874 | infoemptechcom
UTax
Designate a Person or Team
Total UI Claims (also by
statelocation)Which claims failed to be
timely adequate
Why Who
Track winloss for protests For
losses why WhoTrack winloss for
appeals Why Who
Impact on experience
rating Calculate cost
to organization
Find amp fix areas of organizational
weakness
UI Integrity Oversight Plan
wwwemptechcom | 18005183874 | infoemptechcom
UTax
ldquoACTrdquoProvide information to UI
agencies that isAccurateComplete
Timely
Best Practices
UI Claims Admin Reporting
wwwemptechcom | 18005183874 | infoemptechcom
ldquoFloat like a butterfly sting like a bee You cannot hit what you cannot seerdquo
Muhammad AliPeriodicReports
Separations
Claims
Win LoseBy Location
Liability Charges
Retro UI Review
wwwemptechcom | 18005183874 | infoemptechcom
General Evaluationbull Contact ALL UI jurisdictions
bull Perform account balancing (per state records) ndash QTR by QTR rearward review
bull Determine what credits found eligible for refund amp if debits found if correct
bull Research for any missing incomplete or untimely reporting on the account
bull Review all MampA past 3 years
bull Help reduce source of potential penalty or increased UI tax expense
Photo credit motone
UI Resources
wwwemptechcom | 18005183874 | infoemptechcom
bull 10 Questions for Internal SUTA Dumping Assessmentbull How Nonprofit Employers Can Reduce UI Costs bull FAQs on Employment Tax Compliance amp Savings in MampA
Go here to download three pages of UI Tips from Emptech
EmptechrsquosUI Tips
Download this one page checklist to assess the state of your UI Claims Administration
Is Your UCM
Broken
Get them here
Get our Top 15 Tips for MampA Tax Treatment
EmptechBlog
Go here to see the latest news on HR Payroll and Employment Tax topics
Thank You
wwwemptechcom | 18005183874 | infoemptechcom
Questions
Contact (203) 738-0545 rhendersonemptechcom
- Employment Tax Consulting- UI Claims Management- Credits- Talent Management- Electronic I-9- Verification of Employment
Compliance amp Enforcement UI Integrity
wwwemptechcom | 18005183874 | infoemptechcom
bull Unemployment Claims ldquoTriggerrdquondash Claims filings from an EE associated with a MampA event may
trigger an ldquoevaluationrdquo of the succession reporting due to confusion surrounded which ER responsible for benefit charge
bull ldquoSDDSrdquo (SUTA Dumping Detection Software) ndash Many States using SDDS to ldquocatchrdquo EE migrations ndash Flags accounts for review to see if UI succession reporting
completed
bull ldquoQETPrdquo (Questionable Employment Tax Practices)ndash Under QETP IRS and 37 states sharing information and
specifically focusing on ET for auditsndash As of mid-2012 QETP has resulted in audits of 11000
employers
Audit Alert Inter-Agency Info Sharing
wwwemptechcom | 18005183874 | infoemptechcom
bull Questionable Employment Tax Practices ldquoQETPrdquo Initiativebull 37 States amp IRSbull 12000+ business examined thru lsquo12
bull Fed amp state info sharing data mining amp cross-agency task forces
bull Significant focus on worker classification
bull Significant incentives to states to aggressively audit
UI Tax Optimization Focus
wwwemptechcom | 18005183874 | infoemptechcom
bull UI Cost Control
bull UI Retrospective Review
UI Benefit Charges Material Expense
wwwemptechcom | 18005183874 | infoemptechcom
UTax
UI Integrity Oversight Plan
wwwemptechcom | 18005183874 | infoemptechcom
UTax
Designate a Person or Team
Total UI Claims (also by
statelocation)Which claims failed to be
timely adequate
Why Who
Track winloss for protests For
losses why WhoTrack winloss for
appeals Why Who
Impact on experience
rating Calculate cost
to organization
Find amp fix areas of organizational
weakness
UI Integrity Oversight Plan
wwwemptechcom | 18005183874 | infoemptechcom
UTax
ldquoACTrdquoProvide information to UI
agencies that isAccurateComplete
Timely
Best Practices
UI Claims Admin Reporting
wwwemptechcom | 18005183874 | infoemptechcom
ldquoFloat like a butterfly sting like a bee You cannot hit what you cannot seerdquo
Muhammad AliPeriodicReports
Separations
Claims
Win LoseBy Location
Liability Charges
Retro UI Review
wwwemptechcom | 18005183874 | infoemptechcom
General Evaluationbull Contact ALL UI jurisdictions
bull Perform account balancing (per state records) ndash QTR by QTR rearward review
bull Determine what credits found eligible for refund amp if debits found if correct
bull Research for any missing incomplete or untimely reporting on the account
bull Review all MampA past 3 years
bull Help reduce source of potential penalty or increased UI tax expense
Photo credit motone
UI Resources
wwwemptechcom | 18005183874 | infoemptechcom
bull 10 Questions for Internal SUTA Dumping Assessmentbull How Nonprofit Employers Can Reduce UI Costs bull FAQs on Employment Tax Compliance amp Savings in MampA
Go here to download three pages of UI Tips from Emptech
EmptechrsquosUI Tips
Download this one page checklist to assess the state of your UI Claims Administration
Is Your UCM
Broken
Get them here
Get our Top 15 Tips for MampA Tax Treatment
EmptechBlog
Go here to see the latest news on HR Payroll and Employment Tax topics
Thank You
wwwemptechcom | 18005183874 | infoemptechcom
Questions
Contact (203) 738-0545 rhendersonemptechcom
- Employment Tax Consulting- UI Claims Management- Credits- Talent Management- Electronic I-9- Verification of Employment
Audit Alert Inter-Agency Info Sharing
wwwemptechcom | 18005183874 | infoemptechcom
bull Questionable Employment Tax Practices ldquoQETPrdquo Initiativebull 37 States amp IRSbull 12000+ business examined thru lsquo12
bull Fed amp state info sharing data mining amp cross-agency task forces
bull Significant focus on worker classification
bull Significant incentives to states to aggressively audit
UI Tax Optimization Focus
wwwemptechcom | 18005183874 | infoemptechcom
bull UI Cost Control
bull UI Retrospective Review
UI Benefit Charges Material Expense
wwwemptechcom | 18005183874 | infoemptechcom
UTax
UI Integrity Oversight Plan
wwwemptechcom | 18005183874 | infoemptechcom
UTax
Designate a Person or Team
Total UI Claims (also by
statelocation)Which claims failed to be
timely adequate
Why Who
Track winloss for protests For
losses why WhoTrack winloss for
appeals Why Who
Impact on experience
rating Calculate cost
to organization
Find amp fix areas of organizational
weakness
UI Integrity Oversight Plan
wwwemptechcom | 18005183874 | infoemptechcom
UTax
ldquoACTrdquoProvide information to UI
agencies that isAccurateComplete
Timely
Best Practices
UI Claims Admin Reporting
wwwemptechcom | 18005183874 | infoemptechcom
ldquoFloat like a butterfly sting like a bee You cannot hit what you cannot seerdquo
Muhammad AliPeriodicReports
Separations
Claims
Win LoseBy Location
Liability Charges
Retro UI Review
wwwemptechcom | 18005183874 | infoemptechcom
General Evaluationbull Contact ALL UI jurisdictions
bull Perform account balancing (per state records) ndash QTR by QTR rearward review
bull Determine what credits found eligible for refund amp if debits found if correct
bull Research for any missing incomplete or untimely reporting on the account
bull Review all MampA past 3 years
bull Help reduce source of potential penalty or increased UI tax expense
Photo credit motone
UI Resources
wwwemptechcom | 18005183874 | infoemptechcom
bull 10 Questions for Internal SUTA Dumping Assessmentbull How Nonprofit Employers Can Reduce UI Costs bull FAQs on Employment Tax Compliance amp Savings in MampA
Go here to download three pages of UI Tips from Emptech
EmptechrsquosUI Tips
Download this one page checklist to assess the state of your UI Claims Administration
Is Your UCM
Broken
Get them here
Get our Top 15 Tips for MampA Tax Treatment
EmptechBlog
Go here to see the latest news on HR Payroll and Employment Tax topics
Thank You
wwwemptechcom | 18005183874 | infoemptechcom
Questions
Contact (203) 738-0545 rhendersonemptechcom
- Employment Tax Consulting- UI Claims Management- Credits- Talent Management- Electronic I-9- Verification of Employment
UI Tax Optimization Focus
wwwemptechcom | 18005183874 | infoemptechcom
bull UI Cost Control
bull UI Retrospective Review
UI Benefit Charges Material Expense
wwwemptechcom | 18005183874 | infoemptechcom
UTax
UI Integrity Oversight Plan
wwwemptechcom | 18005183874 | infoemptechcom
UTax
Designate a Person or Team
Total UI Claims (also by
statelocation)Which claims failed to be
timely adequate
Why Who
Track winloss for protests For
losses why WhoTrack winloss for
appeals Why Who
Impact on experience
rating Calculate cost
to organization
Find amp fix areas of organizational
weakness
UI Integrity Oversight Plan
wwwemptechcom | 18005183874 | infoemptechcom
UTax
ldquoACTrdquoProvide information to UI
agencies that isAccurateComplete
Timely
Best Practices
UI Claims Admin Reporting
wwwemptechcom | 18005183874 | infoemptechcom
ldquoFloat like a butterfly sting like a bee You cannot hit what you cannot seerdquo
Muhammad AliPeriodicReports
Separations
Claims
Win LoseBy Location
Liability Charges
Retro UI Review
wwwemptechcom | 18005183874 | infoemptechcom
General Evaluationbull Contact ALL UI jurisdictions
bull Perform account balancing (per state records) ndash QTR by QTR rearward review
bull Determine what credits found eligible for refund amp if debits found if correct
bull Research for any missing incomplete or untimely reporting on the account
bull Review all MampA past 3 years
bull Help reduce source of potential penalty or increased UI tax expense
Photo credit motone
UI Resources
wwwemptechcom | 18005183874 | infoemptechcom
bull 10 Questions for Internal SUTA Dumping Assessmentbull How Nonprofit Employers Can Reduce UI Costs bull FAQs on Employment Tax Compliance amp Savings in MampA
Go here to download three pages of UI Tips from Emptech
EmptechrsquosUI Tips
Download this one page checklist to assess the state of your UI Claims Administration
Is Your UCM
Broken
Get them here
Get our Top 15 Tips for MampA Tax Treatment
EmptechBlog
Go here to see the latest news on HR Payroll and Employment Tax topics
Thank You
wwwemptechcom | 18005183874 | infoemptechcom
Questions
Contact (203) 738-0545 rhendersonemptechcom
- Employment Tax Consulting- UI Claims Management- Credits- Talent Management- Electronic I-9- Verification of Employment
UI Benefit Charges Material Expense
wwwemptechcom | 18005183874 | infoemptechcom
UTax
UI Integrity Oversight Plan
wwwemptechcom | 18005183874 | infoemptechcom
UTax
Designate a Person or Team
Total UI Claims (also by
statelocation)Which claims failed to be
timely adequate
Why Who
Track winloss for protests For
losses why WhoTrack winloss for
appeals Why Who
Impact on experience
rating Calculate cost
to organization
Find amp fix areas of organizational
weakness
UI Integrity Oversight Plan
wwwemptechcom | 18005183874 | infoemptechcom
UTax
ldquoACTrdquoProvide information to UI
agencies that isAccurateComplete
Timely
Best Practices
UI Claims Admin Reporting
wwwemptechcom | 18005183874 | infoemptechcom
ldquoFloat like a butterfly sting like a bee You cannot hit what you cannot seerdquo
Muhammad AliPeriodicReports
Separations
Claims
Win LoseBy Location
Liability Charges
Retro UI Review
wwwemptechcom | 18005183874 | infoemptechcom
General Evaluationbull Contact ALL UI jurisdictions
bull Perform account balancing (per state records) ndash QTR by QTR rearward review
bull Determine what credits found eligible for refund amp if debits found if correct
bull Research for any missing incomplete or untimely reporting on the account
bull Review all MampA past 3 years
bull Help reduce source of potential penalty or increased UI tax expense
Photo credit motone
UI Resources
wwwemptechcom | 18005183874 | infoemptechcom
bull 10 Questions for Internal SUTA Dumping Assessmentbull How Nonprofit Employers Can Reduce UI Costs bull FAQs on Employment Tax Compliance amp Savings in MampA
Go here to download three pages of UI Tips from Emptech
EmptechrsquosUI Tips
Download this one page checklist to assess the state of your UI Claims Administration
Is Your UCM
Broken
Get them here
Get our Top 15 Tips for MampA Tax Treatment
EmptechBlog
Go here to see the latest news on HR Payroll and Employment Tax topics
Thank You
wwwemptechcom | 18005183874 | infoemptechcom
Questions
Contact (203) 738-0545 rhendersonemptechcom
- Employment Tax Consulting- UI Claims Management- Credits- Talent Management- Electronic I-9- Verification of Employment
UI Integrity Oversight Plan
wwwemptechcom | 18005183874 | infoemptechcom
UTax
Designate a Person or Team
Total UI Claims (also by
statelocation)Which claims failed to be
timely adequate
Why Who
Track winloss for protests For
losses why WhoTrack winloss for
appeals Why Who
Impact on experience
rating Calculate cost
to organization
Find amp fix areas of organizational
weakness
UI Integrity Oversight Plan
wwwemptechcom | 18005183874 | infoemptechcom
UTax
ldquoACTrdquoProvide information to UI
agencies that isAccurateComplete
Timely
Best Practices
UI Claims Admin Reporting
wwwemptechcom | 18005183874 | infoemptechcom
ldquoFloat like a butterfly sting like a bee You cannot hit what you cannot seerdquo
Muhammad AliPeriodicReports
Separations
Claims
Win LoseBy Location
Liability Charges
Retro UI Review
wwwemptechcom | 18005183874 | infoemptechcom
General Evaluationbull Contact ALL UI jurisdictions
bull Perform account balancing (per state records) ndash QTR by QTR rearward review
bull Determine what credits found eligible for refund amp if debits found if correct
bull Research for any missing incomplete or untimely reporting on the account
bull Review all MampA past 3 years
bull Help reduce source of potential penalty or increased UI tax expense
Photo credit motone
UI Resources
wwwemptechcom | 18005183874 | infoemptechcom
bull 10 Questions for Internal SUTA Dumping Assessmentbull How Nonprofit Employers Can Reduce UI Costs bull FAQs on Employment Tax Compliance amp Savings in MampA
Go here to download three pages of UI Tips from Emptech
EmptechrsquosUI Tips
Download this one page checklist to assess the state of your UI Claims Administration
Is Your UCM
Broken
Get them here
Get our Top 15 Tips for MampA Tax Treatment
EmptechBlog
Go here to see the latest news on HR Payroll and Employment Tax topics
Thank You
wwwemptechcom | 18005183874 | infoemptechcom
Questions
Contact (203) 738-0545 rhendersonemptechcom
- Employment Tax Consulting- UI Claims Management- Credits- Talent Management- Electronic I-9- Verification of Employment
UI Integrity Oversight Plan
wwwemptechcom | 18005183874 | infoemptechcom
UTax
ldquoACTrdquoProvide information to UI
agencies that isAccurateComplete
Timely
Best Practices
UI Claims Admin Reporting
wwwemptechcom | 18005183874 | infoemptechcom
ldquoFloat like a butterfly sting like a bee You cannot hit what you cannot seerdquo
Muhammad AliPeriodicReports
Separations
Claims
Win LoseBy Location
Liability Charges
Retro UI Review
wwwemptechcom | 18005183874 | infoemptechcom
General Evaluationbull Contact ALL UI jurisdictions
bull Perform account balancing (per state records) ndash QTR by QTR rearward review
bull Determine what credits found eligible for refund amp if debits found if correct
bull Research for any missing incomplete or untimely reporting on the account
bull Review all MampA past 3 years
bull Help reduce source of potential penalty or increased UI tax expense
Photo credit motone
UI Resources
wwwemptechcom | 18005183874 | infoemptechcom
bull 10 Questions for Internal SUTA Dumping Assessmentbull How Nonprofit Employers Can Reduce UI Costs bull FAQs on Employment Tax Compliance amp Savings in MampA
Go here to download three pages of UI Tips from Emptech
EmptechrsquosUI Tips
Download this one page checklist to assess the state of your UI Claims Administration
Is Your UCM
Broken
Get them here
Get our Top 15 Tips for MampA Tax Treatment
EmptechBlog
Go here to see the latest news on HR Payroll and Employment Tax topics
Thank You
wwwemptechcom | 18005183874 | infoemptechcom
Questions
Contact (203) 738-0545 rhendersonemptechcom
- Employment Tax Consulting- UI Claims Management- Credits- Talent Management- Electronic I-9- Verification of Employment
UI Claims Admin Reporting
wwwemptechcom | 18005183874 | infoemptechcom
ldquoFloat like a butterfly sting like a bee You cannot hit what you cannot seerdquo
Muhammad AliPeriodicReports
Separations
Claims
Win LoseBy Location
Liability Charges
Retro UI Review
wwwemptechcom | 18005183874 | infoemptechcom
General Evaluationbull Contact ALL UI jurisdictions
bull Perform account balancing (per state records) ndash QTR by QTR rearward review
bull Determine what credits found eligible for refund amp if debits found if correct
bull Research for any missing incomplete or untimely reporting on the account
bull Review all MampA past 3 years
bull Help reduce source of potential penalty or increased UI tax expense
Photo credit motone
UI Resources
wwwemptechcom | 18005183874 | infoemptechcom
bull 10 Questions for Internal SUTA Dumping Assessmentbull How Nonprofit Employers Can Reduce UI Costs bull FAQs on Employment Tax Compliance amp Savings in MampA
Go here to download three pages of UI Tips from Emptech
EmptechrsquosUI Tips
Download this one page checklist to assess the state of your UI Claims Administration
Is Your UCM
Broken
Get them here
Get our Top 15 Tips for MampA Tax Treatment
EmptechBlog
Go here to see the latest news on HR Payroll and Employment Tax topics
Thank You
wwwemptechcom | 18005183874 | infoemptechcom
Questions
Contact (203) 738-0545 rhendersonemptechcom
- Employment Tax Consulting- UI Claims Management- Credits- Talent Management- Electronic I-9- Verification of Employment
Retro UI Review
wwwemptechcom | 18005183874 | infoemptechcom
General Evaluationbull Contact ALL UI jurisdictions
bull Perform account balancing (per state records) ndash QTR by QTR rearward review
bull Determine what credits found eligible for refund amp if debits found if correct
bull Research for any missing incomplete or untimely reporting on the account
bull Review all MampA past 3 years
bull Help reduce source of potential penalty or increased UI tax expense
Photo credit motone
UI Resources
wwwemptechcom | 18005183874 | infoemptechcom
bull 10 Questions for Internal SUTA Dumping Assessmentbull How Nonprofit Employers Can Reduce UI Costs bull FAQs on Employment Tax Compliance amp Savings in MampA
Go here to download three pages of UI Tips from Emptech
EmptechrsquosUI Tips
Download this one page checklist to assess the state of your UI Claims Administration
Is Your UCM
Broken
Get them here
Get our Top 15 Tips for MampA Tax Treatment
EmptechBlog
Go here to see the latest news on HR Payroll and Employment Tax topics
Thank You
wwwemptechcom | 18005183874 | infoemptechcom
Questions
Contact (203) 738-0545 rhendersonemptechcom
- Employment Tax Consulting- UI Claims Management- Credits- Talent Management- Electronic I-9- Verification of Employment
UI Resources
wwwemptechcom | 18005183874 | infoemptechcom
bull 10 Questions for Internal SUTA Dumping Assessmentbull How Nonprofit Employers Can Reduce UI Costs bull FAQs on Employment Tax Compliance amp Savings in MampA
Go here to download three pages of UI Tips from Emptech
EmptechrsquosUI Tips
Download this one page checklist to assess the state of your UI Claims Administration
Is Your UCM
Broken
Get them here
Get our Top 15 Tips for MampA Tax Treatment
EmptechBlog
Go here to see the latest news on HR Payroll and Employment Tax topics
Thank You
wwwemptechcom | 18005183874 | infoemptechcom
Questions
Contact (203) 738-0545 rhendersonemptechcom
- Employment Tax Consulting- UI Claims Management- Credits- Talent Management- Electronic I-9- Verification of Employment
Thank You
wwwemptechcom | 18005183874 | infoemptechcom
Questions
Contact (203) 738-0545 rhendersonemptechcom
- Employment Tax Consulting- UI Claims Management- Credits- Talent Management- Electronic I-9- Verification of Employment
