Unemployment Insurance

Unemployment Insurance What you need to know

Background

What is UI?

• The UI program is a federal/state partnership that provides temporary financial assistance to eligible unemployed workers.

• Great Program!

• in February for adult men (8.1 percent), adult women (6.7 percent), whites (7.3 percent), blacks (13.4 percent), and Hispanics (10.9 percent). The jobless rate for teenagers was little changed at 21.6 percent

• Utah currently has almost 44,000 unemployed workers Last year, during this time, only about 16,500 unemployed workers

• UT rate 5%

What is UI?

• Established as part of the Social Security Act of 1935 The original intention was good… to help employees pay their bills between jobs

• Assumption then - Short term benefit – in the Great Depression, employees would seek another job immediately

• Reality Today - Employees consider this “their money” and many try to receive benefits for as long as they can

– Don’t realize Employer is paying 100%

• SUTA Tax is the second highest employer-mandated tax and is the only employer tax that can be controlled

• State Offices are inclined to side with the employee

Employee Side of UI

• Apply for UI Benefits at jobs.utah.gov

– Eligibility – Process

– Available to accept full-time work

• Fill out weekly reports

• Weekly Benefit amount

– Max $444

– Max $11,544 for 26 weeks

Employer Side of UI

• Employee files claim (UT 606)

• Contest or non-contest (time sensitive)

• Decision- appeal (time sensitive)

Utah Claim

Contesting a claim

• Voluntary Quit

• Discharged

– Culpabilty: Work record of incidents

– Knowledge: Must have know what was expected

– Control: Within employee’s control

• Layoff & reduction in hours

Appeal Decision & Hearing

• Appealing a decision

– time sensitive

– Any new evidence

• Hearing

– Hearing procedure

– Witnesses

Employee Tax Review

Employer Tax Review

• FICA - 6.2% for social security and 1.45% for Medicare.

Employer Tax Review

• Employer matches employee FICA tax

• The FUTA rate is 6.2 %, but you can take a credit of up to 5.4% for SUTA taxes that you pay.

– $7,000 wage base

• SUTA Wage Base

– Utah $27,800

– Colorado $10,000

– Arizona $7,000

– Washington $35,700 (highest)

Employer Rates

Employer Rates

• Formula for rates

• Benefit Ratio X Reserve Factor + Social Costs = Rate

• Payout – Quaterly Charges

• State errors

• Claims now are impacting future rates

– Last 4 of the 5 quarters

Any Questions?