Benefits are paid from the Unemployment Compensation Trust Fund and are charged to the experience rating record of the base period employers. Employers are charged for a percentage of the benefits paid to eligible unemployed workers in the same proportion as the wages used to qualify the individual. For example, if an unemployed worker has two base period employers, both of whom paid the worker the same amount of wages, then both employer accounts would be charged 50% of the benefits paid to the worker. In some cases, an individual employer is not chargeable, in which case that employer's proportional share of the benefits paid are charged to the trust fund, which means that all employers who contribute to the trust fund share in the expense of the non-charged benefits. An employer's liability for benefit charges are set at the time a worker files an Initial Claim, with the employer's remaining liability (or relieved) for the entire benefit year.
A taxable employer may be relieved* of charges if the reason for separation was:
- Discharge for misconduct connected with the work.
- Quit without good cause attributable to the employer.
- Termination under a retirement plan with a mandatory retirement age.
- Leaving due to a health condition.
- Leaving unsuitable work.
* IMPORTANT NOTE: A taxable employer’s account will not be credited for overpaid benefits if the employer’s non-response to request for separation information lead to the improper payment of benefits.
In addition, benefits will not be charged to the experience rating of a base period employer if:
- An individual who works part-time for a base period employer continues to work the same part time hours with that employer. In other words, the employer has not reduced hours or availability to work.
- The individual was hired when an employee took family leave, and the individual's employment ended because the employee on family leave returned.