Q: When and how do I become liable to pay unemployment insurance?

A: Liability varies depending on the type of business and wage payments.

Q: How do I open an account for unemployment insurance and how is the new account rate determined?

A: You can open an account by downloading and returning Form C-1, Status Report.  New employer rates are assigned by industry classification and full successor rates are based on the previous employer’s experience history of benefits charged against their account versus taxable payroll.

Q: How am I determined a successor and if I am, will I be eligible for a transfer of the predecessor’s rate?

A: If you acquire substantially all the assets of an existing liable business and continue that business, you may be determined a full successor and eligible for a transfer of the predecessor’s rate. A partial acquisition of an existing liable business, which you continue, is not eligible for a transfer and would be rated as a new employer.

Q: How is my experience rate computed?

A: Experience rates are computed annually and are effective July 1^st through June 30^th. They are calculated by using the employer’s three most recently completed calendar years history (taxable wages divided by benefits charged against their account)

Q: Are employee or employer contributions to cafeteria plans and 401K plans considered covered wages?

A: The employer contributions are non taxable.  The employee contributions are taxable.  

Q: Are officer earnings, wages paid to spouses, etc., considered covered wages?

A: Officers of corporations are employees of the corporation.  You must report all gross wages paid to officers of the corporation.  There are some situations where employment is exempt from coverage.

Q: My employees work in more than one state.  Where do I report and pay my unemployment insurance?

A: Generally wages are reported to the state in which the services are performed UNLESS the employee works in more than one state.  Further information on localization is provided.

Q: My business is being charged for unemployment insurance benefits.  Why was I charged and how will this affect my experience rate?  Is there anything I can do in the future to lower my rate?

A: Benefits are paid from the Unemployment Compensation Trust Fund and are charged proportionally to the experience rating record of the base period employers.   Benefit charges against your account may increase your rate.  It is difficult to predict exactly how much as there are variables in the formula.  To lower your rate, benefit charges would need to be lowered or eliminated.

Q: Why should I have to pay unemployment taxes if I’m the corporate officer?

A: As an employee of the Corporation, you may be eligible for Unemployment Compensation benefits providing you meet all of the eligibility requirements.

Q: How do I figure excess wages and taxable wages on my Employer’s  Quarterly Wage and Contribution Report?

A: Excess wages are the wages paid to each employee over the $8,000 wage base and taxable wages are the employee’s quarterly gross wages minus excess wages.  Further information is provided under Filing UI Tax Reports.

Q: Do I have to report a worker on my Contribution report if the total amount paid is under $600.00, if I paid them cash and/or was just “trying them out”?

A: An employer must report all amounts paid to a worker if the work performed is covered under the Unemployment Compensation laws, regardless of the amount. Further information regarding proper reporting is provided in the Employer’s Manual.

Q: Why can’t the Vermont Department of Labor obtain wage amounts from the Vermont Tax Department?

A: The Vermont Tax Department has very strict confidentiality laws, which currently prohibit us from accessing that information.  Likewise, we are also unable to share wage information we gather with them.

Q: What generally determines which employer accounts will be audited?

A: Being selected for an audit should not be construed that the employer has done something wrong.  Each quarter several accounts are selected through a random audit program to meet federally mandated requirements.  Additionally, if the department has reason to suspect an employer is not properly reporting it’s workers, an audit will be conducted to insure compliance of the Unemployment Compensation laws.

Q: How much do I have to pay for this tax?

A: For employers just starting a business, calculating the tax amount can be difficult, as various factors can alter the rate.  To avoid improper calculation, you are encouraged to contact the field auditor in your area or our Employer Services Unit.

Q: Why do I get so many different forms from the department related to Unemployment Insurance claims?

A: There are a number of requests that the department makes of employers related to the unemployment claim process. What those requests are and the reason they are made are as follows:

1.      A Wage & Separation Data Request (Form B-70W) is mailed when we need wages that have not yet been reported to qualify a claimant under "monetary method" two or three. This request must be completed and returned within 10 days of the mailing date; failure to do so will result in a $35.00 penalty.

2.      A Notice of Potential Charges to Your Unemployment Benefit Account (Form B-10NS) is mailed to employers when a claimant is determined to be monetarily eligible for benefits, and the employer's account has been determined to be potentially liable for a percent of all the benefits paid.

3.      A Request for Separation Data (Form B-8F or B-10S) is mailed to the claimant's most recent employer to determine the reason for the claimant's separation from the employer.

With regard to the Request for Separation Data form, if any of the following apply, you must complete and return the notices within the time period indicated on the notice:

·         The claimant was not your employee.

·         The claimant worked somewhere else after      working for you.

·         The claimant resigned, left for medical reasons, retired or abandoned.  

·           You dismissed the claimant for a reason other than lack of work or reduction in force.

·         The form does not list the correct figure for gross wages that you paid the claimant.

·         If the person is still working part-time with no reduction in hours.

·         The Return to Work date provided by the employee is incorrect.

 Instructions for completing requests for separation forms (B-8F or B-10S) are also available.

Q: If an employee quits, how can they collect?

A: A former employee, who quits a job with the last employing unit, may collect benefits if it is found that the reason for the quit is attributable to the employer’s action.  One example of such action by the employer is failure to abide by the terms of the hiring agreement.  The burden of proof for this type of separation lies with the claimant.  Only the separation from the last employing unit is potentially disqualifying.

Q: What percentage of a former employee’s benefits will be charged against my experience rating record?

A: Unemployment Insurance benefits are charged against your experience rating proportionally according to the wages you reported for the claimant during their base period.

Q: How can a former employee file a claim in more than one benefit year?

A: A former employee cannot establish two benefit years at the same time.  Once one benefit year is exhausted, a new benefit year may be established only if the individual has had additional employment and was paid the required wages in the new base period.  Wages not used in determining the weekly benefit amount for the previous benefit year may fall within the new benefit year, in which case you would be proportionally charged again.

Q: Why do I need to complete Form D-254 requesting weekly wages when I have already submitted this information on the Employers Quarterly Wage and Contribution Report?

A: On the Contribution Report, wages are reported quarterly while payment is issued weekly, thus the employer’s weekly breakdown of wages earned from employment beginning on Sunday and ending on Saturday is critical to the case.  This detailed information will identify which weeks, if any, have been improperly paid and will allow the department to take action against those who have received improper payments for failure to report wages earned.  In such cases, the individual will be required to repay the benefits, and the chargeable employer’s account will be credited with its original charge percentage of the improperly paid dollar amount.

Q: Why do I get Form D-254 for wage verification if the person never worked for me?

A: This occurs when an employer submits an incorrect social security number on the quarterly wage report or when a social security number is transposed upon entry into the department’s wage file.  The form should be returned with an annotation making reference to the fact that the individual was never employed by that business.

Q: On Form D-254 what does “Last day worked prior to this time period” mean?

A: We are looking for separation information relative to the weeks indicated on the form.   If the claimant did not separate from employment during the weeks indicated, annotate “N/A”.  If you have further questions regarding proper completion of audit forms, please contact the Program Integrity Unit at 802-828-4333.

Q: How do I complete Form D-254 if our workweek does not end on a Saturday?

A: For hourly employees, the most accurate way to do this is to indicate how many hours were worked during each of the days indicated on the form.  Once you have done this, you can usually multiply the number of hours by the hourly rate, considering any differentials or overtime rates.  When using this method, it is not uncommon for the form to have hours and gross wages indicated in each of the daily boxes.  For example:  5.5/$55 would translate into the person working 5.5 hours, (hourly rate of $10), resulting in total gross wages of $55.00.

Q: What do I do with Form D-254 if the claimant didn’t work for us during the weeks in question?

A: Check the appropriate box on the form indicating claimant did not work during the weeks requested and return the form in the envelope provided to prevent future request for the wage information.