Employers Liable for Contributions. A new employer liable for contributions coming under the Law for the first time will have a base rate assigned to him of two and sixty-four hundredths percent , and this rate will be effective until such time as the employer is eligible for an experience rate computation. Under experience rating, an employer may have a base contribution rate ranging from five and four-tenths percent down to a minimum of fifty-four hundredths of one percent , depending on four factors; namely, most recent annual payroll, contributions paid, the benefit charges made against his account for unemployment insurance benefits paid to his former or current employees during past years and the statewide reserve ratio. 

Generally speaking, an employer's base contribution rate remains two and sixty four hundredths percent plus any applicable surcharge until at least twelve consecutive months of coverage have elapsed. As of June 30 of the year 12 consecutive months of liability is accomplished a computation is made for an experience rate to apply for the next calendar year.

The books of the Employment Security Commission are closed as of June 30th of each year for the purpose of computing contribution experience rates applicable to the following calendar year. Contributions for the quarter ending June 30 must be received by July 31st to be included. Contributions received after July 31st, and unemployment insurance benefits paid after June 30th, are not taken into account until the next annual rate computation date.

Contribution rates are established as of June 30th of each year to be effective the following January 1st in accordance with the reserve-ratio system, which is the ratio the reserve balance bears to the most recent annual payroll. To arrive at the reserve balance, all benefits charged to an employer’s account are subtracted from the total contributions he has made to the fund. The resulting figure is the employer’s reserve.

 

CONTRIBUTIONS - BENEFITS = RESERVE BALANCE

The ratio obtained by dividing the reserve balance by the most recent annual payroll places the account in a rate bracket established by the Law.

            Reserve Balance

 Most Recent Annual Payroll = Resultant Percentage

In addition to the contribution rate, employers are responsible for payment of a contingency assessment of six one-hundredths of one percent (0.06%) to be assessed upon wages as defined in Section 41-27-380. Employers who have elected to make payment in lieu of contributions as defined in Section 41-31-620, or are liable for the payment of contributions and are classified as a state agency or any political subdivision or any instrumentality of the political subdivision as defined in Section 41-27-230(2), or have been assigned a base contribution rate of five and four-tenths percent (5.40%) are exempted from payment of this contingency assessment.

A statewide reserve ratio will be computed each year by adding all contributions and interest (received on or before July 31^st) to the total unemployment compensation fund (on June 30^th), and dividing the result obtained by the sum of the total wages reported (by employers on their contribution reports) to the Commission during the 12 month period ending September 30^th. The statewide reserve ratio computation will provide the contribution rate as outlined below.                                                                                                                    

If the statewide reserve ratio is two percent (2%) or greater, the base rates will be used.  If the statewide reserve ratio falls below two percent (2%) the base rates will be adjusted as follows:

a)  An additional one-tenth percent (0.10%) will be added to the base rates, if the statewide reserve ratio is less than two percent (2%) but not less than one and nine-tenths percent (1.90%);

b)  An additional two-tenths percent (0.20%) will be added to the base rates, if the statewide reserve ratio is less than one and nine-tenths percent (1.90%) but not less than one and eight-tenths percent (1.80%);

c)  An additional three-tenths percent (0.30%) will be added to the base rates, if the statewide reserve ratio is less than one and eight-tenths (1.80%) percent but not less than one and seven-tenths percent (1.70%);

d) An additional four-tenths percent (0.40%) will be added to the base rates, if the statewide reserve ratio is less than one and seven-tenths percent (1.70%) but not less than one and six-tenths percent (1.60%);

e) An additional five-tenths percent (0.50%) will be added to the base rates, if the statewide reserve ratio is less than one and six-tenths percent (1.60%) but not less than one and five-tenths percent (1.50%);

f) An additional six-tenths percent (0.60%) will be added to the base rates, if the statewide reserve ratio is less than one and five-tenths percent (1.50%) but not less than one and four-tenths percent (1.40%);

g) An additional seven-tenths percent (0.70%) will be added to the base rates, if the statewide reserve ratio is less than one and four-tenths percent (1.40%).”

Rates with Surcharge Relative to State Reserve Ratio

Employer’s Reserve Ratio	Base Rate	<2.00% 0.10%	<1.90% 0.20%	<1.80% 0.30%	<1.70% 0.40%	<1.60% 0.50%	<1.50% 0.60%	<1.40% 0.70%
+9% or More	0.54%	0.64%	0.74%	0.84%	0.94%	1.04%	1.14%	1.24%
+8% but <9%	0.89%	0.99%	1.09%	1.19%	1.29%	1.39%	1.49%	1.59%
+7% but <8%	1.24%	1.34%	1.44%	1.54%	1.64%	1.74%	1.84%	1.94%
+6% but <7%	1.59%	1.69%	1.79%	1.89%	1.99%	2.09%	2.19%	2.29%
+5% but <6%	1.94%	2.04%	2.14%	2.24%	2.34%	2.44%	2.54%	2.64%
+4% but <5%	2.29%	2.39%	2.49%	2.59%	2.69%	2.79%	2.89%	2.99%
<+4% but >-5%	2.64%	2.74%	2.84%	2.94%	3.04%	3.14%	3.24%	3.34%
-5% but <-10%	2.99%	3.09%	3.19%	3.29%	3.39%	3.49%	3.59%	3.69%
-10% but <-15%	3.34%	3.44%	3.54%	3.64%	3.74%	3.84%	3.94%	4.04%
-15% but <-20%	3.69%	3.79%	3.89%	3.99%	4.09%	4.19%	4.29%	4.39%
-20% but <-25%	4.04%	4.14%	4.24%	4.34%	4.44%	4.54%	4.64%	4.74%
-25% but <-30%	4.39%	4.49%	4.59%	4.69%	4.79%	4.89%	4.99%	5.09%
-30% but <-35%	4.74%	4.84%	4.94%	5.04%	5.14%	5.24%	5.34%	5.44%
-35% but <-40%	5.09%	5.19%	5.29%	5.39%	5.49%	5.59%	5.69%	5.79%
-40% or More	5.40%	5.50%	5.60%	5.70%	5.80%	5.90%	6.00%	6.10%

On or about January 31st, of each calendar year, a Notice of Contribution Rate is mailed to the employer showing his rate for the current year.  This form also reflects in detail a schedule of the computation of the rate. 

In addition to the contribution rate, a contingency charge of six one-hundredths of one percent (0.06%) is assessed upon wages as defined in Section 41-27-380.  (See Section 41-27-410.)

The rate table shown above is effective January 1, 2000.