Get your personnel files handy, new employers in the state of Massachusetts. The Massachusetts unemployment insurance benefit system requires that all employers in the state file an Employer’s Quarterly Contribution Report, also called a “Form 1.” That equals four times a year for you guys who don’t have your accountants around reading this blog with you (har har! Just kidding!).
Each time you file one of these Employer’s Quarterly Contribution forms, they go straight to the Division of Unemployment Assistance in the Department of Labor in Massachusetts. This Division of Unemployment Assistance values timeliness and accuracy on these forms, and they’re not just saying that, folks.
Being timely with your Employer’s Quarterly Contribution forms makes sure that you get all of the credit due to you in the system, as that you account with the Division of Unemployment Assistance is accurate and properly reflects your experience with the department. Remember, once you start getting charged the experience rate for the unemployment insurance in the state of Massachusetts (and anywhere really), you get charged less the better “experience” you have—meaning the fewer former employees that you have on the unemployment benefits pay out.
These forms are due by the end of April for the first quarter of the year, by the end of July for the second quarter of the year, by the end of October for the third quarter of the year, and by the end of January of the following year for the fourth quarter of the previous year.
Another reason to get these forms in to the Massachusetts unemployment insurance system on time: they will fine you otherwise. The Division of Unemployment Assistance withholds the right to fine you from $2500 to $10000 if you don’t file the proper forms. You can even be put in prison for up to a year for the offense.
For new Michigan employers, the way to go to join up with the state’s unemployment insurance program could be digital. That is, the state of Michigan has taken important strides in making their unemployment system a 21st century system, complete with full online and electronic reporting and file keeping.
For instance, if you are a Michigan employer this could come in especially handy if you usually have mass layoffs at least once a year. Normally, such layoffs could mean huge swaths of paper files that need to be transferred timely and accurately between your human resource department and the state officials. The electronic record system could also come in handy if you typically have at least 100 former employees filing unemployment benefit request in any given year.
You may also want to look further into Michigan’s electronic system if you regularly use Internet to submit claims or to do other aspects of your human resource day to day business. Or here’s another reason—if you’ve had more than 1000 people laid off in the last three years, each year.
The system works in Michigan because it is the employer—not the former employee—filing the claims for unemployment benefits. That makes sense, because it cuts out the “middle man” in a lot of cases, and that middle man (the former employee) can typically cause an issue because you the employer is then required to verify whatever info that former employee provides the Michigan officials.
With Michigan’s system, on the other hand, you can really directly on your accurate personnel files, including all of the forms you have such as the exit interview form, the employee separation form, and any sort of absence reports or records of disciplinary actions you have to prove that a lay off was actually a firing.
Minnesota officials make it pretty plain: All companies or organizations that have workers doing services for them in Minnesota will have to held to the Minnesota Unemployment Insurance Law. No ifs, ands, or buts (at least not many of them).
That means if you have employees of any shape, size, or form in your offices, warehouses, or work sites in Minnesota, you ought to be registered with the Unemployment Insurance Employer Account system. The system runs through the Minnesota Department of Revenue, which withholds tax from employers, and through the Minnesota Secretary of State.
To register with this system, new employers in the state have to sign up with the Unemployment Insurance Employer Accounts Office. You have 10 days to do so from the first time that you pay wages to a worker in your company. However, new employers should not register before they pay these wages. In other words, the state of Minnesota’s Unemployment Insurance Employer Accounts Office is pretty strict with its 10 day window for your registration.
All of this registration for new employers can be done online at the Web site of the Unemployment Insurance Employer Accounts Office. Or you can register the old fashioned way, through the telephone. But again, the Unemployment Insurance Employer Accounts Office can be pretty strict here too—it requests that you only use the phone registration system if you do not have any access to the Internet.
Once you register, though, your job as a new employer in the state of Minnesota is over, right? Wrong. As with most states out there, Minnesota expects and hopes for certain things out of its employers when it comes to maintaining the unemployment insurance system. One of those things is complete record collection. That means keeping up to date and accurate personnel records, filing all exit interview forms, employee separation forms, and all other documents that keep track of your employees’ comings and goings.
New employers in the state of Mississippi, you most likely will have to participate in that state’s unemployment insurance system too. The way it works with the Mississippi Department of Employment Security, or the MDES, is that new employers are liable to pay unemployment insurance if they match the proper employer status, if they have bought or acquired another company that was already liable for unemployment insurance taxes, or if they voluntarily decide to be liable for the taxes.
What I meant before when I said that a new employer could be liable if “they match the proper employer status” was that liability for unemployment insurance tax is determined by how much you are paying out to your employees, and what type of employees they are. For instance, even for domestic workers—such as nannies, baby sitters, house cleaners—you could be considered a liable employer if you pay them more than $1000 in a quarter.
When it comes to agricultural companies, you could be a liable employer if you pay more than $20,000 in wages in a calendar quarter or have 10 or more workers on your pay roll in some portion of a day during 20 different weeks in the year. Nonprofits even have to pay unemployment insurance taxes if they have more than four workers employed on some portion of a day in 20 or more different weeks out of the year.
For your standard for-profit business, which I am suspecting most of you are, the liability levels come at the payment of more than $1500 of wages in a quarter, or one worker employed during the course of a day in at least 20 weeks out of the year.
Just registering with the Mississippi Department of Employment Security to determine your level of liability for unemployment insurance taxes is just one of the steps that a new employer must do in the state. Don’t forget that you also need a unemployment insurance benefits poster for each and every one of your work sites.
I think for the past few blogs we have done a good job of going over the two main steps that new employers must do to comply with the unemployment insurance system requirements in most states in the United States. Those were of course to register with your state’s system and to ascertain your liability for paying unemployment insurance benefits. And to acquire unemployment insurance posters for each and every one of your work sites and posting them prominently somewhere in the facilities where your workers could read them pretty easily and regularly.
But once you are set up in such a system, like Missouri’s unemployment insurance benefits system for instance, there are steps you can then take to make your compliance a little less costly and a little more efficient for your business.
When you start out in the Missouri unemployment insurance system, for example, you start by paying a fixed percentage of your employees’ salaries as a tax for unemployment benefits. In Missouri, this fixed rate is based on a Standard Industrial Classification, so new businesses of the same ilk all pay the same fixed rate starting out as employers. At this point, you as an employer cannot affect that rate. Good behavior cannot make it go down, and bad behavior will not make it go up.
After two to three years of this, however, you cease being a “new” employer in the eyes of the Missouri unemployment insurance system, and your rate becomes what is called an “experience” rate. This experience rate is based in part on how many of your former employees have made claims on the unemployment system. In other words, if you have a more stable work situation and have less employees getting laid off, you will have fewer former employees claiming unemployment benefits, and you will have a lower experience rate on your taxes. The vice versa is true as well, and your rate can go up if you have more layoffs and more employees claiming unemployment benefits.