Sure, I have to pay unemployment taxes. But where does all of that money go when I do pay it? Does it get lumped together with all of the tax money from the state’s other employers? Do I get my own personal account, as it sounds like, so that I am certain that my money only goes to my former employees to pay for their unemployment benefits? I can hear you asking all of these questions out there, my loyal readers
I have some answers for you, at least when it comes to you Oregon employers. For you guys, the money that you pay in the form of unemployment insurance taxes goes into a trust fund that the state of Oregon uses to pay off its unemployment benefits to all of the state’s out of work people. As for the money that it takes to make sure that the trust fund system is running correctly and on time, that money comes from the Federal Unemployment Tax Act, which employers in Oregon and across the United States pay. This money goes to the Internal Revenue Service, which then doles it out to all of the state unemployment insurance systems, including Oregon’s.
But money isn’t the only thing that makes the system run smoothly. Of course, it takes employers like you to provide information and cooperation to the administrators of the Oregon unemployment insurance system. They rely on cooperative employers to provide quarterly reports on the salaries and payrolls that they have, in order to figure out how much each employer must pay in their unemployment insurance taxes.
The state of Oregon also relies on helpful and honest employers to also provide info when former workers should not be receiving unemployment insurance, such as if the worker is still employed elsewhere, or if the worker wasn’t laid off but fired. That is where a personnel file, well organized, can help out, with its exit interview forms, absence reports, and employee disciplinary action forms.
In the state of Oregon, an employee is anyone who performs services for another person or organization under the direction and control of that person or organization. Even when the employer gives the employee freedom of action, the person performing the service may still be considered an employee. All individuals, including aliens and minors, who are employed for any compensation or under any contract of hire by an employer, are considered to be employees for the purpose of reporting and paying unemployment taxes. This includes contract, casual, or temporary labor. If you have any of these employees, you are required to post Oregon Unemployment Insurance posters in a visible area.
The money used to pay Oregon unemployment insurance benefits comes from Oregon employers – not from the employees, as stated on Oregon Unemployment Insurance Posters. Taxes collected are deposited in a trust fund used to pay unemployment insurance benefits.
The money to administer the unemployment insurance program comes from a federal tax, created by the Federal Unemployment Tax Act (FUTA). This federal tax is assessed against all private employers and is paid to the Internal Revenue Service.
Unemployment Tax Rates are assigned in accordance with Oregon Law. New employers are assigned a “base rate” until they have sufficient “experience” to qualify for an “experience rate” based tax rate. This usually takes about three years. All employers are mailed their rate for the next calendar year by November 15. The employer’s unemployment insurance tax rate is also preprinted on the Oregon Quarterly Tax Report (Form OQ) sent in February of each year.
Employer responsibilities specify that you must do the following.
1. Allow the Employment Department to review your records, if asked.
2. Register using the Combined Employer’s Registration.
3. Post Oregon Unemployment Insurance posters that state you are a subject employer where employees can read it.
4. Keep adequate business payroll records.
5. Pay taxes or reimbursements when due.
6. File the required quarterly or annual tax forms on time with complete information.
7. Inform the Employment Department and Department of Revenue of any changes to the organization or its status.
I came across a Web page that specializes in Oregon unemployment insurance benefits while researching the variations in unemployment between the states. Each state is different when it comes to offering unemployment insurance, therefore, it is important to know about the particular laws of the state you’re working in. The Federal government merely provides guidelines for each state.
In Oregon, the unemployment insurance is temporary and is provided only to workers that meet the requirements of the Oregon law. Part of those requirements involve the worker being first employed for a set period of time and the worker must earn a base amount of money.
Additionally, it must be found that you are unemployed through no fault of your own. Each unemployed individuals must also file ongoing claims showing that he or she is looking for work. If he or she does, indeed, get offered a job, then the individual needs to have a good reason for not accepting the job.
While these requirements are rather common in every state, what is most different about Oregon is the benefit amount and coverage. The maximum amount of money allowed in Oregon is $419 and the minimum is $98. The employee must first be employed for a length of at least 18 weeks, or have earned $225 in any quarter.
With the amount of potential collections an individual can earn on Oregon unemployment, I learned that the state of Oregon provides very competitive and high-rate unemployment benefits that exceed the national average. The computation of the weekly benefit amount in Oregon is 1.25% of the base pay wage. However, $27,000 from the earnings are subject to taxation with a minimum rate of 1.2% and a maximum rate of 5.4%. A person can also stay on unemployment for up to 26 weeks, which matches most other states.
All the detailed information regarding Oregon’s unemployment insurance can be obtained along with the federal labor laws on the Oregon Complete Labor Law poster.