The UI program is part of a national program administered by theUS Department of Laborunder the Social Security Act. It provides temporary payments to people who are unemployed through no fault of their own.
UI is paid by the employer. Tax-rated employers pay a percentage on the first $7,000 in subject wages paid to each employee in a calendar year. The UI rate schedule and amount of taxable wages are determined annually. New employers pay 3.4 percent (.034) for a period of two to three years. We notify employers of their new rate each December. The maximum tax is $434 per employee per year (calculated at the highest UI tax rate of 6.2 percent x $7,000.)
Government and certain nonprofit employers can choose the reimbursable method of financing UI. They reimburse the UI Fund on a dollar-for-dollar basis for all benefits paid to their former employees.
