The majority of Unemployment Insurance (UI) Tax rates for active, contributory employers registered within SUITS and subject to unemployment insurance are calculated automatically by SUITS after an Internal User sets the rate class parameters. Though the calculation is automatic for this majority of employers, there are checks done by the Internal User at each major step of the rate assigning process (entering rate class parameters, after initial calculation before creating batch file, after batch has completed, and to finalize the annual rate). Employers can request a recalculation of the assigned tax rate through the agency and the Internal User can then initiate and monitor the recalculation process.
Other employers who don’t fit the majority mentioned above (i.e., 2% Reimbursable, Has an active Lien, Reinstated account with charges in look back period, Employers with delinquent reports or New Employer) are not eligible for automatic UI tax rate calculation. Instead, a request to assign a UI tax rate is triggered from the registration, annual rate calculation, collection (lien) process, reporting method change, experience transfer, or reinstating processes. SUITS receives the request and assigns a rate according to employer type.
In the event that a business or part of a business is assumed or acquired by a new owner/operator, UI tax information can be transferred to the new business. This existing UI tax data is thought of as the “experience” of the previous business. This experience is transferred to the new owner/operator as the new business becomes liable for the UI taxes of the employees of the business. Within this process the data transfer is called an experience transfer.
Lastly, this toolkit describes the process of identifying potential State Unemployment Tax Act (SUTA) Dumping within SUITS. Per the United States Department of Labor (USDOL), SUTA dumping refers to tax rate manipulation, as practiced by some employers and recommended by some financial advisors, in order to pay lower State UI taxes than their unemployment experience would otherwise allow. The SUTA Dumping Prevention Act of 2004 amended the SSA to add Section 303(k), establishing a nationwide minimum standard for detecting and preventing SUTA Dumping. States are required to amend their UI laws to conform to this new requirement
SUITS data is automatically gathered in the form of data files for a separate software tool called SDDS to process. The SDDS system is utilized in order to find potential SUTA dumping employers (contributory only). SDDS sends the potential hits (SUTA Dumping offenders) back and staff investigates to verify that SUTA Dumping has occurred by taking those potential hits and doing further research within SUITS using the SUTA Dumping Report. Once verified, Internal User downloads the SDDS files which automatically creates work items in SUITS for adjudication. Internal User can then take verified SUTA Dumping violator accounts and set up the appropriate penalties for the quarters affected by SUTA dumping directly on the Employer Account using Add Penalties and Fines process.