Background on Unemployment Compensation and UC Tax Rates
State Unemployment Insurance (SUI) Experience Rating Overview
The SUI experience rating is a process by which employer contributions under the state unemployment compensation laws
may be varied on the basis of the individual employer's experience. The notion is that the cost of unemployment compensation
should be paid in such a way that employers with a poor unemployment compensation experience should pay a higher tax rate
than those with a good experience.
As a result of their experience rating, employers may be liable for SUI taxes anywhere between the lowest state rate
under the law (averaging 0.68% in 2015) and the highest rate (averaging 8.47% in 2015). SUI experience rating is provided
under all state unemployment compensation statutes, but the formulas used can vary from state-to-state. The calculations
typically consider the employer’s unemployment compensation experience over the past three years.
Employee wages subject to SUI taxes also vary from state-to-state. In 2015, they varied from a low of $7,000 to a high
of $42,100. The national average for 2015 is $18,451.20.
Since subscription-based outplacement covers 100% of your separating employees, regardless of reason for leaving and
for as long as needed, it provides optimal improvement in an employer's unemployment insurance experience rating. Over time,
the yearly savings can be huge.
To help you understand how all of this ties together when using the UC Outplacement Impact Estimator found above, we've
included the following.
Small organizations can potentially save thousands of dollars annually and large organizations could save millions. This
is a nice benefit, but here are lots of other benefits associated with subscription-based outplacement services. We cover
many of them elsewhere in this website.