How to Manage UI Cost Effectively
Q & A 
Edition 9

August 28, 2014

What is SUTA dumping?

SUTA is an acronym for State Unemployment Tax Act.   "Dumping" refers to the unlawful actions of an employer to pay at a lower unemployment insurance tax rate than should be assigned based on manipulation of employees and wages within various business accounts.

How and why would an employer SUTA dump?

Instead of paying unemployment insurance taxes at a rate based on actual experience from layoffs, payrolls and claims, an employer attempts, via transference of employees between companies, to deliberately create better experience and consequently, a lower rate.


What are the consequences if an employer is caught SUTA dumping?


Penalties can include a higher unemployment insurance tax rate, monetary fines and imprisonment for as much as five years in some States.

How do I protect our company?

When mergers, acquisitions, transfers of experience and entity changes take place, notify the State Unemployment agency in writing of the specifics regarding each transaction.  Clarification of the employer's intent at the outset can help avoid substantial penalties at a later date.



Us4U has the state of the art tools you need to manage your Unemployment Insurance tax rate!  We offer a tax module that will allow you to complete tax verifications and projections with just a few clicks.  


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