SUI - How to
control your costs:
To minimize your UI contribution rate can be accomplished
by:
An employer who maintains a stable workforce, while filing
and paying taxes on time, generally has a lower UI rate. An
employer who experiences high turnovers, large fluctuations
in payroll, and/or files and pays taxes late will have a
higher rate.
The following suggestions may help you to minimize your UI
contribution rate:
v
Work with your employees to avoid layoffs and voluntary
quits. Every separation has a potential to increase your UI
contribution rate.
v
Grant leaves of absence to employees to help you keep fully
trained personnel.
v
Give written warning notices prior to discharging an
employee. Keep a copy of these written notices and any
supporting information for use in justifying the actions
taken.
v
Conduct exit interviews with employees to understand why an
employee is leaving. This may result in changes to your
company policies or procedures and may assist you in
retaining your trained employees.
v
Respond on time to any claim notices received from
EDD.
v
Provide clear answers to telephone interview questions from
EDD personnel.
v
Bring witnesses with firsthand knowledge of pertinent facts
when attending an appeal hearing.
v
File and pay tax returns on time.
v
Rehire former satisfactory employees who are currently
receiving UI benefits.
VOLUNTARY UI
CONTRIBUTION
During the years when contribution rate schedules AA through
D are in effect, eligible employers may voluntarily pay an
additional UI contribution to obtain a lower rate. A
Voluntary UI Contribution Notice (DE 2088A) is sent
to eligible employers, reflecting the amounts payable to
receive a lower rate. If you are eligible, you have until the
last working day in March to submit your payment. There is no
provision allowing late payments for “good cause”
or granting an extension period. Specific instructions are
provided on the DE 2088A.
PERCENTAGE |
CONTRIBUTION
RATE SCHEDULES |
|
Greater
than: |
Equal to or less
than |
|
1.8 |
|
AA |
1.6 |
1.8 |
A |
1.4 |
1.6 |
B |
1.2 |
1.4 |
C |
1.0 |
1.2 |
D |
0.8 (or equal to) |
1.0 |
E |
0.6 (or equal to) |
0.799 |
F |
You are not eligible to participate in the voluntary UI
contribution program if you:
v
Have a required rate of 3.4 percent.
v
Have a negative reserve account balance.
v
Already have been assigned the lowest possible
rate.
v
Have been notified prior to September 1 of any unpaid amount
owed to EDD which is not the subject of a timely petition for
reassessment pending before the California Unemployment
Insurance Appeals Board (CUIAB) on September 30 preceding the
year to which a contribution rate is
applicable.
v
Are subject to Section 977(c) of the CUIC. It is your choice
to participate. You should estimate the effect that a
voluntary UI contribution may have on your account to
determine if it will reduce your contribution costs for the
year. A DE 2088VU for this purpose is provided with the
voluntary UI notice. Obtaining a lower rate may not reduce
your annual UI costs. The voluntary UI contribution is not a
prepayment, but an additional payment, and cannot be deducted
on a future tax return. Once a voluntary payment is made, the
reduced rate is in effect for the full calendar year and the
payment is not refundable.
Section 976.5 of the CUIC prohibits voluntary UI
contributions when rate schedule E or F is in effect, or in
calendar years to which the emergency solvency surcharge is
in effect.
976.5 of the CUIC
(a)
Except as provided in subdivision (b), in addition to other
contributions required by this division, every employer,
except an employer to which subdivision (c) is applicable,
may submit a voluntary unemployment insurance contribution
for the purpose of re-determining its unemployment insurance
contribution rate. No re-determination of a contribution rate
shall be made unless the voluntary contribution is submitted
as required in subdivision (c) of Section 1110. No
re-determination shall reduce an employer's unemployment
insurance contribution rate by more than three rates as
provided in Section 977.
(b)
This section shall not be operative in calendar years in
which Contribution Rate Schedules E and F in Section 977 are
in effect, or in calendar years to which the emergency
solvency surcharge provided in Section 977.5 is in
effect.
(c)
This section does not apply to any of the
following:
(1) An
employer not eligible for a contribution rate other than that
provided pursuant to Section 982 or subdivision (c) of
Section 977.
(2) An
employer with a negative reserve account balance on the
computation date.
(3) An employer who was notified
prior to September 1 of any unpaid amount owed to the
department which is not the subject of a timely petition for
reassessment pending before the appeals board on September 30
preceding the year to which a contribution rate is
applicable.
If you have any questions concerning form DE 2088A
Voluntary UI Contribution Notice. Here is a link to
DE 2088A
http://www.edd.ca.gov/pdf_pub_ctr/de2088vu.pdf
or Please contact us at:
Cloud
Payroll
7231 Boulder Ave. #526
Highland, CA 92346
Ph 909-657-6019
www.CloudPayrollPros.com
The information for this article was obtained from the
California EDD web site.