SUI - How to control your costs

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.