Form Nys-50 - Employer'S Guide To Unemployment Insurance, Wage Reporting, And Withholding Tax Page 16
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52Page 16 of 52 NYS-50 (10/11)
Size of fund index
Each employer’s account balance is calculated on December 31 of each
year (the computation date). The account balance is used to determine
To link the normal and subsidiary tax rates to the overall condition of
the account percentage that, in turn, is used to determine the employer’s
the unemployment insurance fund, the law establishes various series of
normal and subsidiary tax rates.
rates for qualified employers. A size of fund index determines which of
these series is to be used for a particular calendar year. This index is the
Account balance
ratio of the balance in the fund as of December 31 to whichever is the
higher: (1) total taxable payrolls for all employers in the last preceding
When the taxes paid and credited to an employer’s account exceed the
payroll year, or (2) the average of total taxable payrolls for all employers
benefits charged, the employer has a positive account balance and tax
for the five preceding payroll years. The size of fund index percentage
rates are based on the employer’s positive account percentage (see
is shown on the annual notice of tax rates sent to each employer. Size
Account percentage below).
of fund index percentages may be obtained by calling the Department
When benefits charged to an employer’s account exceed the taxes
of Labor, Employer Account Adjustment Section (see Unemployment
paid and credited, the employer has a negative account balance and
insurance issues — Where can I find the answers? on page 46).
tax rates are based on the employer’s negative account percentage.
However, if on December 31, the negative account balance exceeds
Tax rate notification
21% of the taxable payroll for the preceding payroll year (October 1
Employers are notified of their tax rates each year well before the April
through September 30), the balance in excess of 21% is transferred out
30 due date for the first quarter report.
of the employer’s account and charged to the General Account. For the
following year, the employer is assigned a normal tax rate based on the
Qualified employer
employer’s negative account percentage prior to the transfer and, for the
three succeeding years, will be assigned the maximum tax rate for that
To be qualified for a normal tax rate based on experience, an employer
year’s size of fund index (see Normal Tax Rates on pages 18 and 19).
or the employer and any predecessor (1) must have been in the
system during the five calendar quarters ending on the computation
An employer with stable employment who has a negative
date of any year, (2) must have filed all contribution returns, had an
account balance on December 31 will receive an improvement of
amount of contributions due, or an amount of wages paid determined
four percentage points to their account percentage for the purpose of
by the Department of Labor in the three payroll years (the payroll
determining the next year’s normal tax rate. An employer is considered
year encompasses the four consecutive calendar quarters ending on
to be stable if the total wages paid by the employer during the payroll
September 30) preceding the computation date, and (3) must have
year preceding the computation date is greater than or equal to 80% of
paid some remuneration to employees in the payroll year ending
the previous three years’ average total wages. However, the normal tax
September 30 preceding the computation date.
rate resulting from this adjustment may not be less than 6.1%.
Transfer of experience
Account percentage
When a transfer of business occurs, the acquiring employer takes over
The account percentage is the balance (positive or negative) in the
the transferring employer’s experience rating account. If only a portion
employer’s account on December 31 of any year divided by the average
is transferred or sold, then only a portion of the account is transferred
taxable payroll for the preceding five payroll years (October through
in proportion to the payroll or number of employees assigned to the
September). If an employer has been liable for 21 or fewer calendar
transferred organization. The account taken over remains chargeable for
quarters, the average taxable payroll will be computed from the initial
benefits paid that are based on employment in the business prior to the
date of liability to the end of the last payroll year.
transfer. Employers are notified of any resulting change in tax rates.
If the employer has been liable for twenty-one or fewer consecutive
A transfer of business occurs when an employer transfers or sells all or
completed calendar quarters and has a positive account percentage,
part of an organization, trade, or business to another employer, and at
that percentage is multiplied by a benefit equalization factor to establish
least one of the following conditions exists:
an equalized account percentage which is used to determine the
employer’s tax rate. This is done in order to give new employers equal
1. The acquiring employer has assumed any of the transferring
opportunity with established employers to earn rate reductions.
employer’s obligations.
2. The acquiring employer has acquired any of the transferring
Benefit equalization factor
employer’s goodwill.
3. The acquiring employer has continued or resumed the business
Number of quarters of
Employer’s benefit
of the transferring employer either in the same establishment or
employer liability
equalization factor
elsewhere.
5
3.00
4. The acquiring employer has employed substantially the
6
2.50
same employees as those the transferring employer had employed
in connection with the organization, trade, business, or part thereof
7
2.05
transferred.
8
1.75
A transfer of business also occurs when a business transfers some or all
9
1.55
of its workforce, payroll, or both, to another employer, and (at the time of
10
1.40
transfer) there is at least ten percent common ownership, management,
11
1.25
or control of the two employers. Penalties are assessed if an employer,
its advisor, or both, knowingly engage in evasion, misrepresentation,
12
1.12
or willful nondisclosure regarding the transfer with the Unemployment
13
1.04
Insurance Division.
14 through 21
1.00
In the event of any business transfer in whole or in part, employers
Note: The benefit equalization factor does not apply to an employer
must notify the Unemployment Insurance Division. Notice of the transfer
with a negative account percentage because it would adversely affect
can be entered on Form NYS-45, or sent directly to the Liability and
I
the rate. If an employer with less than 21 quarters of liability becomes a
Determination Section on Form
A 15, Change of Business Information.
successor to an employer with more than 21 quarters, the benefit factor
Notice of the transfer must be given to the Division before the end of
does not apply.
the year following the calendar year in which the transfer occurred if the
transfer is to be recognized for experience rating purposes.
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