Unemployment insurance: how do you rate?

Transcription

1 Watch the webcast replay here Unemployment insurance: how do you rate? 7 August 2014

2 Disclaimer This material has been prepared for general informational purposes only and is not intended to be relied upon as accounting, tax, or other professional advice. Please refer to your advisors for specific advice. The views expressed by the presenters are not necessarily those of Ernst & Young LLP. This presentation is 2014 Ernst & Young LLP. All Rights Reserved. EY is a global leader in assurance, tax, transaction and advisory services. The insights and quality services we deliver help build trust and confidence in the capital markets and in economies the world over. We develop outstanding leaders who team to deliver on our promises to all of our stakeholders. In so doing, we play a critical role in building a better working world for our people, for our clients and for our communities. EY refers to the global organization, and may refer to one or more, of the member firms, of Ernst & Young Global Limited, each of which is a separate legal entity. Ernst & Young Global Limited, a UK company limited by guarantee, does not provide services to clients. For more information about our organization, please visit ey.com. Ernst & Young LLP is a client-serving member firm of Ernst & Young Global Limited operating in the US. Score No. YY3373 Page 2

3 Circular 230 disclaimer Any US tax advice contained herein was not intended or written to be used, and cannot be used, for the purpose of avoiding penalties that may be imposed under the Internal Revenue Code or applicable state or local tax law provisions. These slides are for educational purposes only and are not intended, and should not be relied upon, as accounting advice. Page 3

4 Today s Ernst & Young LLP panelists Today s host Greg Carver Ernst & Young LLP Director Employment Tax Services Presenters Mike Willett Ernst & Young LLP Unemployment Services Debera Salam Ernst & Young LLP Employment Tax Services Matt Ort Ernst & Young LLP Employment Tax Services Nicki King Ernst & Young LLP Unemployment Services Ken Hausser Ernst & Young LLP Employment Tax Services Page 4

5 Today s agenda A tax director s perspective on unemployment tax performance Unemployment insurance basics Federal policy and the FUTA credit reduction Elections, due diligence and the impact of transactions UI integrity and claims management Tax rate management and forecasting Get more of the facts you need Questions One-minute recap Page 5

6 A tax director s perspective

7 Let s talk unemployment tax performance Unemployment insurance (UI) cost can be significant 2014 base rates range from 1% to 12% 2014 wage bases range from $7,000 to $41, benefit payments were $90.2B* 2012 benefit overpayments > $10B* The tax director s bottom line Your unemployment tax position affects profitability and job growth Unemployment tax rates generally transfer to buyers, potentially affecting your market worth Assisting states in paying only qualified UI benefits isn t just good for business, it s the law Unemployment tax should be considered in both structural planning and implementation * US DOL statistics available here Employers directly influence their UI tax rates Organizational behavior and management practices have direct impact on tax rates Tax performance depends on teamwork across functions and disciplines A performance evaluation is likely necessary if: Transactions occurred involving bankruptcy or movement of employees across tax accounts or state lines UI claims have been loosely managed or you have not been routinely collaborating with your third-party claims service provider Those experienced in unemployment tax are not regularly reviewing your tax position in all applicable states Page 7

8 Polling question 1 Does the company s tax director request information concerning your unemployment insurance tax performance? A. Don t know/doesn t apply B. Yes C. No D. It s an approach worth considering Poll 1 results 89 16% % Yes No % No, but it s an approach worth considering Page 8

9 Unemployment insurance basics

10 Unemployment insurance overview Federal Unemployment Insurance (FUTA) Pays for administration of state unemployment insurance program State unemployment insurance (SUI) Employer paid at 6.0% with maximum credit of 5.4% allowed (for net normal rate of 0.6%) Wage base is fixed at $7,000 per covered employee per year Funds state unemployment trust fund which pays benefits to qualified unemployed persons Paid only by employers (except in Alaska, New Jersey and Pennsylvania) Wage base varies by state but cannot be less than $7,000 Tax rates vary by state and by employer based partially on SUI benefits paid to qualified workers and charged to the employer s state account Page 10

11 How do your work states rate? This can affect the state UI rate schedule that applies Jobless rate The national jobless rate dropped from 7.8% to 6.7% between November 2012 and April highest 10 State Jobless Ranking rate as of March 2014 Puerto Rico 14.7% ( ) 53 Virgin Islands 13.0% ( ) 52 Rhode Island 8.7% ( ) 51 Nevada 8.5% ( ) 50 Illinois 8.4% ( ) 49 California 8.1% ( ) 48 Kentucky 7.9% 47 Mississippi 7.6% ( ) 46 District of 7.5% ( ) 44 Columbia Michigan 7.5% ( ) lowest 10 State Jobless Ranking rate as of March 2014 North Dakota 2.6% ( ) 1 Vermont (18) 3.4% ( ) 2 Nebraska 3.7% 3 South Dakota 3.7% ( ) 3 Wyoming 4.0% ( ) 5 Utah 4.1% ( ) 6 Hawaii 4.5% ( ) 7 Iowa 4.5% ( ) 7 Louisiana 4.5% ( ) 7 New Hampshire 4.5% ( ) 7 States have seen improvements in their jobless rates except Alabama, New Mexico and Puerto Rico where unemployment increased; and in Kentucky, Missouri and Nebraska where there was no change. Page 11

12 State unemployment insurance basics Federal law sets guidelines Number of weeks benefits will be paid and weekly benefit amount Qualifying weeks, qualifying wages in determining benefits Who is eligible for benefits States govern specifics SUI tax rating system Standard maximum of benefit weeks is generally 26; however, Arkansas, Florida, Georgia, Illinois, Michigan, Missouri, North Carolina and South Carolina enacted legislation to reduce the maximum benefit weeks to less than 26 Primary SUI tax rating systems used by states Reserve ratio = Benefit ratio = SUI taxes paid less SUI benefits charged Average taxable payroll SUI benefits charged Total taxable payroll Delaware and Oklahoma use the benefit wage ratio method, and Alaska uses a method called payroll variation. Michigan and Pennsylvania use a combination of the reserve and benefit ratio methods Page 12

13 2014 SUI costs at a glance States and the District of Columbia, Puerto Rico and Virgin Islands 2014 state wage base Decrease 2 states Wage base and base tax rates 2013 v Highest $41,300 Washington Lowest $7,000 Arizona, California, Puerto Rico Increase 22 states No change 29 states Decrease in SUI wage base Decrease in SUI base tax rates OK, VI IL, VI 24 states 2014 state base tax rates Highest Lowest 1.0% 12.9% Arkansas 0% 5.4% Nebraska Decrease 24 states No change 29 states Increase 7 states No change 22 states Increase in SUI base tax rates Increase in SUI wage base states 22 states State unemployment insurance costs are showing a slight downward trend as jobless rates improve in many states. For state specifics and to benchmark your SUI rates against others in your state or industry go to Page 13

14 Federal policy and the FUTA credit reduction

15 FUTA tax rate basics FUTA tax Maximum tax of 6.0% Maximum credit of 5.4% Net normal tax rate of 0.6% Loan related FUTA credit reduction Starting in year 2 a standard +0.3% is added each year (i.e., 0.3%, 0.6%) FUTA credit reduction Applies to individual employer that has not paid minimum SUI in full and at minimum amount Applies to all employers in a state that has not met certain federal standards Applies to all employers in a state carrying a federal FUTA loan balance for two or more years States with an outstanding federal FUTA loan also must pay interest by each 30 September Plus 1 or 2 below 1. Starting in year 3 a 2.7 add on (cannot be waived once triggered) 2. Starting in year 5 a Benefit Cost Rate (BCR) add on (waiver must be requested by July 31) Page 15

16 2014 FUTA credit reduction states State First year of loan 2013 FUTA credit reduction Net 2013 FUTA rate Projected 2014 FUTA credit reduction Projected 2014 BCR add-on Projected potential 2014 net FUTA rate BCR add-on status for 2014 Arkansas % 1.5% 1.2% 0.5% 2.3% Waiver not requested California % 1.5% 1.2% 1.5% 3.3% Waiver requested Connecticut % 1.5% 1.2% 0.5% 2.3% Waiver not requested Delaware2, % 1.2% 0.9% 0.0% 1.5% Not applicable Georgia % 1.5% 1.2% 0.6% 2.4% Waiver not requested Indiana % 1.8% 1.5% 1.2% 3.3% Waiver requested Kentucky % 1.5% 1.2% 1.0% 2.8% Waiver requested Missouri % 1.5% 1.2% 0.4% 2.2% Waiver requested New York % 1.5% 1.2% 0.7% 2.5% Waiver requested November 10 is key The final determination of FUTA credit reductions is determined after November 10 and depends on if the state has an outstanding federal loan balance on that day North Carolina % 1.5% 1.2% 0.5% 2.3% Waiver requested Ohio % 1.5% 1.2% 1.4% 3.2% Waiver requested Rhode Island % 1.5% 1.2% 1.0% 2.8% Waiver requested South Carolina %** 1.5% 0.5% 2.6% Full waiver requested Virgin Islands % 1.8% 1.2% 1.6% 3.4% Waiver requested Wisconsin % 1.5% 1.2% 0.1% 1.9% Waiver requested As of July 15, 2014, Arkansas, Delaware, Georgia, Missouri, Rhode Island and Wisconsin plan to have their loan balances repaid on November 10, and if that is the case, there will be no FUTA credit reduction in these states. Page 16

17 Federal proposed legislation President s FY 2015 proposals Proposed federal law Potential effect on employers Reinstate and make permanent the 0.2% temporary surtax Increases the FUTA tax rate from 6% to 6.2% beginning 1 January 2015 Suspend FUTA interest payments and FUTA credit reduction for 2014 and 2015 Provides substantial relief to employers that have workers in states with an outstanding federal loan (as of July 2014, 15 states are at risk of incurring federal UI loan interest charges) Increase FUTA wage base to $15,000 in 2017 and reduce net FUTA rate to 0.37%. Adjust the FUTA wage base annually based on the average wage Would increase SUI tax in the those states that have a taxable wage base of less than $15,000 Did you know? For 2014, 32 states have a wage below $15,000. South Dakota s wage base is set to increase to $15,000 in Page 17

18 FUTA wage base increase Example: Assume that in 2014 an employer has a US workforce of 10,000 employees distributed evenly in the states of California, New Jersey, New York, Ohio, and Texas and that its average SUI rate in all of the states is 3.0%. As shown below, the employer s SUI taxes would increase by close to $1.5 million as a result of raising the states wage base to a minimum of $15,000. State Taxable wage base Employees Taxable payroll Average UI rate Total SUI tax cost in 2014 Total SUI tax if wage base at $15,000 California $7, $14,000, % $420,000 $900,000 New Jersey $31, $63,000, % $1,890,000 $1,890,000 New York $10, $20,600, % $618,000 $900,000 Ohio $9, $18,000, % $540,000 $900,000 Texas $9, $18,000, % $540,000 $900,000 Total $4,008,000 $5,490,000 Page 18

19 2014 SUI financing at a glance 2014 FUTA rates projected over 0.6% States with outstanding FUTA loan balances 2012 to 2014 Highest 3.3% Virgin Islands California 2014 BCR triggers for 14 of 15 states 1.5% Lowest Delaware 2014 state interest or bond assessment rates (15 states) No change 29 states 2013 Projected Form 940 actual Form 940 Actual 2012 Highest 3.0% Indiana Lowest 0.029% North Carolina States have been slow to repay loans or bonds borrowed due to the markets collapse of Employer UI costs continue to increase as loan balances linger. For state specifics and to benchmark your SUI rates against others in your state or industry go to Page 19

20 Polling question 2 Has your employer acquired other businesses in the last three years? A. Don t know/doesn t apply B. Yes C. No Poll 2 results 23 3% D. We plan to % % Yes No We plan to Page 20

21 Elections, due diligence and transactions

22 Employer SUI contribution variables How much SUI tax an employer pays depends on how it manages each of these variables The employer s SUI rate can be passed along to buyers making it a consideration in determining the market worth of the business Statutory elections that can lower rates Voluntary contributions Joint accounts Transactions and statutory elections Disqualifying wages Covered employee exclusions Transactions Merger Acquisition Reorganization Bankruptcy Credits Business relocation incentives Voluntary transfer of experience Covered wage exclusions Penalty rate assessment Claims charged to the employer s account Employee transfers Business closing Business start up These variables can have the greatest impact on an employer s SUI tax rate Page 22

23 Statutory elections The two most commonly known Voluntary contributions Joint accounts Allowed in 26 states Employers can buy down their SUI rates with certain restrictions Some states will notify the employer if the voluntary contribution was insufficient to lower its UI rate (however, the voluntary contribution is not refunded once it is made) Allowed in 10 states By mathematically combining their unemployment experience, the members of a joint account can share their reserves, effectuating an overall reduction in SUI rates Duration of joint account varies by state A joint account does not alter the corporate structure Careful analysis is necessary to ensure elections will have a positive influence on current and future SUI rates. Elections must be made by the statutory deadline which is frequently triggered by the date the annual SUI rate notice is issued. Page 23

24 Statutory elections (continued) Some less commonly known Direct tax credits Business relocation incentives Qualifying fully-merit-rated Michigan employers were able to apply for a tax credit against their Michigan SUI for additional FUTA tax they paid due to the FUTA credit reduction in calendar years 2009 through 2011 Some states will allow new businesses entering into the state to bypass the higher new employer SUI rate by factoring into the rate calculation a more favorable experience in the previous state Kansas and Tennessee adopted provisions in 2014 Working with unemployment insurance tax professionals who are knowledgeable of state unemployment insurance laws and aware of law changes is important in managing SUI costs. Page 24

25 When employees change their work state When an employer transfers employees from one state to another within the same calendar year and under the same FEIN, most states allow a credit for wages paid in the previous state up to that state s wage limit Example: Assume an employee earned $12,000 in Kansas through June Wages up to the Kansas wage base of $8,000 are credited against the wage base in the state of transfer. Therefore, if the employee moved to Arizona in July 2014 with a wage base of $7,000, no SUI tax would be owed in Arizona for this employee for the remainder of the year. Did you know? Louisiana, Minnesota (and Montana effective in 2014) don t allow for the transfer of wages under these circumstances. Therefore, if the Kansas employee moved to Minnesota in 2014, UI tax is due on the first $29,000 of covered wages paid in Minnesota. Page 25

26 Mergers, acquisitions and transfers 1 Do the wages paid by the predecessor transfer to the successor employer in determining if the employee wage base is reached? 2 Is the SUI rate of the predecessor taken into account in determining the SUI rate of the successor? Bake Co. Parent Sweet Co. Analysis of state law Knowledge of state enforcement practices Identification and understanding of relevant case law Adequate documentation of facts and authority supporting the tax position Timely state registrations and business change notices Employer implementation Nature of the sale Partial or total transfer Common ownership, management or control Bankruptcy or other special circumstances The transaction dates Conditional factors Bake Co. Subsidiary Whether the transfer of wages or experience is mandatory or voluntary depends on state law and various factors. Successful implementation is the responsibility of the employer. Page 26

27 Case in point 1 Common management or control The Minnesota Court of Appeals ruled that the Minnesota Department of Employment and Economic Development incorrectly set the state unemployment insurance (SUI) rate for a newlyformed employing unit at 8.3% rather than the new employer rate of 3.4%. At issue in the case was whether the department was correct in asserting that partial experience of the predecessor employer was required to be transferred to the successor employer because the entities were under substantially common management or control. (Continental Hydraulics Incorporation v. Department of Employment and Economic Development, No. A , 10 June 2013) Page 27

28 Transaction analysis matters Here are just three recent examples of how transaction analysis had a significant unemployment tax impact Bankruptcy reorganization $10,000,000 tax reduction New acquisition $6,000,000 tax reduction Prior acquisition $1,400,000 refund It adds up! Page 28

29 Polling question 3 Has a tax professional reviewed your prior year employment tax history in the last three years to identify refunds or errors? A. Don t know/doesn t apply B. Yes C. No D. I d like more information Poll 3 results 21 4% Yes % % No I d like more information Page 29

30 UI integrity and claims management

31 Unemployment insurance integrity Responding to UI claim notices is the law Many states aggressively enforce UI integrity law Under the federal Trade Adjustment Assistance Extension Act of 2011, an employer s account is required to be charged for unemployment insurance overpayments that are caused by: An employer s (or an agent of the employer s) pattern of failure to respond timely or adequately to a state s request for employee separation information All states were required the adopt the provision by 22 October 2013 States may adopt a stricter standard than pattern of failure Page 31

32 Claims management overview The four components of claims management Educate and train Benchmark Benefit statement audit Claim review Page 32

33 Claims management (continued) Claim review Review details concerning separation Voluntary quit? Reason for involuntary separation? Gather documentation Disciplinary actions Warning letters Respond to information requests Provide all information requested Meet deadlines Page 33

34 Claims management (continued) Benefit statement audit Validate claimants Your employee? Are you the base period employer? Validate benefits Correct benefit calculation? Correct benefit start/end date? Notify state Meet deadlines Provide required documents Page 34

35 Claims management (continued) Benchmark Claims activity report Identify plant, department, supervisor Recap reason for claim Analyze Are hiring practices an issue? Are management practices an issue? Implement Create goals as appropriate Measure progress Page 35

36 Claims management (continued) Educate and train Workforce dynamics Hiring policies Procedures for discipline and terminations Documentation and communication Unemployment law basics What is the cost of claims? How can claims activity be reduced? Claims hearings What is involved in a claims appeal hearing? How is witness testimony presented? Page 36

37 Polling question 4 Have you evaluated as yet how your claims activity will affect your unemployment tax rates for next year? A. Don t know/doesn t apply B. Yes C. No D. We plan to Poll 4 results % % % Yes No We plan to Page 37

38 Tax rate management and forecasting

39 Tax rate management Additional surcharges or special assessments In addition to the basic UI rate, a number of states also impose surcharges or special assessments (e.g., interest surcharge for outstanding federal UI loan) Generally, assessments that are made in addition to the basic SUI rate are not treated as SUI contributions for purposes of determining if the maximum 5.4% FUTA credit applies Be certain to correctly identify surcharges that are not counted toward the FUTA credit (as reported on Form 940), in particular, if they are not separately billed Did you know? Starting in 2013, Virgin Islands employers pay an interest assessment of $25 for each employee reported in the first quarter of the year. Page 39

40 Tax rate management Penalty rates for late filers/payers State Penalty rate Alaska Highest rate in rate schedule Indiana Rate + 2% Michigan Rate + 3% Montana 50% of rate Ohio 120% to 125% of rate Pennsylvania 3% higher than computed rate Virginia Washington Maximum base rate 1% to 2% increase in base rate Penalty rates give employers a substantial monetary incentive to file and pay on time. It is important to review the cause of penalty rate assignments, negotiate to have them eliminated and to prevent them whenever possible. Page 40

41 Tax rate management Protesting rates There are numerous elements and calculations necessary to arrive at an employer s UI tax rate Any number of errors can occur in the UI rate calculation Employers can contribute to errors by not making timely and correct elections pursuant to mergers, acquisitions, transfers and statutory elections States provide a limited time in which to protest incorrect SUI rates and to request a refund of resulting SUI tax overpayments Did you know? Benefit statement audit findings are integral to the tax rate review. Page 41

42 Tax rate management Common rate calculation errors Common errors in UI rate calculations State error Assignment of penalty rate in error Employer error Failing to transfer previous state wages when employee moves to another state All employer contributions not posted Benefits charged incorrectly to account Taxable payroll and reserve balances not timely or correctly transferred Failing to take into account wages paid by predecessor Failing to notify state of a total or partial acquisition Not taking advantage of statutory elections Incorrect or untimely posting of statutory elections Computer or other error in arriving at the UI rate Enforcement practices not consistent with law Not timely dissolving joint accounts that are no longer advantageous Failing to notify the state of disqualifying wages such as severance pay in some states Insufficient documentation to support a tax position Page 42

43 UI cost forecasting Factors to consider in UI budget forecasting Rate schedule Elections Headcount Taxable payroll UI benefits State s range of base rates for the rating year Employer factors affecting the rate assigned to employer from the range of base rates for the rating year Did you know? Some states (e.g., New Jersey) assign rates on a fiscal year, rather than a calendar year basis. This too needs to be considered when budgeting for UI costs. Page 43

44 Ernst & Young LLP s 2014 pick of six to watch for future cost increases State 2014 drop in wage base or base UI rate 2014 wage base below $15, UI trust fund loans/bonds March 2014 jobless rate above 6.7% US average California $ 7, % Illinois $12, % Kansas $ 8,000 Michigan $ 9, % Nevada 8.5 % Virgin Islands 13.0% Did you know? Having a high UI wage base is no indicator of UI trust fund solvency. New Jersey for instance had a FUTA credit reduction through 2013 although its wage base was in excess of $30,000. Page 44

45 Get more of the facts you need Learn more online and anytime! Benchmark your UI performance by industry and state by participating in our survey Get key state unemployment insurance facts for your work states Download our Guide to Unemployment Insurance in 2014 It s all free from UI Fact Finder Log in at: Page 45

46 Questions? Page 46

47 Webcast top 10 questions and answers Unemployment benefits Question 1: How are employers made aware of any potential penalties when the third party claims administrator has provided inadequate responses to claim notices? Answer 1: A review of the benefit charge statement will assist you in identifying cases where benefits were paid to individuals who did not qualify. If there is any specific penalty for failure to respond to state information requests, you and your third party provider should receive notification of the penalty assessment. This is why review of the third-party provider s benchmark reports is so important, as benchmark reports provide a measure of determining management performance and the costs you are incurring because of performance failures. Question 2: Answer 2: Are we required to provide the state with separation information for employees who were laid off? Leading practice is to respond to all state requests for separation information when asked. If you have a mass layoff, a phone call to the state workforce agency would be beneficial. Some agencies will allow you to submit a list of the laid off employees and may agree to facilitate the processing of applications for unemployment benefits at your work facility. Question 3: Are there any specific penalties for an employer's failure to respond timely and fully to a state's request for separation information? Answer 3: In addition to charging the employer's account for improper benefit payments made to your employees, some states also impose a separate fine. For instance, Maryland imposes a $15 penalty for each violation, regardless of the reason for the employee separation. Page 47

48 Webcast top 10 questions and answers FUTA credit reduction* Question 4: Should employers accrue for the Benefit Cost Rate (BCR) add- on or will the waivers applied for by most of the states likely be approved by the US Department of Labor? Answer 4: The deadline for states to request a waiver of the Benefit Cost Rate (BCR) add-on to the FUTA credit reduction expired on July 31, The final projected FUTA credit reduction amounts as of July 28, 2014, were released by the US Department of Labor and are shown in the chart on page 16. Employers should budget according to the rates shown on page 16 until such time as the US Department of Labor issues final information concerning the FUTA reduction rates for 2014, which will be sometime after November 10, States with an unpaid loan balance as of November 10, 2014 will be subject to the FUTA credit reduction in Question 5: How likely is it that the BCR waivers will be approved? Answer 5: States that request the waiver of the BCR are usually approved; however, nothing is certain until the US Department Labor makes its final determination, which is sometime after November 10, * FUTA refers to federal unemployment insurance tax under the Federal Unemployment Tax Act Page 48

49 Webcast top 10 questions and answers State unemployment insurance Question 6: Answer 6: What is the rule for determining the state to which an employer pays unemployment insurance contributions? The four-prong test is used in determining the state to which an employer is required to make unemployment insurance contributions pursuant to an employee. Under this test, the state where contributions are paid is where the employee performs some work, and where (n this order) : (1) the work is localized (2) there is a base of operations (3) there is direction and control If don t apply: (4) the employee resides, even if services are not provided in the resident state. For more information see the US Department of Labor, Letter No Page 49

50 Webcast top 10 questions and answers State unemployment insurance Question 7: Answer 7: When our employees work in more than one state, we report to each state those wages paid in connection to the services within the state. We now have states sending us notice that we have underreported our employees' wages pursuant to those wages earned outside of the state. An employee s wages are generally sourced to one work state where the employee is primarily employed. Wages paid for services performed in other states that are incidental to the work in the primary state are reported to the primary state. If you are reporting an employee s wages to more than one state for the same work period, you are likely due a refund for unemployment insurance contributions made to those states that are not the primary work state. Conversely, additional unemployment insurance contributions are owed for those wages that were not reported to the primary work state. How can we prevent these state notices? Question 8: In which state does the employee apply for unemployment benefits if working was performed in more than one state? Answer 8: Employees will generally apply for unemployment insurance in their resident states. The workforce agency of the resident state will need to know which state the employee's wages were credited for unemployment insurance purposes if they were not reported to the resident state. Employees in this situation should ask their employers to tell them which state their employer reported wages for unemployment insurance purposes. Page 50

51 Webcast top 10 questions and answers State unemployment insurance Question 9: Answer 9: We have an employee who works in Abu Dhabi. Are we required to make state unemployment insurance contributions for this employee? In Rev. Rul , the IRS clarifies that US residents working outside of the US are not subject to federal unemployment insurance. With limited exceptions, the states follow the federal rule concerning coverage of US employees working abroad. Question 10: Which states allow employers to elect the joint account option? Answer 10: For state-by-state information concerning voluntary contributions and joint account elections download your states reports from the Ernst & Young LLP UI Fact Finder at Page 51

52 Coordination and teamwork are key to performance Page 52

53 Ernst & Young LLP Putting inform into information Connect with us Tour the Guide to unemployment insurance Follow us on Visit us on Perspectives from EY Read our Get employment tax Page 53