Purpose of Unemployment Insurance
The Unemployment Insurance Program provides temporary income for persons who have lost their jobs through no fault of their own while they search for new jobs.
The intent of the program is not only to protect an unemployed worker's financial health, but also to help keep main street businesses and a community's economy stable during periods of high unemployment.
Each person's benefit amount depends on his/her past wages.
Employer Reporting Requirements
Liable employers must electronically file Employer's Contribution and Wage Reports quarterly. Reports can be filed electronically via our UI EASY online filing feature. Reports must be electronically completed and the tax due electronically paid by the end of the month following each calendar quarter. Reports and payments not filed electronically or submitted on time are subject to interest and penalty charges.
Tax payments can be made through electronic funds transfer (EFT) via ACH Debit or by credit card in UI EASY. ACH credit is also available on our web page.
Which Employers Must Pay the Tax?
- Any employer with one or more workers during 20 different weeks in a calendar year or who has paid $1,500 or more in wages in a calendar quarter.
- Any employer who acquires the business of another liable employer.
- Any employer employing workers in North Dakota who is liable under the Federal Unemployment Tax Act (FUTA).
- Political subdivisions and Indian tribes or business enterprises wholly owned by Indian tribes become liable immediately upon employing any non-excluded workers.
- Nonprofit organizations with 501(c)(3) income tax exemptions are liable if they employ four or more workers during 20 different weeks in a calendar year.
- Employers of agricultural labor are covered if they pay $20,000 or more in wages in a calendar quarter or employ ten or more workers in 20 different weeks in a calendar year.
- Employers of domestic labor in a private home, local college club, or local chapter of a college fraternity or sorority are covered if they pay $1,000 or more in wages in a calendar quarter.
Services Excluded From Coverage
Some types of employment are excluded from the unemployment insurance tax. The most notable exclusion is for service performed for a son, daughter, or spouse, or services performed by a child under age 18 for a parent while living in the parents' home.
This exclusion does not apply to corporations or certain limited liability companies (LLC). It applies to partnerships only if the worker has an exempting relationship with each partner.
Corporations and Limited Liability Companies
Corporate officers who perform services for the corporation and receive remuneration for that service are considered employees. The same applies to LLC managers if: 1) the LLC is treated as a corporation for federal income taxation or, 2) the manager(s) is not a member. Employers of certain corporate officers and certain covered LLC managers with 25% or more ownership interest may, with the concurrence of the officer or manager, apply to exclude the officer's or LLC manager's services from employment. The application to do so must be filed within 60 days of formation of the corporation/LLC, or in January of the year in which the exclusion is to begin.
Your Tax Rate
When employers become liable for unemployment insurance they are classified as "new employers" and are assigned a new employer rate. Tax rates are re-determined for each calendar year based on the employer's history as of the preceding October.
If, prior to October, "non-construction" employers have at least six quarters of coverage and "construction" employers have at least ten quarters of coverage, they are classified as "experience-rated employers" beginning the following calendar year; otherwise, they are classified as "new employers." Experience-rated employers are assigned rates based on their record of unemployment insurance taxes paid and benefits charged.
The rates vary each year depending on the employer's individual history and the condition of the state's unemployment compensation trust fund. Check our website for the current rate schedules.
Employers who acquire an existing business may apply for the experience record of the previous owner. If the experience record is transferred, the new owner is also held accountable for any benefits paid to the previous owner's workers. In certain cases, such as those where common ownership, management or control exist, the transfer of the experience record may be mandatory.
The maximum amount of each worker's wages subject to taxation is determined yearly and equals 70% of the calculated statewide average annual payroll.
Some entities, such as government, tribal or 501(c) (3) organizations, have the option of financing benefits by reimbursement rather than the payment of taxes. Under this method, the employer reimburses the trust fund each quarter for all benefits paid to the employer's former workers. Employers selecting this option should be aware that the waiving of charges that applies under certain conditions to tax-rated employers does not apply to reimbursing employers.
Responding to Claim Notices
An unemployed worker may file a claim for benefits by filing from our website by clicking on UI ICE or calling 701-328-4995. The qualifying claimant's most recent employer and all employers who paid wages on which the claim is based (base period employer), are notified that a claim has been filed. If the claimant has been separated from your employment for any reason other than lack of work, return the notice with full details about the separation to protect your appeal rights.
If you are the claimant's last employer, you will be notified whether or not the reasons for separation from your employment are disqualifying. If you are the claimant's base period employer, you will be notified whether or not your account will be charged for the benefits paid to former employees. If any benefits are charged to your account for any calendar quarter, you will receive a notice detailing those charges.
Your Right to Appeal
Employers have the right to appeal determinations and decisions made by Job Service. An appeals referee conducts a hearing where all interested parties are given an opportunity to present evidence in support of their position. The appeals referee's decision may be appealed by requesting a bureau review. Bureau review decisions may be appealed to District Court.
For questions or assistance, please contact the Unemployment Insurance division at Job Service North Dakota.