VIRGINIA EMPLOYMENT COMMISSION

1. VIRGINIA EMPLOYMENTCOMMISSION

2. Tax Rates and Benefit Charges

3. Types Of New Employer Tax Rates • New employers assigned Base Tax Rate (2.5%), plus Pool Cost Charge and Fund Building Charge. (New employer rate varies each year based on Trust Fund factors. Assigned for 2 - 3 calendar years) • If acquiring an existing business – Successor assigned Predecessor tax rate unless transfer of experience waived (Must be waived within 60 days of the date of acquisition….not notification.) • Out-of-State Building/Highway Contractors - Assigned maximum tax rate.

4. Experience RatingAfter your New Employer Rate • Based on employer’s experience consisting of up to last 4 completed fiscal years (July 1 through June 30) • Charges for benefits paid are divided by employer’s SUTA paid taxable payroll for that period to create benefit ratio. • Benefit ratio converted to percentage form and applied to experience rating tax table to create Base Tax Rate

5. Additional Tax Rate Costs • Pool Cost Charge: Compensates for charges that cannot be assigned to any specific employer (out-of-business, not-covered, higher than max rate, etc) • Fund Building Charge (.2%): Imposed when the trust fund balance does not exceed 50% solvency

6. Tax Rate Notice • Generally mailed in November notifying employer of tax rate for upcoming calendar year • Reflects unemployment paid taxable payroll and unemployment benefits paid for last four fiscal years • Tax Rates normally assigned by calendar year • Tax Rate = Base Tax Rate + Pool Cost Charge + Fund Building Charge

7. Unemployment Benefit Charges • Quarterly charge statements are sent to employers identifying claimants and benefit amounts paid • For SUTA TAX Paying Employers: Charge claimant’s last 30 working day/240 hour employer • Work days do not have to be consecutive • Disputed claims – Employers should respond timely to all inquiries by VEC staff to ensure effective participation in the adjudication process

8. VEC Tax Rate Information

9. Average Tax Per EmployeeState Comparisons

10. Reimbursable (Self-Insured) Employers • All state agencies, many political subdivisions, and many 501c3 non-profit organizations • Do not pay quarter taxes like tax-paying employers, but still file quarterly. • Pay quarterly bill pro-rated based on employer’s reported wage amounts in claimant’s base period.

11. Reimbursable AccountsUnique Features • May not be separating employer but gets charge due to claimant’s base period wages (or alternate base period) • Pays dollar-for-dollar to reimburse Trust Fund for benefits paid on pro-rated basis • If claimant is later disqualified, employer remains responsible for bill until over-paymentis recovered from claimant

12. New Information for 2011 • FUTA - Due to outstanding loans SUTA tax credit is reduced by .3%(5.4% to 5.1%) • FUTA - Effective 7/1/2011 gross FUTA tax is reduced from 6.2% to 6% • Effective November 1, 2011, VEC will no longer accept magnetic media for filing quarterly tax reports • Employers with over 100 employees - must submit payroll by either iFile or Web Upload for 4th qtr. 2011

13. Resources See www.vec.virginia.gov for the following: • The VEC office serving your area • For state UI Tax information - ask to speak to a tax rep • For Benefits information - ask to speak to a supervisor or manager • Virginia Unemployment Compensation Act • Virginia Employers’ Handbook • FAQs - Employer UI Tax Questions • FAQs - Unemployment Benefits

14. Additional Information • Try iFile or Web Upload for a new and improved way to file your VEC and Department of Taxation information:

15. Questions?