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WAC 192-320-025

How are unemployment insurance tax rates determined for new employers? (RCW 50.29.025.)

(1) Beginning in rate year 2008, unemployment insurance tax rates for new employers shall be based on the history factor of new employers over the last three fiscal years applied to the experience tax and the social cost factor tax for each industry. The history factor shall be ninety percent, one hundred percent, or one hundred fifteen percent, based on the experience of new employers over the last three years, and shall be calculated under RCW 50.29.025.
(2) As used in this section:
(a) "NAICS" is an abbreviation for North American Industry Classification System;
(b) "Industry average array calculation factor rate" means the average experience-based tax rate for a particular industry. When multiplied by the history factor, it will be referred to as the "experience tax."
(c) "Industry average social cost factor rate" means the average social tax rate for a particular industry. When multiplied by the history factor, it will be referred to as the "social cost factor tax."
(d) "History factor" shall be ninety percent, one hundred percent, or one hundred fifteen percent, depending on the ratio of benefits charged and contributions paid in the last three fiscal years by employers who were not considered a "qualified employer" under WAC 192-320-030 or were not delinquent on taxes under WAC 192-320-035. It shall be computed annually and is not limited to a particular industry.
(3) When calculating the experience tax and social cost factor tax, the department will use the first four digits of the NAICS code of the industry being calculated.
(4) Experience tax.
(a) The department will calculate the experience tax as follows:
(i) A table will be prepared that contains each of the forty rate classes;
(ii) For each rate class, the department will multiply, total, and display the taxable payrolls for all qualified employers assigned to that rate class with the NAICS code being calculated, by the percentage assigned to that rate class;
(iii) The department will total the tax rates for the forty industry rate classes and divide the sum by the total of all payrolls used in the calculation; and
(iv) The department will multiply the result by the history factor for that year, and show the final amount as a percentage rounded to two decimal places.
(b) The experience tax must be at least 1.00 percent and not more than 5.4 percent.
(5) Social cost factor tax.
(a) The department will calculate the social cost factor tax as follows:
(i) The experience tax table will show the percentage of the social cost factor tax assigned to each of the forty rate classes;
(ii) The department will multiply, total, and display the total payroll in each industry rate class by the percentage of social cost factor tax assigned to that rate class;
(iii) The department will total the social cost factor tax rate for the forty industry rate classes and divide the sum by the total of all payrolls used in the calculation; and
(iv) The department will multiply the result by the history factor for that year, and show the final amount as a percentage rounded to two decimal places.
(b) The social cost factor tax for an industry cannot be higher than the percentage of social cost factor tax assigned to rate class forty.
(6) If there are no qualified employers in the four-digit level of the NAICS code, the department will calculate the rates using the corresponding three-digit level and assign the result to the four-digit level. If there are no qualified employers in the three-digit level, the department will calculate the rates using the corresponding two-digit level and assign the result to both the three-digit and four-digit levels.
[Statutory Authority: RCW 50.12.010 and 50.12.040. WSR 07-23-127, ยง 192-320-025, filed 11/21/07, effective 1/1/08.]
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