Appendix
What is a PEO?
A Professional Employer Organization (PEO) is a type of Human Resource outsourcing service that helps businesses manage various aspects of their:
- human resources,
- employer taxes,
- employee benefits,
- payroll, and
- other employment-related tasks.
PEO Registration
A PEO must register with DWD specifically as a Professional Employer Organization via State Form 52098. PEOs may operate at Client Level and PEO Level in Indiana. PEO’s that wish to operate at PEO Level must specifically elect this reporting level. State Form 52098s must be received by January 1st of the calendar year in which they become liable. If a PEO fails to register timely for their PEO account, they will be treated as Client Level reporting per IC § 22-4-6.5-9 .
PEO Qualification
A PEO operating at PEO Level qualifies on the first dollar of payroll to any internal employee or to an employee of a client. A PEO operating at Client Level will need a separate SUTA account for the PEO itself only if the PEO has internal employees earning wages localized to Indiana.
PEO Eligibility for Separate Accounts
Commonly owned, managed, or controlled PEO organizations must make one election for all affiliated PEO organizations and may maintain only one PEO level account.
PEOs and Experience Balance Transfers
Employers joining PEO Level PEOs will be treated as predecessor employers. There will be an experience balance transfer of an indexed client into a PEO Level PEO. Joining a PEO Level PEO can cause an employer to lose a great amount of their experience balance.
Employers leaving PEO Level PEOs will be treated as successor employers. If the former PEO client employer continues payroll in Indiana after the termination of their co-employment agreement, there will be an experience balance transfer from the PEO Level PEO to the successor employer. The department may establish a new SUTA account for a former client, if they have never had one, or if their prior SUTA account is terminated. The employer will inherit the PEO Level PEO’s merit rate for the year during which the transferred occurred and will have a blended rate the following year.
If an employer leaves a PEO Level PEO, and does not continue payroll in Indiana, no experience balance transfer will be held. The department will not hold experience balance transfers when an employer leaves one PEO Level PEO and immediately joins another PEO Level PEO.
The department will not hold experience balance transfers when an employer joins or leaves a Client Level PEO, as long as the employer is not leaving a PEO Level PEO or immediately joining a PEO Level PEO.
PEO Reporting Requirements:
- PEOs must file all quarterly reports in accordance with IC 22-4-10-1.
- PEOs must register their PEO via State Form 52098.
- PEOs must report all client addition and deletions via State Form 52099. These forms are to be emailed to ProEmployerClearance@dwd.in.gov or faxed to 317-233-6208. Only the PEO is to fill out and submit a SF52099.
- Client Deletions must be reported within 15 days of the client termination.
- Client Additions must be reported within 15 days after the end of the quarter that the agreement became effective.
- PEOs are required to maintain and update their contact information on their accounts.
- The Department will not remove a client from a PEO until the PEO has filed and paid all outstanding liabilities.
- Timely filing of the addition notice to DWD will assure that the account transferred to the PEO is fully processed and the PEO account is updated as required in time for the first quarter in which the PEO will have reporting and / or payment responsibility.
Late filing an addition for a PEO level PEO can result in extremely adverse consequences such as retroactive merit rate increases and the related increase in contributions due for a prior quarter. This, in turn, creates a new assessment of penalty and interest for underpayment of contribution by the PEO. Such retroactive assessments have virtually no time limit as a PEO having elected PEO level reporting has asserted that they know the reporting requirement. There is no statute of limitations where the employer knows that they have an unfulfilled duty to report.
Depending on the election of the PEO, the client may face serious financial ramifications when exiting a PEO if the PEO has not filed all reports as required or has failed to pay all assessments in full.
Separating and Base Period Employer Notice
When individuals file an initial claim for benefits, their last employer and all of their base period employers are notified and asked to verify the reason for the claimant’s unemployment. This notifies the organization that its experience account may be charged.
Use state form 640P to protest a claimant’s eligibility for benefits. The information the organization provides on this form could affect the claimant’s eligibility or any charges to the employer’s experience account for benefits paid. Form 640P is available online at unemployment.IN.gov.
If an organization has a complete transfer held, base period separation notices with regard to UI filings by employees of the predecessor will be sent. These notices are required so that the organization is aware of potential charges against the transferred experience balance. The organization is not required to respond to the notice, unless it has direct knowledge of the separation.
To prevent benefits from being paid in error, the organization must respond electronically, or submit Form 640P, if they believe that person is unemployed due to:
- Quitting voluntarily or being absent for unknown reasons.
- Discharge for just cause.
- Discharge for gross misconduct.
- Not being entitled to ANY pay or benefits from the organization.
- Being ineligible for any reason listed in this guide.
Do not notify DWD if the employee was laid-off, unless the organization believes that person is ineligible for a reason listed in this guide.
Protest form 640P should be faxed to DWD at (317) 633-7206, if possible.
Protests may also be submitted by mail to:
Indiana Department of Workforce Development
Attn: UI Claims Adjudication Center
10N. Senate Ave., RM SE 113
Indianapolis, IN 46204-2277
Reading and responding to the Base Period Separation Notice (SF52984)
Each color-coded section of the sample notice is explained below.
Color Explanation TableBlue- Mailing date, starts the clock on the employer’s timeliness. Employers have fifteen days from the mailing date of the notice, plus three days for mail delivery, to submit a SF54244 / 640P . Do not write a response on the Base Period Separation Notice SF52984 / 640R. Green - Employer Account Number is six (6) digits or less, it is a SUTA number and the entity the form is addressed to exists in ESS. If the Employer Account Number is eight (8) digits, it is a party ID. The entity does not exist in ESS and the claimant added a mailing address to receive the separation notice. This does not mean that DWD has determined that the entity added by the claimant is an employer or has liability for Indiana Unemployment contributions. Orange - Notice Type, if INITIAL and the employer wants to protest the claimant receiving benefits, the employer should submit the 640P within 15 days of the mailing date of the notice. If the Notice Type is “reopen,” do not submit a 640P. Pink - Claimant’s name and partial SSN, if these do not match the employer’s records, before submitting a 640P, check your quarterly wage and employment reports for a potential reporting error. SSN keying errors are the number one reason that employers receive notices about claimants that have never worked for them. Grey - ACQ is an acquisition indicator. If the claimant record is marked with an asterisk (*) under ACQ, the worker was employed by a predecessor. Do not submit a 640P for worker that was employed by a predecessor. If the claimant did not work for the employer, and the employer has not made a reporting error, and there is not an * under ACQ, submit the 640P. Yellow – Base Period Ending- Last Day of the final of the 4 quarters of the Base Period. Benefit Year Ending- the last day of the 52-week period UI benefits can be claimed. Lime green - Claim level indicates the type of claim and who pays for the claim. A UI claim is paid for by the base period employers. A PUA or PEUC claim is paid by a Federal program. An EB claim is paid partially by the base period employers and partially by a Federal program. Sky blue - The base period indicator is Yes or No. If “YES”, the employer can be charged. If “NO”, the employer cannot be charged. |
Non-rule Policy Document # 2021-06 Waivers of Increased Unemployment Insurance Contribution Rates
DATE ADOPTED: December 20, 2021. Applicable to all waiver requests for increased unemployment contribution rates imposed under Indiana Code § 22-4-11-2(c) beginning with calendar year 2022 rates.
ADOPTED BY: Department of Workforce Development — Frederick D. Payne, Commissioner
SUPERSEDES: Unemployment Insurance Board Resolution Oct. 21, 2009
NOTICE: Under IC § 4-22-7-7 , this document is required to be published in the Indiana Register and is effective on its date of publication. It shall remain in effect until the date it is superseded or deleted by the publication of a new document in the Indiana Register. The publication of this document will provide the general public with information about the Department's official position concerning a specific issue.
DISCLAIMER: This non-rule policy document is intended to supplement applicable rules and laws. It does not replace applicable rules and laws and, if it conflicts with these rules or laws, the rules or laws shall control. Decisions made under this non-rule policy document are not subject to review unless such review is separately granted by statute.
Overview: To provide guidance regarding waivers of increased unemployment contribution rates imposed for untimely, delinquent, and/or outstanding unemployment insurance reports or liabilities. This guidance supersedes the Unemployment Insurance Board Resolution, dated Oct. 21, 2009.
Background: If an employer fails to timely report or pay its quarterly unemployment insurance liabilities, the Department is required under Indiana Code § 22-4-11-2 to increase the employer’s unemployment contribution rate by 2%. The department may waive the imposition of this increased rate if it finds the employer's failure was for excusable cause.
Policy: Employers are required to pay unemployment insurance contributions in the form and manner required by the Department. Ind. Code § 22-4-29-1 . For each year, the Department determines the contribution rate applicable to each employer. Ind. Code § 22-4-11-2(a) . The rate is increased by 2% “unless all required contributions and wage reports have been filed within thirty-one (31) days following the computation date and all contributions, penalties, and interest due and owing by the employer or the employer's predecessor for periods before and including the computation date have been paid” by
the date specified by the Department. Id. at (c). “The department or the department's designee may waive the imposition of rates under this subsection if the department finds the employer's failure to meet the deadlines was for excusable cause.” Id.
The Department may waive this increased rate only if:
- The employer or the employer’s agent requests the waiver via e-mail to the Agency at DWDESSCommunications@dwd.IN.gov no later than December 31 of the year for which the waiver is being requested.
- The employer has filed an accurate report in the form and manner prescribed by the Department for each quarter the employer was required to file.
- The employer and any predecessors of the employer have no outstanding liability for unemployment insurance contributions, interest, penalties, costs or special charges; and
- The Department determines the failure to timely pay all outstanding contributions, penalties, and interest was due to excusable neglect.
- The Department may find the failure to pay was caused by excusable neglect if the failure was caused by:
- Acts of nature; God; terrorism; or war.
- Death or incapacitation of an owner or preparer.
- Theft, embezzlement, or deceit by a responsible party, fiduciary, or trusted employee.
- ESS unavailable/widespread internet outages (not including employer password issues).
- Administrative errors by employees or agents of the employer.
- Filing in a manner other than that required by the Department while an initial request for an alternative method is pending.
- Error by the Department.
- Reliance on a third-party provider.
This list is not intended to be all inclusive as each request is evaluated on the merits and documentation provided by the employer. Lack of knowledge or understanding of the filing or payment requirements do not meet the standard for waiver approval. The Department may issue a waiver conditioned upon the employer and/or employer’s agent’s adherence to a corrective action plan. Failure to adhere to the corrective action plan may result in recission of the waiver or denial of future waiver requests.
