Glossary
Balance (experience account) – The net amount of funds attributed to the employer and all predecessors of the employer (if any). DWD adds in all of the contributions received including voluntary payments and subtracts out all of the benefits paid, refunds issued, and mutualized benefit charges distributed to determine the employer’s current account balance. This amount can be positive or negative and represents the employer’s historical usage of the unemployment system. This is not a balance due and does not represent a financial liability to the employer.
Base Period – The four consecutive calendar quarters used in determining an individual’s eligibility for UI benefits. This period is the first four quarters of the last five complete calendar quarters directly before the week an individual files a UI claim.
Benefit Year – The 52-week period UI benefits can be claimed. The benefit year begins the week an individual files a UI claim.
Calendar Quarter – Three-month period ending March 31st, June 30th, September 30th or December 31st.
Computation Date – June 30th of the year immediately prior to the year for which a merit rate is effective.
Contributions– Mandatory unemployment insurance premiums. They are paid quarterly by contributory employers.
Covered Employer – Employer subject to the Unemployment Insurance program. (See SUTA, FUTA, DWD guidelines.)
Credit reserve balance -Their state UI premiums paid exceed benefits charged to their account. They have a positive experience balance.
Debit reserve balance -UI benefits charged to their account exceed state UI premiums paid into their account. They have a negative experience balance.
Due Date – The last day of the calendar month immediately following the last day of the calendar quarter. It is the employer’s responsibility to give themselves enough time to report and pay timely. It is a good idea to report early even if the employer is waiting until the due date to make a payment. DWD will assess penalties (10%) and interest (1%) if the employer does not pay by the designated due date. See the table below for information on quarters and due dates.
DWD – Indiana Department of Workforce Development (Agency).
EDI – Electronic Data Interchange wherein payments are remitted to DWD and accompanied by a distribution file or addenda record.
Employed on the twelfth (12th) day of the month –If the worker is performing services or is being compensated during a pay period containing the 12th day, then the worker is employed on the twelfth (12th) day of the month. This includes both full-time and part-time workers who worked or received wages subject to unemployment during the pay period. The count should be unduplicated, so if the worker is being reported under the same SUTA but for multiple locations, be sure to indicate “Yes” only one time per worker.
Employer – An entity that pays covered wages to individuals. Employers are subject to the Unemployment Insurance program. See subsection Business Types for more information.
Employing unit – An individual or organization that has one or more workers receiving compensation for services in Indiana. This includes all types of entities such as: individuals; partnerships; associations; joint ventures; estates; joint trust companies; receivers; insurance companies; limited liability companies, and corporations.
Enjoin – A court order that forces an individual or entity to comply with the order by performing a specific action or ceasing an action.
Federal Employer Identification Number (F E I N) –The number that the employer will use to identify the entity that they will use when reporting the worker’s wages on their W2 or 1099.
Full Time / Part Time / Seasonal – If the employer has a seasonal code approved by DWD for the person being reported, then use that 2-digit code (01 – 99). See the employer handbook for information on applying for seasonal status if the business operates less than 26 weeks each calendar year or has functionally distinct operations less than 26 weeks total each calendar year. Seasonal codes are for a specific range of dates provided by the employer on the seasonal application. If the employee is not seasonal, use Full Time (FT) or Part Time (PT) as defined by your industry standards (if any). There is no DWD definition of Full or Part time – this is an employer defined designation.
NOTE: Only DWD can assign seasonal status.
FUTA – Federal Unemployment Tax Act. The law that regulates the federal portion of the Unemployment Insurance program.
Gross Misconduct – Includes any of the following committed in connection with work, as determined by the department by a preponderance of the evidence: 1. Felony 2. Class A misdemeanor 3. Working, or reporting for work, in a state of intoxication caused by the individual's use of alcohol or a controlled substance (as defined in IC 35- 48-1-9), or consuming alcohol or a controlled substance (as defined in IC 35-48-1-9) on the employer's premises without employer permission 4. Battery on another individual while on the employer's property or during working hours 5. Theft or embezzlement. 6. Fraud.
Independent Contractors – For the purposes of Unemployment. Any worker that passes the 3 tests on page 11 of the Employer Guide.
Initial Claim – The first application (claim) for UI benefits made by an individual. This process determines if the individual is eligible for benefits.
Lien – Issued simultaneously with a tax warrant for unpaid assessments, which can allow a creditor to sell property to satisfy debts owed
Location – A location is a unique combination of SUTA, F E I N, Primary Zip code, and Full Time / Part Time / Seasonal.
Merit Rate – The rate employers qualify for, based on experience, when they no longer are considered new employers and are not subject to the delinquent rate. Merit rates are computed based on the past 36 months wages and the organization’s account status as of each June 30th.
Mutualized Benefit Charges (MBC) – Each year, all benefit charges that are relieved from employer accounts in the prior calendar year are totaled and charged proportionally to all premium-paying employers. DWD determines the company’s portion of the MBC by dividing the taxable wages by all taxable wages reported to the state for the prior calendar year. Any excess surcharge is used to reduce the amount of charges distributed.
Notice and Demand – Notice of unpaid assessment issued to an employer
Penalties – DWD will assess employers a $25 penalty for each missing or inadequate report and a 10% penalty on unpaid contributions.
Quarter – A consecutive three-month calendar period in each calendar year where January – March is the first quarter, April – June is the second quarter, July – September it’s the third quarter, and October – December is the fourth quarter.
Reimbursable employer – An employer that directly reimburses the UI Trust Fund for all UI benefits paid and is invoiced for benefits charged on a monthly basis. They are required to file a wage report quarterly, like a contributory employer, but do not pay a tax assessment from an assigned merit rate. Currently, only governmental entities and not-for-profits with a 501(c)(3) designation from the IRS can elect reimbursable status.
Remuneration – Compensation or something of value provided to an individual in exchange for services performed.
Responsible party-The individual or entity which controls, manages, or directs the employer and the dispositions of its funds or assets. The responsible party information can be used to assess financial liability (a tax lien or tax warrant) as a personal liability to the named individual.
Social Security Number (SSN) or Individual Tax Identification Number (I T I N) –The number that the employer will use to identify the worker when reporting the worker’s wages.
When reporting wages to Indiana, the worker can be reported more than one time per SUTA, but only one time per F E I N / Zip / employment type combination.
NOTE: Please be aware that some employers are required to use E-Verify and secure the SSN of a worker. All employers can be required to repay UI Benefits if they knowingly employ a worker who is not authorized to work in the United States. The Act provides protection against civil penalties if the employer has used E- Verify to validate the SSN provided by the worker.
Sole Proprietorship- A business in which a single entity owns the business and the owner and the business are legally considered to be the same entity. A Sole Proprietorship would file a Schedule C.
Special Charges / Surcharge – Additional amount assessed against an employer’s contribution due that is used to pay interest on advances if the Trust Fund is insolvent and the State has to borrow funds with which to pay UI Benefits.
Standard Occupational Classification (SOC Code or SOC) – The SOC Code system is a federal statistical standard used to classify workers into occupational categories for the purpose of collecting, calculating or disseminating data. Employers can use a job title to find the SOC Code online using this website, HooisersBytheNumbers.
When reporting wages to Indiana manually or via .CSV or ICESA, enter the first six digits of the SOC Code with no dashes for each worker.
Start Date – When the worker began their current employment with the employer. For workers with a gap in employment of sixty (60) days or more, you would use the return date.
NOTE: Employers must report returning workers to the Indiana New Hire and National New Hire registries.
State Unemployment Tax Account Number (SUTA)(sometimes referred to as SUI) –The number that identifies the employer and is assigned by DWD. The number is up to six digits long with leading zeros. If the account number is 1317, the six digits are 001317. Using trailing zeros, for example, 131700, could cause the report to post to another employer’s account. If using an ICESA file, the SUTA number in the E and S rows must be the same.
SUTA – State Unemployment Tax Act. The law that regulates the state portion of the Unemployment Insurance program.
SUTA DUMPING- a form of tax avoidance or tax rate manipulation through which employers create a new employer account and abandon the negative experience on their original account. This results in the original employer dumping higher unemployment taxes by obtaining the lower new employer rate.
Third-Party Administrator (TPA) – An entity or organization designated by the employer to receive correspondence and authorized to speak directly to DWD on their behalf. The designated Third Party Administrator (TPA) will have limited access to your online ESS account to view any employer-related correspondence from DWD.
UI – Unemployment Insurance.
UI Trust Fund - A special fund which is called the unemployment insurance benefit fund consisting of contributions and reimbursements received from employers.
Voluntary payment – An additional payment made by employers. Certain qualifying payments will result in the employer obtaining a lower premium rate.
Wages / Covered Wages – Remuneration given by an employing unit to an individual for services rendered. If not explicitly excluded under the Act, the remuneration is covered wages.
Year –The four-digit (YYYY) calendar year associated to the calendar quarter being reported. This may be shown on the screen as CCYY for century / century / year / year. Even though the due date for the 4th quarter is in the next calendar year, the reporting year is the year when the employer paid the wages.
Zip Code of Primary Work Location – In general, this is the zip code where the worker spends the majority of their time. If the worker routinely travels as a part of their job, it is either where the worker starts from, if they have a base of operations, or where the worker is directed from – like a central office, as long as it is in Indiana. If none of these apply, it can be the zip code where the worker resides if the worker sometimes works in the same state where they live. If none of those locations is in Indiana, the employer may need to report the person to a state or jurisdiction other than Indiana. Call DWD at 800- 891-6499, select the employer option, and ask for help with localization.
