Rate Computation
Voluntary Payments
Voluntary payments can be made by eligible employers within 30 days from the date on the face of the annual merit rate notice. If the organization is eligible for a merit rate, has no delinquencies, and is not already at the lowest rate for the calendar year, the organization will be offered an opportunity to buy down the contribution portion of the total premium.
Employer rate reassessments are not subject to voluntary payment offers and changes in the employer’s experience balance can result in the offer being void. This means if the liability on the account is reassessed for any reason, the annual voluntary payment offer will be subject to change and may no longer be valid due to the change in the experience balance of the employer.
Accounts can be reassessed because the employer corrects a prior reporting error, gets a refund of a prior contribution overpayment, is determined to be a successor/predecessor, or is subject to a compliance audit.
If the organization makes the voluntary payment, the reduction to the surcharge amount will automatically be applied.
In ESS, the payment screen will show the voluntary payment offer as a selectable option during the valid payment period. The amount due for a voluntary payment displays as zero and can be edited by the employer. Please be very careful in using the voluntary payment option as E S S will allow an employer to pay less than the minimum offer amount required to trigger a rate change. Once submitted, the voluntary payment is not refundable in full or in part. If the employer pays less than the offer amount shown, the employer will get a voluntary payment failure notice. This means that a voluntary payment was submitted but was insufficient to cause the rate to change. If this happens, the employer is not entitled to a refund of any part of the amount paid and the payment cannot be transferred to any other account or any other liability, existing or future, on the employer’s account.
The E S S payment screen is the only mechanism where an employer without a pre-approved electronic filing waiver can submit a voluntary payment. If an employer has a pre-approved electronic filing waiver, they will be provided with a specific payment mechanism to timely submit a voluntary payment. Other than the exception for electronic filing waivers, the only employer payment that will be accepted as a voluntary payment to buy down the assessed merit rate will be a payment indicated in E S S as a payment in response to the voluntary buy-down offer and completed through E S S.
Employers may pay more than the voluntary payment offer if they wish to increase their experience balance enough to buy down additional levels. The employer is responsible for calculating this additional amount. The offer provided by DWD is sufficient to buy down one level based on the experience balance as of the calculation date. If the experience balance is changed as described above, the offer made by the DWD may be insufficient to buy down the rate.
If the employer’s voluntary payment is dishonored – i.e. returned or refused by the maker’s bank – the employer’s rate will be reverted to the original merit rate assessed and the employer will not be allowed to attempt payment again.
It is not always in the best interest of the employer to make a voluntary payment. Voluntary payments cannot be refunded in full or in part, and only one voluntary payment can be made per year.
Premium Rate Summary
The premium rate is determined based on the solvency of the UI Trust Fund as well as the organization’s individual account status. The fund ratio, which determines the rate schedule, is how the UI Trust Fund solvency is factored into the rate. The credit/debit reserve ratio incorporates the individual account status into the rate.
Many factors affect the premium rate. A rate increase may be the result of employee pay increases or more of the former employees of the organization receiving UI benefits, which decreases the experience account balance. Also, the UI Trust Fund suffers when statewide total benefits paid exceed total premiums collected. As a result, if the UI Trust Fund is not solvent, all employers pay a higher rate to replenish the funds. Please see the next section titled Experience Accounts for more information on how UI Benefits are determined and how the organization’s account is affected.
