Unemployment Insurance Law Summaries
Ohio, Unemployment Insurance Law Summaries
Ohio's unemployment insurance law is located in Chapter 4141, Revised Code, Secs. 4141.01 to 4141.99; and in the Regulations and Rules Under the Ohio Unemployment Compensation Act, Rules 4141-1-01 to 4141-37-13. Full text of Ohio's Unemployment Compensation Act can be found beginning at Unemployment Insurance Reports UI-OH ¶4001 .
DEFINITIONS
“Employer” means the employment of at least one individual for some portion of a day in each of 20 different calendar weeks in either the current or the preceding calendar year, or payment of $1,500 or more in any calendar quarter in either the current or the preceding calendar year (Sec. 4141.01). Generally, an employer who is subject to the federal law is automatically subject to the Ohio law. See COVERAGE, below, for discussions of agricultural and domestic employers and governmental and nonprofit employers who are also subject to the law.
“Employment:” Service performed for wages under any contract of hire, written or oral, express or implied, including service in interstate commerce and service performed by corporation officers (Sec. 4141.01), with exceptions listed below. Service performed by individual for remuneration constitutes “employment” unless and until it is shown that he or she is:
free from control or direction;
performing such service outside usual course of employer's business; and
customarily engaged in independently established business.
Services by certain agent-drivers or commission-drivers and traveling or city salespersons are covered.
Generally, service which is subject to the FUTA is automatically subject to the Ohio law. Exceptions from employment are listed below.
“Wages:” Includes all compensation for personal services, including commissions, bonuses, and cash value of compensation in any medium other than cash (except that in the case of agricultural or domestic service, only cash remuneration is included). Gratuities customarily received in the course of employment from persons other than employer and which are accountable to the employer are taxable wages. The term “wages ” does not include:
Remuneration over $9,000 a year paid to an employee with respect to employment, counting remuneration paid by employer's predecessor and for service in another state. Wage base will be increased if federal taxable wage base is increased to an amount over Ohio's limit.
Other exclusions from wages are listed below.
COVERAGE
Generally, service which is subject to the FUTA is automatically subject to the Ohio law. Exceptions from coverage are listed at below.
Agricultural and domestic employers.- Agricultural labor is covered if performed for an employer who employed 10 or more workers in such labor in each of 20 weeks in the current or preceding calendar year or paid cash remuneration of $20,000 or more for such service in any quarter of the current or preceding calendar year. When agricultural labor is supplied by a crew leader, the employing unit for which the services are performed is the employer of the crew members unless the crew leader is registered under the Farm Labor Contractor Registration Act of 1963, or substantially all of the crew members operate or maintain mechanized equipment that is provided by the crew leader. In either of these instances, the crew leader is the employer.
Domestic service.- Domestic service in a private home, local college club or local chapter of a college fraternity or sorority is covered if performed for an employing unit that paid wages of $1,000 or more for such service in any quarter of the current or preceding calendar year.
Government and nonprofit employers.- Coverage is required for nonprofit organizations which are exempt from income tax and which have four or more individuals in employment for some portion of a day in each of 20 different calendar weeks in either the current or preceding calendar year. Coverage is also mandatory for services performed for the state and its political subdivisions. Other government services are not covered.
The following services are covered when performed for a nonprofit organization or a hospital or institution of higher education operated by the state or a political subdivision:
Insurance agent or insurance solicitor paid solely by way of commission.
Homeworker.
Service for an organization exempt from income tax if the service does not exceed $50 in a calendar quarter, is in connection with the collection of dues for a fraternal beneficial society and is performed away from the home office or is ritualistic service.
Service not in the course of employer's trade or business.
Service for a voluntary employees' beneficial association if membership is limited to officers and employees of a municipal corporation, a political subdivision of the state, or of the United States.
Nonprofit organizations may finance the payment of benefits by the regular contributions or the reimbursement methods. The state, its instrumentalities and political subdivisions use the reimbursement financing method unless an election is made to pay contributions. Employers who use the reimbursement financing method are required to make payments equal to the full amount of regular benefits plus 50% (100% for governmental entities) of extended benefits paid to claimants. Employers using reimbursement financing may request to make payments in equal installments throughout the year, an adjustment being made at the end of the year to take care of any excess or shortage in payments.
Surety bond or deposit of approved municipal or other bonds is required for nonprofit organizations electing reimbursement financing. Nonprofit organizations that formerly made reimbursement payments pay 3.0% until eligible for a rate.
EXCEPTIONS
Wages.- The term “wages” does not include:
Remuneration over $9,000 a year paid to an employee with respect to employment, counting remuneration paid by employer's predecessor and for service in another state. Wage base will be increased if federal taxable wage base is increased to an amount over Ohio's limit.
Payments defined in Sec. 3306(b)(2)-(16) of the Federal Unemployment Tax Act, i.e., payments for insurance or annuities, sickness or accident disability payments under a workers' compensation law, medical or hospitalization expenses, payments for death, sickness or accident disability payments made after the expiration of six months after the last month in which the employee worked, certain simplified employee pension payments, cafeteria plan payments, etc.
Payments of employees' FICA tax without deduction from wages.
Employment.- The term “employment” does not include the following:
Service not in the course of employer's business (includes incidental service performed by an officer, appraiser, or member of a finance committee of a bank, building and loan association, savings and loan association, or savings association when the remuneration for the service, exclusive of the amount paid or allotted for director's fees, does not exceed $60 per calendar quarter). Short-time work of not more than four weeks' duration may be exempted by special permission.
Home workers (unless performed for a nonprofit organization or a hospital or institution of higher education operated by the state or a political subdivision).
Insurance agents paid solely on commission basis.
Service by individuals paid on a commission basis who are masters of their own time and efforts and whose remuneration depends on the amount of effort expended, provided such service is not subject to the FUTA.
Newspaper and shopping news carriers under age of 18.
Organizations exempt from income tax, with respect to service performed in calendar quarter if (a) remuneration does not exceed $50 in any calendar quarter, or (b) it is in connection with collection of dues or premiums for a fraternal beneficiary society and is performed away from home office, or is ritualistic service.
Railroad employees covered by Railroad Unemployment Insurance Act.
Relatives, i.e., services by individual in employ of son, daughter, or spouse, or by child under 18 in employ of parent.
Services covered by federal unemployment compensation system.
Service for a school, college or university by a student in regular attendance.
Service by a student enrolled at a nonprofit or public educational institution in a full-time work study program. This exemption is not applicable to service performed in a program established for an employer or group of employers.
Service for a hospital by a patient of the hospital, and service by an inmate for a custodial institution.
Student nurses and interns.
Certain employees of a voluntary employees' beneficial association.
Service as a member of a band or orchestra provided such service is not the principal occupation of such individual and is not subject to the FUTA.
Service for a day camp whose season does not exceed 12 weeks in a year, provided such service is not subject to the FUTA.
Agricultural and domestic employers.- Services performed prior to 1/1/80 by certain aliens are excluded.
Government and nonprofit employers.- Coverage is required for nonprofit organizations which are exempt from income tax and which have four or more individuals in employment for some portion of a day in each of 20 different calendar weeks in either the current or preceding calendar year. Coverage is also mandatory for services performed for the state and its political subdivisions. Other government services are not covered.
The following services for a nonprofit organization are not covered (exempt services listed above are also not covered):
Church, or organization operated primarily for religious purposes and which is controlled by a church.
Religious duties of a minister or member of a religious order.
Patients performing services in a rehabilitation facility or sheltered workshop.
Services for an elementary or secondary school that is operated primarily for religious purposes, is a nonprofit organization, and is exempt from federal income tax.
The following services for the state or a political subdivision are not covered:
Publicly elected officials.
Members of a legislative body or the judiciary.
Employees (not in the classified service) serving on a temporary basis in case of fire, storm, snow, earthquake, flood or similar emergency.
Service in major nontenured policymaking or advisory positions.
Service for a nonprofit organization, a state hospital or state institution of higher education, or a political subdivision by an individual receiving unemployment work-relief or work-training under a program financed by a federal agency or an agency of a state or political subdivision thereof is exempt from coverage.
Election officials or workers earning less than $1,000.
Services by persons committed to penal institutions.
PROCEDURES
Base period.- First four of last five completed calendar quarters immediately preceding first day of individual's benefit year; however, if an individual does not have sufficient qualifying weeks and wages in the base period to qualify for benefit rights, the base period will be the four most recently completed quarters preceding the first day of his or her benefit year. No calendar quarter in a base period or alternate base period may be used to establish a subsequent benefit year (Sec. 4141.01).
Benefit year.- 52-week period beginning with first day of week with respect to which first valid application for determination of benefit rights is filed, and thereafter the 52-week period beginning with the first day of the week with respect to which the next valid application is filed after the termination of the last preceding benefit year, subject to requalifying provisions of law (Sec. 4141.01).
Weekly benefit amount.- Determined by claimant's average weekly wage and number of dependents. Maximums will be adjusted based on the statewide average weekly wage. Any percentage increase in the statewide average weekly wage between the wage computed for the current year and the wage computed for the preceding year will be used to increase the maximum weekly amounts by the same percentage.
The maximums for the three dependency classes may not exceed 50% of the statewide average weekly wage for claimants with no dependents, 60% of the statewide average weekly wage for claimants with one or two dependents, and 66
% of the statewide average weekly wage for claimants with three or more dependents. Maximums for year beginning 1/1/2009 are $372, $452, and $503, depending on number of dependents. Partial benefit is weekly benefit amount less remuneration in excess of 20% of weekly benefit amount, rounded to next-lower even dollar.
Maximum total benefits.- Lesser of
26 times weekly benefit amount or
an amount computed by taking the sum of 20 times the weekly benefit amount for first 20 base period qualifying weeks, plus one times weekly benefit amount for each additional qualifying week, beyond the first 20 qualifying weeks in the base period.
In addition, during certain periods of high unemployment, payment of extended benefits at a claimant's weekly benefit amount.
Benefit eligibility: Requirements.-
be unemployed (i.e., “partially” or “totally ” unemployed, or, prior to filing of application, separation from most recent work for any reason that terminated employer-employee relationship, or laid off indefinitely of for seven or more days);
have 20 qualifying weeks employment in base period and remuneration in each of such weeks equal to at least 27.5% of the statewide average weekly wage;
serve one-week waiting period;
be able to work, available for work, and actively seeking suitable work either in a locality where claimant earned base period wages or in a locality where suitable work is normally performed (seeking work requirement may be waived in certain cases);
be unable to obtain suitable work.
Vocational trainees are considered to meet the ability-to-work, availability-to-work, and search-for-work requirements. An individual who becomes unemployed while attending school and whose base period qualifying weeks were earned in whole or in part while attending school meets the availability and active-search-for-work requirements if he or she makes him-or herself available for suitable work on any shift.
Benefits may not be paid to instructors, researchers or principal administrators of an institution of higher education, a nonprofit or parochial school or a public school board or school operated by a county board of mental retardation during school vacation periods and paid sabbatical leaves based on service with such institutions.
Benefits are not payable to nonprofessional employees of educational institutions or institutions of higher education during periods between school years or terms if there is reasonable assurance of reemployment in the second year or term. If reasonable assurance is given and no work is offered in the second year or term, retroactive payments of benefits may be claimed.
Benefits are not payable during periods between academic years or terms (if there is a contract or reasonable assurance of reemployment in the second year or term) on the basis of services in any capacity for an educational institution to an individual who performed such services while in the employ of an educational service agency.
Benefits are not payable to an alien unless he or she has been lawfully admitted for permanent residence or is otherwise permanently residing in the United States under color of law.
Benefits are not payable to a professional athlete for periods between sport seasons if there is a reasonable assurance that he or she will perform services in both seasons.
Disqualifications Period.-
Quitting without just cause, or discharge for just cause in connection with work, except under certain circumstances where quitting is due to recall or to accept other employment, or, where separation is due to labor contract or employer policy permitting employee, because of lack of work, to leave,
refusal without good cause to accept suitable work or refusal to investigate referral to such work (disqualification does not apply to “vocational trainees,” or, when work is offered by employer and employee is not required to accept the offer pursuant to labor contract or employer policy),
knowingly falsifying claim,
commitment to correctional institution, and
became unemployed because of dishonesty in connection with any base period work
-duration of the unemployment and remuneration earned excluded from total base period remuneration and qualifying weeks that otherwise would be credited to the individual for the work not credited.
Quitting to marry or because of marital, filial or other domestic obligation-until the claimant has become reemployed in subject employment and has earned wages equal to
of his or her average weekly wage, or $60, whichever is less.
Disciplinary layoff for misconduct connected with work, or labor dispute (other than a lockout) at any factory, etc., in Ohio or any other state, owned or operated by the claimant's last employer, unless prior to the dispute, individual is laid off for indefinite period or separated by employer, or he or she obtained employment with another bona fide employer while dispute was still in progress-term of dispute or layoff. In certain cases, labor dispute disqualification is not applicable to individual whose employer is not involved in dispute, but whose place of business is located within same premises as employer engaged in dispute.
Benefits are reduced by:
All remuneration in lieu of notice,
all compensation for temporary partial disability or wage loss under a workers' compensation law,
any governmental or other pension, retirement or retired pay, annuity or other similar periodic payment that is based on the individual's previous work,
all separation or termination pay, and
all vacation pay or allowance payable under contract of hire and allocated to designated weeks.
Benefits are not reduced by supplemental unemployment benefit payments, national guard or armed forces reserve payments for attending drills or meetings, any disability pension, allowance or payment paid to former members of the Armed Forces of the United States that is based on the nature and extent of the disability rather than a prior period of employment or service, payments made under the National Defense Authorization Act for Fiscal Years 1992 and 1993 in the form of voluntary separation payments and special separation pay, or contributions to social security under the Social Security Act. Benefits may not be paid to individuals seeking or receiving unemployment benefits under any federal law, or under the law of any other state.
WHAT THE EMPLOYER MUST DO
Pay the standard rate.- Maximum possible basic rate is 9.0%. No employee tax.
Experience rates.- Until it becomes qualified for experience rating, a new employer will pay the average contribution rate computed for its industry or 2.7%, whichever is greater.
For 2009, new employers in the construction industry pay a rate of 5.8%. All other new employers pay a contribution rate of 2.7%.
To be eligible for experience rating, the employer's account must have been chargeable with benefits throughout the four consecutive calendar quarters ending on the June 30 preceding the computation date (July 1). Its actual rate depends on whether its account shows a positive or a negative balance (taking into consideration benefits chargeable to it as opposed to the contributions exclusive of mutualized contributions it has paid), and on the balance in the state fund as of the computation date and its relationship to the 12-month period of highest benefit cost. Depending on whether the fund is above or below a “minimum safe level,” rates in the basic rate schedule are decreased or increased.
For 2009, the schedule of basic rates ranges from 6.7% to 9.0% for negative-balance employers, and from 0.3% to 6.5% for positive-balance employers.
The law also provides for a “mutualized tax” payable by all employers (employers not eligible for an experience rate do not pay this tax), but not credited to their accounts. Whether or not such a tax applies for a given calendar year depends on the status on the computation date of the mutualized fund, to which, among other things, the remains of closed-out employer accounts are credited or debited, the mutualized tax is paid, and otherwise unchargeable benefit payments are charged. The increase in rates resulting from the mutualized tax may not exceed 0.5%, and may not be less than 0.1% when there are any excess charges in the mutualized account.
Depending on whether the fund is above or below a “minimum safe level,” rates in the basic rate schedule are decreased or increased. The increase may range from .0025% to 0.2%, plus, in each case, an extra percentage increase calculated by multiplying the flat rate increase required by three and dividing that product by 1.9%, and multiplying each employer's basic rate by the resulting quotient and rounding to the nearest 0.1%. Decreases in rates due to the minimum safe level of the fund are 0.1% or 0.2%, depending on the exact level.
If any of the increases in basic rates due to the fund being below the minimum safe level is in effect, the increase remains in effect for the calendar year in which it was imposed and for each year thereafter until it is determined that the minimum safe level has again been met.
If an employer's account shows a negative balance in excess of certain percentages of its average annual payroll, then before its rate is computed for the next year, an amount equal to the amount of the excess may, under certain circumstances, be transferred from its account to the mutualized account. No transfer will be made unless the employer's account has shown a positive balance for at least two consecutive computation dates prior to the computation date with respect to which the transfer is proposed.
If an employer has not timely furnished the necessary wage information, its contribution rate is 125% of the maximum rate provided for the year unless the necessary information is filed by December 31 of the year preceding the rate year. If an employer files wage information after December 31 but within 36 months from the beginning of the year for which the rate is to be effective, the rate must be modified to 120% of the rate that would have applied if the employer had timely provided the wage information.
For 2008, rates may be determined from the following schedule. The mutualized tax for 2009 is 0.4%.
Percent of
Balance
Positive
|
Total
2009
Rate (%)
|
2009
Mutual
Rate (%)
|
|---|
14.00 or more
|
0.3
|
0.4
|
13.0-13.99
|
0.5
|
0.4
|
12.5-12.99
|
0.6
|
0.4
|
12.0-12.49
|
0.7
|
0.4
|
11.5-11.99
|
0.9
|
0.4
|
11.0-11.49
|
1.0
|
0.4
|
10.5-10.99
|
1.1
|
0.4
|
10.0-10.49
|
1.4
|
0.4
|
9.5-9.99
|
1.6
|
0.4
|
9.0-9.49
|
1.7
|
0.4
|
8.5-8.99
|
2.0
|
0.4
|
8.0-8.49
|
2.1
|
0.4
|
7.5-7.99
|
2.4
|
0.4
|
7.0-7.49
|
2.6
|
0.4
|
6.5-6.99
|
2.9
|
0.4
|
6.0-6.49
|
3.2
|
0.4
|
5.5-5.99
|
3.6
|
0.4
|
5.0-5.49
|
4.0
|
0.4
|
4.5-4.99
|
4.2
|
0.4
|
4.0-4.49
|
4.6
|
0.4
|
3.5-3.99
|
5.1
|
0.2
|
3.0-3.49
|
5.3
|
0.4
|
2.5-2.99
|
5.6
|
0.4
|
2.0-2.49
|
6.0
|
0.4
|
1.5-1.99
|
6.3
|
0.4
|
1.0-1.49
|
6.4
|
0.4
|
0.0-0.99
|
6.5
|
0.4
|
|
Negative
|
|---|
0.01-0.99
|
6.7
|
0.4
|
1.0-1.99
|
6.8
|
0.4
|
2.0-2.99
|
7.1
|
0.4
|
3.0-3.99
|
7.4
|
0.4
|
4.0-4.99
|
7.6
|
0.4
|
5.0-8.99
|
7.9
|
0.4
|
9.0-10.99
|
8.2
|
0.4
|
11.0-12.99
|
8.3
|
0.4
|
13.0-14.99
|
8.4
|
0.4
|
15.0-16.99
|
8.6
|
0.4
|
17.0-18.99
|
8.7
|
0.4
|
19.0-19.99
|
8.8
|
0.4
|
20.0 or more
|
9.0
|
0.4
|
|
|
|
Law allows construction contractors to pass on certain increased UI taxes (i.e., those due to an increase in the wage base, an increase in the mutualized rate, or a revision in the rate schedule) to the contractee.
Special payroll tax (for Disabled Workers' Relief Fund) to be determined annually for state fund employers for each classification in the same manner that rates are determined for each classification for premiums for the state insurance fund. A self-insured employer will reimburse the Department for DWRF payments made in claims in which it is the employer of record, without regard to the date the employer was granted the privilege of paying compensation directly. Self-insured employers are billed on a semi-annual basis for DWRF payments.
Voluntary payments.- Permitted if paid by December 31.
DEADLINES
Tax and wage.- Contributory employers must file both Employer's Report of Wages and the Employer's Contribution Report, Form JFS-66111. Reimbursing employers (nonprofit and public employers) must file Employer's Report of Wages and the Employer's Quarterly Payroll Report, Form JFS-66112. Reports are due quarterly on or before last day of following month. In Ohio, the postmark date is considered the date of filing. If a due date falls on a Saturday, Sunday, or holiday, the report must be postmarked by the next business day. Magnetic media, online, and interactive voice response filing are available.
ENFORCEMENT
Beginning July 1, 2000, the functions of the Bureau of Employment Services are transferred to the Department of Job and Family Services or the Department of Commerce, and their directors, as appropriate.
The Director may, upon the recommendation of the Attorney General, cancel a claim for delinquent contributions, payments in lieu of contributions, interest, forfeitures, or fines where investigation reveals such claim to be uncollectible.
If an employer fails to pay its contributions within 10 days after receiving notice from the Director as to the amount due, then the Director will certify such amount to the Attorney General, who will institute a civil suit in the name of the state for the collection of the contributions and interest due. The answer or demurrer must be filed within 10 days, the reply or demurrer to the answer within 20 days, and the demurrer to the reply within 30 days after the return day of the summons or service by publication. Any interested party may enjoin the further operation of an employer who has failed to pay the contributions.
The court shall, at the time of the filing of the petition, and without notice, appoint a receiver for the delinquent employer's property or business, unless such employer has executed a bond to the state, in double the amount due, with sureties to the approval of the Director. If the employer is found to be subject to the Act, judgment shall be rendered against the employer, which judgment shall be given the same preference as is allowed by law to judgments rendered for claims for taxes.
A default in the payment of contributions which is of less than sixty days' duration may be waived where good cause is shown.
Note that all of the remedies and collection procedures available to enforce payment of contributions, interest, or penalties are applicable to enforcement of payments in lieu of contributions, interest and penalties.
Assessment of contributions may not be made after four years from the date on which such contributions become payable, and no court action for collection without assessment may be begun after five years, except that in case of a false or fraudulent report or attempt to evade contributions, assessment may be made or court proceedings without assessment may be begun at any time.
If any claims for delinquent contributions, interest or penalties are found by the Attorney General to be uncollectible, the Director may cancel such claims upon recommendation of the Attorney General.
WHO TO CONTACT
The Ohio Unemployment Compensation Act is administered by the Director of the Department of Job and Family Services, 145 S. Front Street, P.O. Box 1618, Columbus, Ohio 43216-1618. Telephone (614) 466-4348.
RECORDKEEPING
Regardless of whether or not an employer is subject to Ohio's unemployment compensation law, it is required to keep an accurate record of the hours worked and the amount of wages paid to each of its employees. Such records must be open to inspection by the Director at any reasonable time (Sec. 4141.18), and they must be preserved by the employer for a period of not less than five years.
POSTING
See ¶36-9900 .
PENALTIES
Interest and penalties.- Any overdue contribution, payment in lieu of contribution, interest, forfeiture, or fine due from an employer bears interest at the annual rate of 14%, compounded monthly on the aggregate receivable balance due. In any such computation, any fraction of a month is considered to be a full month. Interest may be waived, if within 30 days after the Director mails or delivers the notice of assessment of interest, the employer provides a written request for waiver demonstrating good cause for failure to pay amounts due, furnishes all quarterly reports required by law, and pays in full all amounts due. A default in the payment of contributions that is of less than 60 days' duration may, however, for good cause shown, be waived by the Director.
An employer who fails or refuses to give any information that the Director within his or her authority may require is liable to a penalty of $500. Failure on the part of any employer to file a contribution or wage report on the due date subjects that employer to a forfeiture of .25% of the total remuneration paid, but not less than $30 or more than $500 per report.
Employers who finance payments by the reimbursement method and whose payments are past due are subject to the same interest rates, penalties, and collection procedures applicable to employers whose contributions are past due.
Contributions due shall have the same priority as now provided by law for the payment of taxes due the state in the event of the distribution of an employer's assets pursuant to a court order.
Judgments for contributions rendered against an employer are to be given the same preference as the Act allows to judgments rendered for claims for taxes.
Liens.- Contributions, interest or penalties which are not paid when due become a lien upon the real and personal property of the employer. Such a lien shall not be valid against the claim of any mortgagee, pledgee, purchaser, judgment creditor or other lien holder of record at the time the notice of lien is filed.
<p>Liens.— Contributions, interest or penalties which are not paid when due become a lien upon the real and personal property of the employer.</p>