Created in 1935, the federal-state Unemployment Insurance (UI) program temporarily replaces a portion of wages for workers who have been laid off, provided they are looking and available for work.The UI program is designed so that states have extensive flexibility in determining unemployment benefits. While federal requirements are minimal, ensuring that all states provide basic protection to eligible workers, states are free to choose the level of employer tax, the benefit level and their duration, as well as the eligibility criteria. Understanding UI employee eligibility in Florida and other states where you do business is key to remaining compliant.
Given that there is considerable variation in how states run the UI program, we have created a blog series in order to help readers understand how the system operates in different states as well as the requirements for employer liability and employee eligibility.
Florida Reemployment Tax
In 2012, legislation passed in Florida changed the name of Florida’s Unemployment Compensation Law to the Reemployment Assistance Program Law. Thus, the focus of the program was redirected to helping Florida’s job seekers become reemployed.
The Florida Department of Revenue administers the reemployment tax program. The Department registers employers, collects the tax and wage reports due, assigns tax rates, and audits employers. The Florida Department of Economic Opportunity (DEO) administers reemployment benefits, which provide temporary income to workers who lose their jobs through no fault of their own and who are able and available for work.
Reemployment tax is paid by employers and the tax collected is deposited into the Unemployment Compensation Trust Fund for the purpose of paying reemployment assistance benefits to eligible claimants. Only the first $7,000 of wages paid to each employee by their employer in a calendar year is taxable and employers with stable employment records receive reduced tax rates after a qualifying period.
Reemployment Tax Liability
Before determining reemployment tax liability, a new business must report initial employment in the month following the calendar quarter in which employment begins. The DOR recommends that employers register to pay reemployment tax using the online Florida Business Tax Application, or complete and submit a paper Florida Business Tax Application, Form DR-1.
To establish reemployment tax liability, DOR considers different factors. Therefore, if employers meet any of the following conditions, they are liable to pay reemployment tax:
- At least one quarterly payroll totaling $1,500 or more, including wages for both full and part-time employees in a calendar year;
- One or more employees for a day during any 20 weeks in a calendar year;
- Nonprofit organization as defined in Section 3306(c)(8) of the Federal Unemployment Tax Act and Section 501(c)(3) of the Internal Revenue Code and four or more employees for a day during any 20 weeks in a calendar year;
- An agricultural employer with five or more workers for a day during any 20 weeks in a calendar year, or a $10,000 cash payroll in any calendar quarter;
- Private home or college club that paid $1,000 cash in a quarter for domestic services in a calendar year;
- All or part of a liable business purchased, or the combination of existing payroll or employment and that of the business purchased meets the liability criteria;
- Liable for federal unemployment tax;
- Previously liable for reemployment tax in the State of Florida;
- State, county, city, or joint governmental unit; and
- An Indian tribe or tribal unit.
Employers who meet conditions for reemployment tax liability are required to post a notice or poster regarding state unemployment claims in a place where all employees can see it. The poster provides basic information on who is eligible for unemployment compensation benefits and how to file an unemployment claim. Employers can download a notice that meets all legal requirements, Form RT-83, To Employees, from the DOR website.
UI employee eligibility in Florida
The state of Florida provides temporary, partial income replacement benefits and job assistance resources to unemployed workers who qualify for the program. To meet requirements for UI employee eligibility in Florida unemployment benefits, employees have to fulfill several criteria:
- Employees must have lost their job through no fault of their own. Employees cannot qualify if they quit for personal reasons or were terminated for malicious misconduct. However, poor job performance does not disqualify them;
- Employees must be totally or partially unemployed. Partially unemployed means their hours were reduced or they are a part-time worker who cannot find additional work;
- Employees must have earned at least $3,400 before taxes in what is called the base period, which is the first four complete quarters beginning 18 months prior to their claim;
- Employees must be able to work, available to work, and actively seeking work. This includes being able to get to a job and have childcare if necessary.
Furloughed workers, or those put on mandatory unpaid leave, may also meet the criteria for UI employee eligibility in Florida. If their hours were reduced or they were put on a zero-hour schedule, workers may be eligible for unemployment benefits.
Once employees meet the requirements for UI employee eligibility in Florida, the weekly payment amount they will receive varies. The state of Florida determines weekly benefit payments based on employees’ previous earnings during employment. They can receive a maximum of $275 per week for 12 weeks. When employees secure a job, the payments stop, but working part-time or temporarily does not necessarily end the unemployment benefits.
Compliance with Florida Reemployment Tax
To stay compliant with UI program requirements in Florida, employers need to monitor both the IRS and DOR websites for the latest information. In addition to this, the DOR provides two helpful publications, Employer Guide to Reemployment Tax, Form RT-800002, and What Employers Need to Know about Reemployment Tax, Form RT-800058, for employers to download.
One of the most common issues regarding potential Reemployment tax liability is based on the distinction between an employee and an independent contractor. Misclassification of a worker as an independent contractor can have implications beyond tax reporting and remission. A wrong choice can also affect claims for reemployment benefits and, if done intentionally, it is considered a crime.
Given that employers may have to manage an overwhelming number of state and federal unemployment regulations, including those regarding Reemployment tax liability in Florida, they need to establish a proactive approach to unemployment claims handling. To that end, they can rely on an automated unemployment claims software and simplify unemployment claims management to minimize risks, reduce administrative burden, and optimize state unemployment insurance tax savings.