Summary
H.R. 3463, the SUTA Dumping Prevention Act of 2004, creates safeguards to prevent employers from transferring or acquiring businesses simply to avoid higher unemployment insurance rates. The California Unemployment Insurance Code prohibits an employer from obtaining a new Employment Development Department account number or using another employer's account number to get a lower rate. The EDD estimates that underpayments to the state's UI fund due to SUTA dumping are in excess of $100 million. The EDD is aggressively pursuing the identification and review of businesses suspected of UI rate manipulation. Schemes on their radar screen include: 1. affiliated shell transaction, 2. new employer rate, 3. reporting under a client's employer account number, and 4. high plus high equals low.
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Extract
No More Dumping
SUTA dumping, or State Unemployment Tax Avoidance, typically involves the creation of a new business entity and the transfer of payroll between the old and new entities to reduce unemployment insurance rates.
President Bush recently signed H.R. 3463, the SUTA Dumping Prev...See the full content of this document
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