Virginia Unemployment Benefits Duties for Employers

Most employers in Virginia will have to pay unemployment compensation taxes or contribute to the Virginia Unemployment Fund.

Who Must Pay

According to the Virginia Employment Commission and the Virginia Administrative Code, any employer with at least one employee may be liable for unemployment compensation coverage. If you have at one or more employees working at least 20 weeks during a calendar year, you will most likely have to pay contributions. This means that even if you only have one employee working part-time for at least 20 weeks, you will have to contribute. You must also contribute if your gross payroll is at least $1,500 for three months during a calendar year. There are limited exceptions types of employers, including nonprofit, domestic and agricultural employers. These employers may have to pay if their gross profits exceed a certain amount or if their payrolls exceed a certain amount.

How Much do They Pay?

Virginia law requires covered employers to pay unemployment taxes, and the amount they must contribute depends on their payroll and history of unemployment experience. Known as an “Experience Rating,” your unemployment taxable wage base will depend on the amount of your payroll combined with your past “charges.”

New Employers Start With a Level Playing Field

Most new employers pay the same amount in unemployment taxes. However, in some cases, if you buy an existing company, you may have to pay the prior company’s unpaid taxes. As a new employer, your tax rate is 2.5 percent until you must pay the new computed rate, as determined by Virginia law. Although new employers start with a level playing field, their tax rates may increase if they terminate large numbers of employees who are eligible for unemployment compensation benefits. Their rates may also increase during times when Virginia’s unemployment fund is low due to high levels of unemployment filings by out-of-work employees.

Employers May Appeal Benefit Awards to Keep Their Tax Rates Low

Did your employer deny your recent application for unemployment benefits? This occurs because employers have a financial incentive to challenge awards in many cases in order to keep their tax charges at a minimum.

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