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EMPLOYER CONTRIBUTIONS
What is an Experience Rating?
“Experience rating” is the system by which tax rates
vary in relation to an employer’s experience with
unemployment. Experience rating has three major
objectives:
Serve as an incentive to stabilize employment
Produce proper allocation of the cost of
unemployment benefits
Encourage employer participation in the
program
When am I Eligible for an Earned
Experience Contribution Rate?
Unless you are subject to 40 O.S. §3-111 or 3-111.1,
beginning with the 2016 rate year, an employer shall
meet the At-Risk Rule, as defined by Section 3-
110.1, and be eligible for an earned tax rate if,
throughout the calendar year immediately preceding
the year for which the employer's tax rate is being
determined, there was an individual who could have
filed a claim for unemployment benefits in each
quarter of that year establishing a base period, as
defined by Section 1-202 of this title, which would
include wages from that employer.
When am I Eligible for a New
Contribution Rate?
Unless you are subject to 40 O.S. §3-111 or 3-111.1,
newly subject employers will be eligible for a new
contribution rate; for the 2019 rate year, the new
employer rate is 1.5%.
The new employer rate is applied to all newly subject
employers until sufficient experience history exists in
the employer account to meet the At-Risk Rule, as
defined by Section 3-110.1. If the account meets the
At-Risk Rule, the employer will qualify for an earned
experience contribution rate.
What Constitutes a Successor Employer?
Pursuant to 40 O.S. §3-111, any employing unit
which acquires substantially all of the trade,
organization, employees, business, or assets of an
employer and who continues the operations as a
going business on or before 10-31-16 shall be
determined to be a successor employer. The
successor employer shall acquire the experience
rating account of the predecessor employer,
including the predecessor’s actual contribution and
benefit experience, annual payrolls, and
contribution rate.
Pursuant to 40 O.S. §3-111.1, if an employer
transfers all or a portion of its business to another
employer and, at the time of transfer, there is
substantially common ownership, management or
control of the two employers, the histories of the
employers will be combined.
What is an Experience Period?
According to 40 O.S. §1-227, experience period
means:
For any tax year occurring after December 31,
2006, the most recent twelve (12) consecutive
completed calendar quarters occurring before
July 1 of the year immediately preceding the
year for which the employer’s contribution
rate is being calculated
An employer’s benefit wage ratio is the percentage
equal to the total of benefit wage charges in the
experience period divided by the timely taxable
payroll used to compute eligibility of claimants
during the same three-year experience period
immediately prior to July 1 of the year for which the
rates are being computed (a period less than three
years for newly subject employers).