UIA Employer Advisor July 2024 | Tax rates, business transfers, refusal to work, and more (2024)

A Newsletter for Employers July 2024

If you want to suggestan article or topic for a future edition of the Employer Advisor newsletter, or just want to tell us how much you enjoy reading it, please send a message to
UIA-EmployerAdvisor@Michigan.gov.

Link to past newsletters on the Employer Homepageat
Michigan.gov/UIA.

A reminder that Thursday, July 25, is the deadline to submit Second Quarter Wage and Tax Reports. Incorrect or unfiled reports and late or missing payments can result in penalties and interest being assessed to an employer’s account. The Employer Help Center’s Submit Reports & Payments has everything you need to know about filing timely reports.

Happy summer to all our readers. We are grateful for everyone who spends a few minutes each month with the Michigan Employer Advisor newsletter. You’re encouraged to distribute the newsletter throughout your organization.

There’s good economic news as Michigan’s seasonally adjusted jobless rate remained at 3.9 percent for the fourth consecutive month during May, according to data from the Michigan Department of Technology, Management & Budget. Michigan’s May unemployment rate was one-tenth of a percentage point below the U.S. rate.

A shout-out to everyone who has participated in UIA’s Employer Seminars. This month, our staff educated more than 60 participants about unemployment insurance, and answered many insightful questions. Staff also shared important resources to make your experience with UIA go more smoothly. If you haven’t attended a virtual Seminar, you don’t want to miss out on these informative events. Two more are planned for this year, on Sept. 18 and Nov. 13. Sign up for either one at this link.

UIA recently requested additional information from employers who participated in a Michigan Work Share Plan from April 2020 through September 2021. If you haven’t responded to our request to identify seasonal, intermittent, or temporary employment, please do so by logging into your MiWAM account and checking your Alerts.

Finally, an update on our Local Office renovations initiative. As of July 15, renovations have been completed at three of the five Local Offices that are undergoing construction: Sterling Heights, Saginaw, and Grand Rapids (photo above). Lansing is currently closed with staff working out of the Capital Area Michigan Works! Office at 2110 South Cedar Street. Work on the Detroit office will begin later this year. The renovations will improve the customer experience and upgrade security.

Now, onto this month’s newsletter, where we explain how your unemployment tax rate is calculated, the impact of a business sale on your unemployment tax rate, how to report job candidates who refuse work, and more.

Here's the formula used the first 3 years

This shows how the tax rate is calculated the first three years a business is liable:

• Year 1: 2.7 percent PLUS 1/3 of CBC.
• Year 2: 2.7 percent PLUS 2/3 of CBC.
• Year 3 and beyond: The employer becomes fully experienced.

The rates in the third and fourth years of liability are partly based on an employer'sunemployment insuranceexperience. This is the employer's history of benefit charges and taxable payroll.

The Michigan Unemployment Insurance Agency (UIA) sets the tax rates that are assessed on most employers to fund the state’s jobless benefits program.

Tax rates are calculated using three factors: Chargeable Benefits Component (CBC), Account Building Component (ABC), and the Nonchargeable Benefits Component (NBC).

The CBC and the ABC are affected by the employer's payroll and the unemployment benefit charges to their account. Since these components reflect each company’s unique unemployment benefits history, they are known as the experience components. The entire UIA taxing computation is known as experience rating. Generally, employers that have many former workers drawing unemployment benefits have higher tax rates, while employers that have few former workers drawing benefits have lower tax rates.

Employers in the construction industry are the exception to this rule. Their rate in the first two years of operation is that of the average employer in the construction industry. In recent years the average construction rate has ranged from 5.3 percent to 8.1 percent. The UIA announces the annual rate early each year.

The tax rate for employers is calculated using two main factors: The amount an employer has paid in wages to their employees, and the number of employees who have collected unemployment benefits.

How employers can view current tax rates

• Log into MiWAM.
• Click on Recent Items.
• Navigate to the All Letters column.
• Look for UIA Form 1771 Tax Rate Determination (which is usually sent in December).

Selling a business can have implications on unemployment tax obligations. Depending on the percentage of a business being sold, the tax liability and tax rate may be passed onto the new owner.

Michigan law requires that a seller must provide the purchaser with information regarding their unemployment tax liability two days before the close of the sale. A seller is required to provide the buyer with Form UIA 1027, Business Transferor's Notice to Transferee of Unemployment Tax Liability and Rate. The seller can request a summary report of this information by contacting UIA to request Form UIA 1346, Disclosure of Transferor Account.

Protest for Refusal of Work

• Log in to your MIWAM account.
• Click on the UI Tax link.
• Click on Account Services.
• Under Benefit Services, click on Report Refusal of Offer of Work.
• Follow the steps to report and click to submit when finished.

MiWAM Reporting Alternatives

• If a claimant fails to interview, submit the date, time, and employer name and address of where the interview was to take place.
• Include the claimant’s name, address, and phone number, and Social Security number (SSN).
• Mail the information to:

Unemployment Insurance Agency
P.O. Box 169
Grand Rapids, MI 49501-0169

• Or fax the information to:
  (517) 636-0427

Employers and Third-Party Administrators (TPAs) will begin to see in September a regular cadence of information on topics related to the UIA’s rollout in 2025 of a new computer system.

For instance, you’ll hear more about the expanded number of file formats available to upload information into MiUI.

To prepare for a smooth transition to MiUI, make sure your contact information is up to date in MiWAM. It's quick and easy to do.

How to update Business Address(es)

If you have Master access to your account, you can change your physical and legal addresses.

1. Have the master user log in to MiWAM.
2. From the homepage, click on Names and Addresses to view or change the physical and/or legal address.
3. A confirmation number will be sent once you complete the address update.

How to update a master user’s email address

1. From the MiWAM homepage, click on Settings.
2. Then, click on Edit.
3. Update the email address and any other profile details, if necessary.
4. Finally, click Save.

UIA will reach out in a number of ways about MiUI, and you’ll want to make sure you get the latest information at the appropriate time.

If you have questions,
feel free to reach out to
the Office of Employer Ombudsman by calling:
1-855-484-2636, then select Option 4.

A reminder to those who have a Work Opportunity Tax Credit (WOTC) program Power of Attorney that you must turn in Form 9198.

This form from the U.S. Department of Labor is a replacement for the IRS Form 2848. UIA will recognize the Form 2848 through the end of July.

If you don’t submit the new form by the deadline that could jeopardize your status as Power of Attorney.

The new form can be downloaded from theUIA's WOTC webpageor from the U.S. Department of Labor'sEmployment and Training Administration.

If you have questions, emailWOTCUnit@Michigan.gov.