District of Columbia Unemployment Compensation laws & HR compliance analysis

District of Columbia Unemployment Compensation: What you need to know

Virtually all employers are subject to unemployment insurance taxes under the District of Columbia’s unemployment compensation law (DC Code Sec. 51-101 et seq.). For example, coverage extends to:
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• Anyone who employs one or more persons at any time;
• Any employer subject to the Federal Unemployment Tax Act (FUTA) that employs at least one person in the District; and
• Any employer of a domestic servant that pays $500 or more in a calendar quarter (DC Code Sec. 51-101).
The law excludes certain services from coverage, including, for example, services provided by:
• Students working for schools, colleges, or universities;
• Insurance salespersons;
• Student nurses;
• Hospital interns;
• Certain newspaper distributors (e.g., minors);
• Casual laborers; and
• Individuals receiving rehabilitation and performing services for the rehabilitation facility (DC Code Sec. 51-101).
Wages. For the current taxable wage base, visit http://does.dc.gov/service/tax-rate-questions. Wages include both cash and the reasonable value of noncash items (DC Code Sec. 51-101). For example, salaries, commissions, and bonuses are all considered wages.
Rates. Tax rates may vary from year to year. To find the current tax rate, visit http://does.dc.gov/service/tax-rate-questions. New employers pay a certain set percentage.
Experience rating. After a "new employer" period, an employer receives an “experience rating” that determines its tax rate for the coming year. The rating is calculated on the basis of the total amount of taxes paid in, the total amount of benefits paid out, and the size of the taxable payroll. A relatively high volume of unemployment claims yields a higher tax rate. Benefits ...

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