Iowa Unemployment Compensation laws & HR compliance analysis

Iowa Unemployment Compensation: What you need to know

Virtually all employers are covered by the Iowa Employment Security Law and are therefore subject to the state unemployment insurance tax (IA Code Sec. 96.1 et seq.). For example, covered employers include organizations that:
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• Acquired the business of a covered employer;
• Are subject to the Federal Unemployment Tax Act (FUTA);
• Are agricultural employers and, in the current or preceding calendar year, paid $20,000 or more in wages during any quarter or employed at least 10 people on 1 day in each of 20 different weeks;
• Are employers of domestic servants and paid cash wages of $1,000 or more in any quarter;
• Are Indian tribes; or
• Elected to be covered (IA Code Sec. 96.1A).
Governmental bodies are covered except with regard to elected officials, judges, political appointees, prison inmates, and temporary emergency workers.
The law excludes certain services from coverage, including, for example, services provided by:
• Students working for schools, colleges, or universities;
• Students working for work­study programs;
• Spouses of students working for schools; and
• Real estate salespersons (IA Code Sec. 96.1A).
Taxable wage base. For the current taxable wage base, visit https://www.iowaworkforcedevelopment.gov/unemployment-insurance-taxes. The term “wages” includes commissions and bonuses and the cash value of remuneration in any medium other than cash (IA Code Sec. 96.1A).
Rates. Tax rates are determined every year. To find the current tax rate, visit the above link. New employers pay a certain set percentage.
Experience ratings. After a new employer period, an “experience rating” that determines its tax rate for the coming calendar year is assigned. The ...

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