Massachusetts Unemployment Compensation laws & HR compliance analysis

Massachusetts Unemployment Compensation: What you need to know

Virtually all employers are subject to unemployment insurance taxes under the Massachusetts Employment Security Law (ALM GL ch. 151A, Sec. 1 et seq.). For example, the law's coverage extends to:
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• Anyone who paid wages of $1,500 or more during any quarter of a calendar year or who employed one or more individuals in each of 13 weeks in a calendar year;
• Any employer subject to the Federal Unemployment Tax Act (FUTA) that employs at least one person in the commonwealth;
• Any employer that acquires the trade or business of a covered employer; and
• Any employer that elects to be covered (ALM GL ch. 151A, Sec. 8).
The law excludes certain services from coverage, including, for example, services provided by:
• Students working for schools, colleges, or universities;
• Students working for work-study programs;
• Spouses of students working for schools;
• Real estate and insurance salespersons (except for industrial life insurance agents);
• Student nurses;
• Hospital interns;
• Certain newspaper distributors (e.g., minors); and
• Certain poll takers (ALM GL ch. 151A, Sec. 6).
Taxable wage base. For the current taxable wage base, visit https://www.mass.gov/guides/guide-to-employer-contributions-to-dua. The term “wages” includes:
• The reasonable value of any noncash remuneration, such as board, rent, housing, and lodging; and
• Salaries, commissions, and bonuses (ALM GL ch. 151A, Sec. 1).
Rates. See the above link for the current tax rate. 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 based on the total amount of taxes paid in, ...

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